Improving your logistics costs should not mean worsening your logistics. This week we are going to see what we should pay attention to in order to improve our competitiveness without having to resort to the mere request for discounts from our transport providers. And it is that, if the only thing we ask for is a decrease in the price, it is possible that this is achieved through a reduction in the level of service that is required of it.
The importance of logistics costs
Although the figure varies greatly depending on the sector, it is usually estimated that 10% of the final cost of a product is due to logistical factors. With just this data we can already get an idea of the importance of controlling logistics costs. And, even more, what we can do to improve them without losing quality.
Losses and breakages
It is very common to evaluate the cost of logistics operators simply by attending to the prices that appear in their rates. However, a bad service hides behind it a whole series of costs that usually go unnoticed. Among them are losses and breakages.
By regulation, conventional transport insurance covers a certain amount -currently close to six euros- for each kilo of damaged merchandise. There are many companies or products for which this coverage is sufficient. But for others it falls short, which forces the contracting of additional insurance or the risk of not having all our merchandise covered.
Due to this, breakages have a direct impact on our costs. In addition, this type of situation entails other inconveniences: delay in delivery in good condition to the end customer, worse image before our client, delays and possible problems in insurance management, etc.
Save logistics costs in the warehouse
A well-kept warehouse can be a huge source of profit for your logistics. But inadequate management of it will raise your costs without adding value to the processes. This time we are going to focus on two aspects: location and stock management.
The location of the merchandise on the shelves should not respond to randomness, but to the frequency and type of use of the products. The most used will be placed in more accessible places, unlike those with less movement. In addition, this level of use does not have to be rigid. There may be merchandise with a lot of seasonality that, depending on the time of year, must be located in a position with a lot of use and during the rest of the year in less frequent locations.
The truth, the whole truth and nothing but the truth. That should be the bible of information in logistics. Again, we are going to focus on two aspects.
Information and traceability: Digital traceability saves you many more costs than you may believe. The time spent on phone calls, queries and doubts is reduced when you can count on the status of the shipment, the delivery confirmation and the delivery note in real time.
Shipping information: Name, full address, telephone number, hours, contact person… All these data to make deliveries help to avoid delays, failed deliveries (with the possibility of additional costs for a second delivery) and even merchandise linked to wrong destinations -names of similar cities, incorrect zip codes, etc.
Although there are many more places where you can optimize logistics costs, today we wanted to focus on these three cases, with which you can start working.