Businesses thrive on productivity. And the process from start to finish is critical for their overall survival, especially in the age of internet business competition and technology.
TRANSPORTATION
Transportation could mean the gain or loss of customer sales. So a business needs to move their products as efficiently as possible. Whether it’s shipping raw goods, including assembly parts to a manufacturer or an assembly area, or moving finished goods to a customer. Timing means everything.
LOGISTICS
Logistics exists externally, but also internally. And the logistics within a company is equally as essential as external. Businesses must move their own products in the most timely manner. This is when they reduce costs by packaging and storing products as quickly as possible.
TRANSPORTATION AND LOGISTICS RISKS
There are always risks with the transportation and logistics chain process. So a business relies on solid suppliers that give peace of mind of product availability, which keeps production running smoothly. The worst case scenario is the unavailability of supplier products. A business can go on factory shutdown without product availability.
Another risk is when a supplier cannot provide products quickly. That’s why suppliers must guarantee great efficiency to their customers. Having suppliers nearer to businesses reduces that risk. Some suppliers use air travel to transport their products. So when Air Traffic Control delays or stops air scheduling, products are not received on time. Ground traffic can also be avoided when suppliers are close by. In some cases suppliers just can’t be found any closer. So a business’s suppliers need to have numerous alternate travel plans to ensure timely product arrival.
Businesses should combine as many of their shipments as possible, not only for minimizing shipping costs but also for minimizing lost shipments costs. When products are lost, re-shipment is an unnecessary cost, in addition to duplicating lost product costs, too. Labor costs are also affected because there are people waiting at the next process phase, resulting in lost productivity.
REDUCING LOGISTICS COSTS
An imperative way to keep logistic costs down is by keeping minimum products in inventory. Inventory tracking and maintenance is somewhat easier when both ends use cross compatible RFID chips (radio frequency identification). RFID chips enable reduced inventory, and also labor costs because packing, unpacking, and labeling products is very time consuming.
REDUCING TRANSPORTATION COSTS
In addition to product movement, businesses must keep a close eye on keeping their shipping costs to a minimum. A priority is finding the most economical ways to transport, but at the same time eliminating costs when transportation is unnecessary. There may be suppliers that cost less in transporting or shipping when they are nearer to them. Another option is when a transportation provider offers a volume discount. Less shipments equals less money spent. There are also vendors that offer partially assembled goods that cuts movement and production costs. And a final savings benefit is when a factory layout is set-up so employee work areas are closer, saving labor and material movement time, too.
– Brian Walker is a proficient author on topics related to moving and shifting. He currently writes for Moversandpackers.org and is a regular contributor to the website.
