Logistics cost form an important part of the overall cost structure in any organization. Focus needs to be on renegotiating freight and shipping rates, reduction in overall freight costs and streamlining operations.There are six best practices that can be followed by most businesses to reduce costs.
New carriers: Constant market rate check is a best practice. Usually, logistics managers get into a comfort zone with the existing carriers. This leads to cost creep. Market rate check will bring to light other more economical operations. New carriers may be more flexible in their quotes.
Freight costs: There are several options to optimize freight costs. Renegotiation of minimum billing to a minimum for a zone needs to be explored. Product delivery coordination is another useful tool to streamline freight costs. Today both the USPS and Canada Post offer viable options for small packages. Arrangements with a number of smaller local carriers sometime s provide the best rate/best service combination. Internet offers excellent tools for comparing and optimizing freight costs
Improve shipping and receiving: Streamlining shipping and receiving practices will offer substantial savings. This can happen through reduction of window time for receiving. Starting point should be mandating delivery appointments. A flow chart needs to be made of all the operations to determine wasteful processes and combining existing processes.
Technology: Internet tools enable substantial reduction in paperwork. Documents are scanned and emailed to customs, ports etc. In case of cross border trade, documents needs to reach at least twenty four hours in advance to avoid delays at the border. Technology also allows coordination of all shipments to optimize loading.
Managing returns: Reverse logistics is an important element of freight costs. Most companies offer a liberal returns policy. If the customer is not satisfied with the product, it can be returned in 30, 60, 90 days depending on the seller. At times, the seller also arranges to pick it up. To minimize costs associated with reverse logistics processes needs to be streamlined.
Audit of freight costs: Use specialized agencies that provide post payment audit of freight bills. These agencies are usually paid on a profit sharing basis. These audits also provide valuable insight into patterns and other cost reduction opportunities.
Saturday, February 23, 2008
Supply Chain In Logistic Services
Logistics is defined as possessing the right amount of substance at the correct time and for the appropriate price. It is a discipline, which deals with the procedure of any organization and has operational and financial impact. It fits in with all types of industry segments, and administers the completion of project life cycles, supply chains, and ensuing efficiencies. Freight logistics involves working with experts who merge expertise in freight transport with focused knowledge of certain industrial sectors.
In the current scenario, logistics and supply chain matters are more important than ever before and have accomplished greater eminence within business circles. Several freight companies have got into joint ventures with companies that are focused in a sector, to achieve optimization of their services. There are several firms that grant outsourced or "third party" freight logistics services to companies. These providers are specialized in warehousing and shipping services are incorporated into their systems. This can be modeled to the needs of the customers and is alive to the demands and delivery service requirements of the market.
Regardless of the type of shipment involved, the basic principle underlying the expectations of the market has always been of exceptional standards in respect of quality and safety of the goods. Hence, several companies have come up with integrated solutions that have become popular with all freight businesses.
Online freight disbursement and contract tracking systems are available that provide authoritative control for the logistics procedure. Using these Internet based services it is even possible to track supply discrepancy reports. This single source information center offers access to the shipment data for carriers as well as transporters. This product also abolishes the requirement of merging of freight bills and invoices and ensures faster and precise payments.
Freight logistics solutions serve as an important tool for better managerial decisions and hence have brought about improved customer services.
In the current scenario, logistics and supply chain matters are more important than ever before and have accomplished greater eminence within business circles. Several freight companies have got into joint ventures with companies that are focused in a sector, to achieve optimization of their services. There are several firms that grant outsourced or "third party" freight logistics services to companies. These providers are specialized in warehousing and shipping services are incorporated into their systems. This can be modeled to the needs of the customers and is alive to the demands and delivery service requirements of the market.
Regardless of the type of shipment involved, the basic principle underlying the expectations of the market has always been of exceptional standards in respect of quality and safety of the goods. Hence, several companies have come up with integrated solutions that have become popular with all freight businesses.
Online freight disbursement and contract tracking systems are available that provide authoritative control for the logistics procedure. Using these Internet based services it is even possible to track supply discrepancy reports. This single source information center offers access to the shipment data for carriers as well as transporters. This product also abolishes the requirement of merging of freight bills and invoices and ensures faster and precise payments.
Freight logistics solutions serve as an important tool for better managerial decisions and hence have brought about improved customer services.
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