Benefits Of Good Logistics

October 5, 2023
Photo by Alexander Isreb from Pexels

Logistics can either drive growth and good business or hinder it. It’s an essential element of supply chain management to consider how logistics can be optimized, how it aligns with the end goal, and how to maximize the advantages, benefits, and profits that come from it. 

Good logistics involves efficiently managing and storing products. The third party logistics company delivers goods to the customer promptly. It also provides data data to constantly drive strong, solid decision-making. 

Here is what happens when all of it comes together. Here are the benefits of good logistics.

Bad Logistics Kills Profitability

If there is no other reason to have good logistics, let it be said that bad logistics quickly increase expenses to such a degree that profitability will inevitably be pushed out of reach. If your business is going to be profitable, it requires excellent logistics planning.

Identify Non-Profitable Products

Some products are not worth the storage they’re given in a warehouse. With good logistics, you have the data to know whether spending on storage for products with sluggish sales is worth it.

You Ensure Customer Satisfaction

A product that is delivered late. A product that is delivered broken. A product that never is delivered at all. These are situations every company wants to avoid. With good logistics, you prioritize customer satisfaction and minimize the risk of these major errors, which can drastically negatively impact any brand’s reputation.

Transportation Is Faster and Better

In good logistics, a manager finds the best transportation carrier for their needs based on cost, speed, and distance. You can optimize routes, especially if global shipments go through your logistics chain. 

Customs, tariffs, compliance, and regulations are all factored in here. A lot can go wrong with logistics transportation, but with good logistics, you can put systems in place to minimize the risk of variables going wrong.

You Optimize Your Shipping Costs

Shipping and transportation costs vary wildly depending on weight, packaging type, shipping provider, etc. As you engage with good logistics, you search out the best shipping rates and conditions for your company, ending inefficient spending.

You Protect Inventory Costs

By finding suitable warehousing, storing and ordering the right amount of inventory, and using logistics software to monitor where inventory is and where it’s going, you can ensure you have enough to meet demand.

Order Fulfillment Moves Along Quicker

Order fulfillment can prove to be very inefficient for a lot of companies who don’t have experience with good logistics. This wastes manpower in a big way. 

As orders are picked, packaged, labelled, and shipped, reinforcing best practices according to the conditions of warehousing and transportation equates to a better overall experience for workers, vendors, suppliers, and customers.

You Know Where Your Assets Are

Having good logistics, you can automate and track the movement of assets using RFID tags or GPS tracking. This allows you to locate where a product is and whether its estimated delivery time is accurate.

You Remain Competitive

Good logistics is, in part, automated. It generates data as products move along. This allows you to see how efficient or inefficient various processes are and adjust accordingly. With good logistics, you don’t let inefficiencies go on too long and can respond much quicker.

You Save Yourself a Lot of Paperwork

Alongside the generated data, good logistics automates a lot of paperwork that would otherwise have to be done manually for you and related partners. You can create processes wherein shipping labels are automatically printed, transactions are entered into ledgers and balance sheets, pickups are ordered and arranged, receipts are generated and issued, and more. This makes logistics a lot easier and less time-consuming to manage.

Confidence in Having the Right Warehousing

Warehouse management is a big component of logistics. For your product and business, you need the right warehouse with the correct space and accommodations, i.e. cold storage, docking facilities, and proximity to transportation.

You Can Plan for Unavoidable Obstacles

Especially with the transportation side of things, logistics can encounter many obstacles. Adverse weather conditions. Wars and political conflicts. Supply chain issues. When logistics are being overseen and monitored, and planning is in place, you make the most of a bad situation and move forward confidently.

You Can Accurately Forecast Demand

Good logistics is good business, plain and simple, because you can forecast inventory demand. Ensure you never run short on products or materials and that capital is not lost trying to rush-order required assets during busy periods.

You Can Forecast When To Offer Discounts

A large part of good logistics is inventory cost management. If you know there’s a slow period coming, and you want to keep the sales coming on, you can determine when to offer discount pricing or incentives to purchase. This can help you with storage costs and inventory reordering and keep profits high during sales quarters high and low.

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