Trending News and Blog Site

What are the 6 Logistics Goals?

With a surge in the volume of freight consignments and the expansion of e-commerce and online businesses across the world, timely and reliable transportation of goods has become increasingly challenging, thereby enhancing the need for top-notch logistics management.

Providing 3PL services involves assuming many responsibilities, such as the handling of inventory and fleet, administrating supply and demand, packaging, customs clearance, and distribution. To accomplish them, third-party logistics providers that render such services must follow these six logistics goals.

  1. Maximizing Efficiency

Maintaining cost-effective transportation is a key element of any professional 3PL services company. Couple that with lowering overheads, inventory, cost-per-order processing, and improving operations, processes, and layout (in collaboration with a transportation provider), and that is one of the primary goals of a logistics firm.

Since inefficient transportation takes up space on the receiving dock, integrating these processes into the warehousing functions and processes by accounting for both inbound and outbound logistics, queuing up shipments by the carrier, and fulfilling orders on a delivery-to-delivery basis are notable strategies to implement.

  1. Improving Customer Service

Positive experiences persuade a customer to avail of 3PL services again and again. Reliable and consistent delivery performance and rapid response enable the company to cater to a larger number of clients and satisfy their needs properly.

Shifting your logistics strategy from a reactive approach to a proactive approach that adequately caters to customer needs on a delivery-to-delivery basis, rather than stockpiling the inventory in anticipation of future orders, can help optimize the operational productivity at your workplace and make for happier clients.

  1. Minimizing Product Damages

When 3PL services are delivered round-the-clock and around the world, where most tasks are away from a supervisor’s eye, mistakes are bound to occur. Subpar packaging, lack of load unitizing, and other such decisions can result in unwanted holdups in the distribution channels, such as defective products, improper deliveries, or delays in receiving customer order receipts.

As these can raise the firm’s costs and harm its reputation, minimizing such occurrences through strategic measures such as keeping a safety stock and using modern technology for information processing is an important logistics goal.

  1. Maintaining a Low Inventory

While inventory is an asset and does not necessarily depreciate over time (unless it’s a perishable item), storing it requires an investment that could be used elsewhere in the business. The capital cost incurred while storing large inventories of raw materials and finished products is equal to the interest paid on the funds at the bank borrowing rates at that time, and that is not preferable.

Consequently, keeping inventory minimal via a high turnover rate will reduce the total logistics cost and ensure the effective use of the company’s stocks. High transportation costs are always lower than the inventory storage costs, allowing improved margins.

  1. Freight Economy

Transportation makes up the bulk of expenses that go into logistics, dictated by variables such as the type and size of the product and the distance over which it is being shipped. To reduce the transportation cost per unit, the movements of shipments can be streamlined via strategies such as movement consolidation (grouping small shipments), transport mode (browsing different options based on need) and route determination, and load unitizing.

  1. Ensuring Consistency in Quality

The cost invested into logistics is irreversible, which is why every shipment must be handled with care. If a delivery fails due to reasons such as transportation lags, damage to products or incorrect location, the 3PL services company faces higher expenses.

Redoing an order (critical to customer satisfaction) uses up extra labor, time, and money. Besides the cash invested into the incorrect orders and the risk of losing a long-term customer, costs such as that of processing the reorder, customer acquisition, loss of revenues, and eroding gross margins are also incurred.

Consequently, delivering top-notch quality consistently is a priority.

The Bottom Line

Providing 3PL services is a multifaceted task. To do the best possible job of optimizing supply chain management and enhancing their profitability, the above six logistics goals are prioritized. Doing so will not only reduce operational costs but will also shape the best flow of goods, improve brand value, and create more opportunities for every stakeholder involved.

Leave A Reply

Your email address will not be published.