Antonio Pérez Carmona
6 Cost Reduction Benefits From Optimized Transportation Management By: Adam Robinson
One of the main goals of any business is to provide high-quality customer service to customers. With a proactive plan towards an eye on optimized transportation management that is well executed can make the difference between excellent customer service, and customers looking elsewhere for their needs. The benefits of a streamlined process for delivering goods includes saving money on transportation costs, faster delivery time to customers, and the ability to use available warehouse space more effectively.
Measurable Benefits of a Third Party Logistics Company on Transportation Costs
When a third party logistics company is in place to lead and execute optimized transportation management, there are quantifiable benefits. The costs associated with getting products from the warehouse to the final destination are easy to review. With a logistics company streamlining and studying the entire process, lower costs for shipping and storage are common.
A reduction in product breakage because of a lack of proper packaging is also a measurable benefit. With the use of effecting packaging techniques and excellent quality control, products being delivered aren’t being destroyed on their way to the customer. Less product breakage results in a more profitable bottom line.
The Effective Use of Warehouse Space
Warehouse space can be at a premium for many large businesses, and a strategic and optimized transportation management plan is the only way to ensure that the warehouse space is used effectively. Keeping the flow of products in and out of a warehouse moving smoothly, saves time and money. The better the flow is controlled, the less warehouse space that will be needed. Getting products in and back out the door on to customers is the most effective use of time and space. The less warehouse space that is needed, the lower the overhead costs are for the business.
The Process Can be Cross Optimized for Maximum Efficiency
In the past, it was either up to the transportation team or the warehouse to ensure that products were stored correctly and then delivered to customers in an efficient, cost-effective manner. With new technology in place, such as a transportation management system integrated into a warehouse management system, management of the procurement, storage, packing and delivery process is a collaborative effort between all parties integrated into the system. This allows for better communication between staff and provides employees with the ability to check on the status of any job that is within their parameters.
Communication Across All Aspects of Transportation is the Key to Success
With a solid communication strategy in place, it is easier for businesses to find problems in the delivery system. If too many packages are breaking on delivery, this information is known quickly. The packaging department can work to rectify the problem before it becomes an excessive problem for the company. Timing is everything in a large business that gathers products and then delivers them on to customers, and good communication through an integrated system is the only way to be successful in the competitive business market today.
Optimized Transportation Management Needs Vary by Company
When a company doesn’t ship by the truckload but instead ships less than truckload packages throughout to customers, maximizing efficiency is crucial to maintaining a profit. Shipping can get expensive, and a disorganized system will result in rising costs. Optimized transportation management needs vary by company, but if your company is large and you are experiencing higher than average shipping costs, this could be due to a lack of optimization of your products as they leave the warehouse. Proactive planning will reduce the costs of shipping products out to customers, but a solid plan is only as good as the follow through. Consistent overview of strategy all plans is necessary for a continually streamlined process that doesn’t waiver from the main task at hand.
Customer Satisfaction is the Key to Success for any Business
Customers want their orders, and they want them fast. They want the products they have paid money for to arrive fast, and without damage. One damaged package can result in a lost customer for life. To be successful in business and win out over the competition, a logistical plan for optimized transportation management to keep your customers happy is critical to your overall profit and business growth. It is easy for customers to provide you with bad press. With a simple picture of damaged goods and a poorly packaged item shared in social media, your reputation can get tarnished.
It is important to stay on top of the entire product flow of your business from procurement to delivery. With a solid integration plan in place, you will gain loyal customers, streamline your delivery processes, and save money because of a decrease in product damage. When you want to improve your profit margin, it’s a great idea to consider your needs by filling out this 3PL checklist and start searching out the best third party logistics company for solution ideas that match your company’s needs.