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Avoid the most common mistakes in Logistics

Sep 03, 2014

Good logistics management offers companies tools to improve costs and consumer loyalty, and to create new business opportunities. With that in mind, it becomes clear that excellent planning and implementation of the storage and transportation process is an important competitive advantage and a crucial one for the success of a business. But how can we prevent problems in those areas from compromising our clients’ confidence and loyalty? Learn more about the most common mistakes in logistics and how to evade them.

Problem: promise what you cannot deliver

It is a common challenge for a company to unite all the channels that depend on the logistics chain. Lack of communication and dissonant objectives will occur among the commercial, marketing and logistics management and operation areas. It is a common error to underestimate the need for collaboration and communication between internal areas, shippers, freighters and clients – an error very often compounded by promises whose practical execution will be hard.
Everyone involved in the project need to feel part of the Value Chain and know the importance of their jobs. When information access is limited or inexistent, employees can become passive executors.

To avoid situations like this, promote integration between departments. The solution is to previously define and communicate to all internal areas the service levels to be presented to your clients. The exchange of information between managers and employees is fundamental to clear up the hitches presented in each level. And so is easier to organize each worker activities and make a more profitable and productive job. Manage the area closely, to avoid inventory and storage problems, delays and returns. Communicate any change in delivery to the recipients and other interested parties.
Good communication ensures focus and is key to promote the involvement and collaboration among employees and third parties while accomplishing the Business’ objectives.

Problem: inefficient manual processes

Much headache comes from trusting manual and decentralized processes to manage a company’s logistics chain. Locating deliveries by calling or sending emails to freighters, for example, is slow and inefficient and uses up the time of your team.

The solution is to use technological tools to automatize the monitoring of deliveries and collections. Such solutions allow following up vehicle location in real-time, which gives your team time to focus on management itself, anticipating and correcting delay problems, for example.

Problem: high costs with less strategic activities

Operational and routine tasks often consume too much time of qualified professionals allocated to the company’s core business activities. Shipping programming and delivery scheduling are examples of those tasks.

The solution is to outsource part of your logistics area’s operations management. Engage the company able to manage trips and costs through transparent, standardized and auditable processes. With a specialized and dedicated management, your company not only achieves cost savings but also gains a strategic advantage. According to a research by Science Citation Index, an average company already has 32% of its production and 48% of its Logistics outsourced.

Problem: lack of visibility

Many companies fail to correct operational bottlenecks because they are unable to see them. Lack of visibility, or even its limitation, has direct consequences in operational efficiency. Managers who cannot clearly view their logistics operation find it very difficult to manage risks or to make fast and well founded decisions.

Data goes through different collaborators throughout a Supply Chain being subjected to several changes. As reported by Science Citation Index, spreadsheets suffer through at least 5 changes every day.

The solution is to invest in a technology able to provide easy access to freight information, including orders, products and invoices related to what is being delivered. Find who is responsible for the freight and the trip’s program and incidents. More available information will make it possible to optimize your professionals’ time, to eliminate bottlenecks and to avoid additional costs.

The implementation of Transportation Management Systems (TMS) is still low, either local or on cloud. According to Logistics Management 2013 research, only 34% of shippers use TMS. Steve Banker, Director of Services for Supply Chain at ARC Research Group affirms that TMS is a high investment, but companies may save up to 8% in freight. TMS in Cloud is an option for a faster development at a lower cost.