How Small Logistics Can Reduce Costs?

Little steps make big things happen

Cost reduction at every stage helps a firm, big or small, to garner huge savings, which in turn helps the company’s revenue. Having a check on the logistics cost is often a priority for a business’ bottom line. A lot also depends on the logistics company with whom you partner with. However, methods of cost reduction on logistics front can range from creating better processes to optimization of inventories, charting out better shipping networks to having great relationships with suppliers and vendors.

Let’s now have a look at the measures that can reduce logistics cost and make a company more profitable:

Managing Labour Cost

This is one of the critical areas which needs to be dealt properly. Optimum number of labour should be employed to handle warehouse operations. Implement Labour Management software systems that will help you to manage these costs. In a highly competitive, multi-channel world tracking labour productivity is a key area that will transform the entire profit-loss calculation in logistics. These software helps in advanced workforce planning, scheduling along with real-time monitoring and generating report cards – a very systematic approach in cost controlling.

Implement preventive maintenance

This is in fact true to any field, it’s always better to have proactive maintenance from time- to-x` time rather than shelling out huge funds on a breakdown in form of man hours’ losses, loss of machinery, injury or loss of human life through accidents. All these will have huge cost implications in later stage.

Cross Docking

Pioneered in US trucking industry way back in 1930s, this practice can bring down the logistic cost significantly. This has many advantages like lower risk in handling inventory, reduction in labour cost through less inventory handling, streamlining the entire supply chain. This fast track process gets rid of warehouse storage, thus providing a quick and cost effective mode of transportation.

Use of Automated technology

Various available Warehouse Management System (WMS) are available to reduce the cost and have an efficient functioning of your freight movement. Some of the top WMS like Zoho, MyProduce, Windware, Snappii, Rosmiman IWMSetc can improve functioning at optimum cost. These software helps improving inventory visibility and tracking, stock rotation, shipping accuracy and compliance with vendors. Many of it is mobile app based and easy to operate.

Transportation Management System (TMS) can help you identify the most effective routes with less travelling distances between nodes, thereby controlling costs. InfoPlus, Infor, Kenandy Cloud, BluJay are some of the top performing TMS software available to ease your process.

Over and above all these, streamlining logistics process can help in cutting down the cost. By proper planning firms might be able to save a lot of their teams’ time on operational activities, allowing them to spend more man hours in handling other duties. Emergence of cloud-based technologies have now made things much easier, accessible, affordable and transparent. Transparency leads to operational efficiency and helps building strong relationships between partners, which later can help to absorb partial costs between supplier and receiver.

What small steps do you take every day to save costs of your business? Do share your views.