Wednesday, 26 December 2012

How To Improve Your Logistics Performance

international logistics
Most thriving company that stays ahead of their competition usually have a successful logistics operation that follow a logistic process that has been specifically tailored to meet their customer’s needs.  So how can they ensure that their business logistics are running smoothly and cost-effectively?   Although business varies, let’s look at some interesting ideas from Stephen Errey that might help your business performance.

Focus on making order to delivery lead-time
How your customer’s view your business is an important factor in any business. The amount of time between ordering and receiving their goods is vital in their opinion of how your business operates so manage your lead-time efficiently and focus on the all the departments involved in the order fulfillment process (eg: sales order process, credit control, stock control, production, warehouse, transportation) and learn to look at business from their point of view.

Maximise your transport value before providing service
Offer your customers different level of service that suits your customer’s transport need, it may help your business avoid unnecessary cost and missing key revenue opportunities.

Cut costs by reducing your stock pipeline and improve service
Managing and planning is an essential part of the whole logistic process. Sometime having too much stock can be worse than having too little so learn to understand your customer and their buying behavior.  Design an order fulfillment that matches the demand of your customers, you will find a quicker and more responsive supply chain with less stock clogging up.

“Pick “once, “pick” right and “pick” as earliest as possible to cut cost, time & errors
In order to turn what your supplier sends you into a finished product,  “picking “is a common process that most logistics operations will become involved with when the product moves from one stage of the supply chain to the next.  Pick according to what your customer wants and reduce the number of pick by making the “real pick” to avoid the supply chain knock-on effect (cost, time and error). 

Cut out unnecessary activities where possible
Adopt a new approach and look for ways to provide better service at a lower cost while improving lead time.  By finding ways to improve your business approach and cutting out unnecessary activities, you may be able to reduce lead-times and customer service dramatically.  Some questions you might want to ask yourself are:

• Are there ways of cutting out large costs or whole activities?
• Can we move up our service levels?
• Can we optimise activities such as dispatching our products straight to our customer instead of sending it to intermediate warehouse or distributors? 
• Can we tighten up the department so we do not need to spend a lot of time checking and correcting silly mistakes on a daily basis? 
• Can we pick directly to the delivery box instead of separating one container before packing?

Source:  Stephen Errey (May 2005). Five steps toward improving logistics performance.

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