Looking for process optimization is a necessary task. Therefore, the entrepreneur must have control of the most diverse areas of the company. Logistics costs should receive special attention from entrepreneurs, as this activity has a strategic role for the business.
However, in the case of logistics, any change must be made with caution and always be based on previous studies. With that in mind, we’ll list some ways to improve the costs your company has with this operating division. Are you ready? Enjoy your reading!
1. Eliminate idleness to reduce logistics costs
It is not always easy to identify idleness, as it is not present only when a collaborator decides to fold his arms during his work day. Many processes become idle over time.
This occurs when the process does not have a clear purpose. In some cases, the company has modernized, but has allowed departments that no longer have a defined task to continue operating and consuming resources.
2. Automate processes as a solution
In some companies, logistics costs are linked to the activities required after the sale of goods. These tasks can benefit a lot from automation.
Product storage and delivery are two clear examples. The former can be fully mechanized, while the latter can gain efficiency by using geolocation devices.
Of course, these changes must be made according to the company’s strategy, but the entrepreneur should not ignore the technological opportunities available.
3. Map logistics processes
The two previous topics cannot be applied without the company being aware of the logistics processes it uses. Logistics goes beyond the common concept of product delivery, and includes storage, packaging processing, distribution, etc.
How can a businessman reduce logistics costs if he has not yet mapped them? The entrepreneur should have as a goal the mapping of all his processes – not only logistics -, as with this information he will have the confidence to make internal investments and improvements.
4. Invest in continuous improvement
Continuous improvement is the relentless quest for quality. It is easy to think of this concept when the company is developing a product, but many entrepreneurs do not apply it internally.
There is no point in automating tasks if employees do not receive adequate training. It is also useless to monitor the processes if there is no one to analyze the data. It is important that the manager recognize possible operating weaknesses in order to solve them. This should come before any major investment, and also applies to small tasks.
An example is stock. How many businesses do not spend more than they should when buying a material that will not be used soon? That requires a cost with storage. Improving the purchasing process is an example of continuous improvement applied to the logistics cost.
As we have seen in this article, logistics costs can be reduced without affecting the quality of services or compromising the company’s activities. Managers should just be willing to access the largest source of information about their business: the organization itself.
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