The global logistics market has enjoyed exponential growth of late, reaching a cumulative value of $4.730 billion in 2018. This came about as a result of an amalgamation of supply and demand side trends, and recent levels of growth show no sign of abating any time soon.
Despite this, logistics is one of the biggest challenges facing any product-oriented business in the digital age, particularly in an age where firms are able to sell online and ship goods across the globe.
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With this in mind, entrepreneurs need to invest heavily in their logistics and create a supportive infrastructure if they’re to optimise their margins. Here are some steps towards achieving these objectives:
Understand the Objective
This may sound slightly unusual, as surely the objective of logistics is to deliver consumer goods as quickly and efficiently as possible.
However, there are some instances in which your primary objective may be to establish yourself as a low-cost service provider, and in this case you’ll need to find ways of reducing the amounts that you spend often at the expense of lead-time and other metrics.
For small or individual shipments, this may mean using established courier resources to calculate the best and most affordable prices, regardless of how these savings impact on the service or the lead-times provided.
Both of these strategies are perfectly viable from a business perspective, but the most important thing is that you have a clear understanding of your objectives and build on this as a solid foundation.
Focus on What your Consumers Want
Regardless of the objectives that underpin your business’s logistics strategy, you’ll need to ensure that you meet the needs of your customers if you’re to succeed over a sustained period of time.
This is a considerable issue in the modern age, with the research firm Supply Chain Insights having revealed that only 2% of businesses considered their ability to respond to the needs of customers to be excellent.
You should therefore make it a priority to bridge this considerable gap, as you strive to understand the precise needs and expectations of your customers before tailoring your service to meet (and hopefully exceed) them over time.
For example, your customer may value real-time communication and updates over faster delivery times, and this should inform your decision-making and how you structure your logistics service.
Make Visibility and Collaboration Key Watchwords
Regardless of your strategy and how you choose to structure your logistics, there are some aspects of the supply chain that will impact directly on the quality of your delivery service.
These include visibility and collaboration, with the former enabling firms to communicate clearly with their customers and suppliers in real-time.
As for collaboration, this makes it far easier to simultaneously minimise your inventory and shorten your lead times, by partnering with warehouses and co-packers that have additional capacity.
Together, these considerations can really boost your delivery service and transform the logistics within your business.
