Reap The Benefits Of Logistics Management

Logistics management encompasses many aspects that relate to the operation of all stages in a company's supply chain, including opportunity costs and process flows. This can be, for example, through the purchase and transportation of raw materials to ensure production, production process management and performance monitoring. In this post we'll talk about what logistics management is and how it can improve your business.

How Can Logistics Management Improve Your Business?

- Logistics management is more than just shipping at a low cost. It includes many other aspects related to the operation of all stages of your supply chain; allowing you to work smarter not harder by reducing costs and removing frictions from operations.

- Logistics management allows you to manage your costs and improve efficiency through the analysis of data. For example, companies can make a profit by buying in bulk and then selling at a smaller price direct to the consumer.

- It aids you in making better decisions based on the facts and not just on opinion, by analysing large amounts of historical data to identify trends that relate to previous business performance.

- The process can be used at many points throughout your supply chain allowing you to analyse numerous areas within your company that will help you streamline operations and improve your bottom line.

- This can include the implementation of transportation technology, which can be used to optimise processes and ensure that goods get to their destination on time.

- It provides a means for you to understand what steps are required to get goods from A to B in the shortest possible time.

– It allows you to understand if costs are being incurred due to inefficiencies and how this can be fixed by implementing changes such as outsourcing certain parts of your business or working with partners who are more efficient within their own supply chain.

- The process reduces dependency on third parties by having a direct control over your supply chain; allowing you to create long lasting relationships with other companies who can provide goods and services in return for something that is beneficial for them.

- It can be used to manage specific parts of your supply chain by looking at the main areas that 'cost' your business money. These could include areas such as shipping, warehousing, overseas production and inventory.

– Logistics management uses sophisticated software to identify where there are bottlenecks in your supply chain; pointing you in the right direction for improving efficiency and reducing costs.

Longer view:  Marketing professionals should be paying close attention to logistics management. Companies that can effectively manage their supply chains are going to have a competitive advantage in the marketplace.  There will be more companies realizing this as this article becomes more widely read.  As a marketer, you need to be thinking about what impacts this will have on your company and your marketing efforts, including your product or service's distribution.

- You should also be aware that there are also other issues related to logistics management but are not directly related to the supply chain, such as:

- Ethical concerns – you may want to consider establishing clear ethical guidelines if you decide to outsource certain steps in your supply chain or use technologies that impact upon the supply chain on a large scale.  You must make sure that any costs associated with outsourcing are outweighed by the savings because it can lead to inefficiencies within the process.  This could be through the use of technology such as robotics and other means to reduce costs.  You must also consider the impact that a supplier's actions have upon your company, such as through the use of child labour or animal cruelty.  Some companies are starting to put ethics into play in terms of how they work with suppliers and how they treat their employees from other countries.

- Environmental concerns – this can include issues such as carbon emissions and oil spills.  For example, shipping containers are now known to produce significant amounts of carbon emissions when being transported from one country to another.  Delivering goods by air also has an adverse impact upon the environment.  This is why it is useful to look into the environmental credentials of your suppliers, especially those that are not from your country.  You should also consider whether you can have a more 'green' approach when managing your supply chain, for example by reducing transportation costs so that you can sell goods at a lower price.

- Illegal issues – illegal issues associated with the supply chain can include fraud and smuggling.  Fraud is commonly seen where there are counterfeit products being sold online and through 'black market' channels.  For example, your supplier may be selling low quality goods that are inferior to the ones you already sell.  This can be dealt with by having a proactive approach to work with suppliers and partners in your supply chain as part of your supply chain management process.  If you have an issue, it is important to contact the international customs authority so that they can help you identify any illegal issues quickly.  It is also important to note that more people are aware of the need for companies and countries to have clear contracts relating to importing and exporting goods due to the rise in fraudulent activity.

- Legal issues – this relates to where there is different legislation or regulations between countries or states.  It is important to have a clear understanding of your country's laws and their impact upon the transportation of goods to your company.  If you are shipping goods overseas, there may be export or import restrictions depending on where they were produced, as well as any tariffs that apply.  This will affect the way that you want to handle transportation of your products, and you should get legal advice before moving forward with these plans.

- Warranty issues - since these guidelines were originally written there has been a shift in terms of the way that companies look after their customers and the products they are supplied with.  This can include how companies deal with warranties that relate to their supply chain and whether they require warranty repair within an agreed timeframe.  It is also important to remember that you are legally responsible for any issues that are caused by your supply chain, which means it is important to have a regular update process with your suppliers and partners.

All in all, the principles behind this article should continue to be put into practice so as to make sure that companies continuously improve their supply chains and gain competitive advantage.  For example, I would strongly encourage a company using paper-based marketing methods to invest in electronic marketing so as to allow them to manage their inventory more effectively and without the costs associated with storage.  The same can be said for technology products like smart phone applications or the use of mobile apps such as Yodlee's Quickbooks API .

I hope you enjoyed this article and found it useful.  If you have any questions on supply chain management, please feel free to contact me at paul@internetmarketingninjas.com .

This article was written by Paul O'Donnell of Internet Marketing Ninjas , who help companies improve their marketing efforts by providing solutions that are based upon effective internet marketing tactics, new media and a passion for cutting-edge technology.  This article is Copyright Internet Marketing Ninjas Ltd and may be freely distributed in its entirety in any ezine, newsletter, blog or website as long as the Author Resource box remains intact, no alterations are made, the content is not used beyond the scope of this article and proper attribution is given.

Conclusion

As part of any marketing strategy, it is important to understand the basics of the supply chain process.  This is so that you can implement an effective online presence that delivers a high level of quality service to your customers.  In addition, you should also make sure that your company focuses on a more 'green' approach so as to reduce costs and improve profits.  It is important to realize that not every supplier will be able to provide every product, which means it is good practice to have a clear understanding of your market in order to find suppliers who are able to meet your needs.