Logistics Supply Chain Management Transport And Logistics Companies

Tackle These 3 Hidden Factors For A Cost-Efficient Supply Chain System


The Logistics Performance Index (LPI) was recently released by the World Bank.  According to the report which evaluates countries based on six sub-indices including policy regulations and supply chain management performance, India has improved by 19 positions to rank 35th among 160 countries. The consumer market has been on the rise. Add to that the on-going e-commerce boom, and we have a transport and logistics sector that has grown manifold. An efficient supply chain is and continues to be a vital part of most product-based businesses. However, as with any growing segment, large distribution networks come with a host of challenges, including an underside in terms of hidden and unexpected costs. In fact, a recent study by ASSOCHAM-Resurgent India suggests that efficient logistics can help India cut costs by as much as $50 billion. Here are a few methods that can help improve operations and thereby reduce costs.

  1. Aim For Direct Deliveries

With the rising fuel prices adding to expenses, many companies do not realize that their greatest drawback comes with an inefficient delivery schedule, resulting in unforeseen expenses. At a time when fast delivery is associated with better service, it pays to have a well-planned system for intra-city trucking that will allow direct dispatch from the buyer to the seller. This way, a truck or van can directly head from point A to point C, which not only reduces the turn-around time for each task but also allows managers to utilize transport assets by assigning multiple pick-ups and deliveries on a single trip.

  1. Automation Is Key

More often than not, much time and effort are invested in the process of dispatching packages to multiple locations. The process becomes even more tedious when unwarranted return requests are raised, or when there’s a lack of coordination due to the disparity in information available to various executives at different centers. This usually disrupts the planned schedule, resulting in incomplete tasks and additional transport time. Automating simple systems can help concerned executives trace all details related to a particular package, including the time and date of arrival at the warehouse. The availability of basic details can help the concerned authority coordinate a particular delivery with another vehicle that is working en route. This not only increases efficiency but also reduces transportation costs and thereby net expenses.

  1. Optimize Storage

Inventory that is arranged in a systematic order can make efficient use of the storage space. By implementing an automated, virtual system, supervisors can easily group packages into various categories and assign specific locations or shelves for their storage. This helps in easy retrieval whenever the need arises, thereby expediting associated processes. A proper system also helps estimate the exact location and dimensions of storage space available – particularly useful when new requirements come up.

It is usually the simplest flaws that are most often ignored. However, putting a system in place to tackle minor errors can go a long way in building a cost-effective and smooth distribution network. Have we missed something? Let us know your thoughts in the comments below.

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