A great logistics operation can provide opportunities for improving sales and financial performance. Resulting in a POSITIVE impact on profit. Logistics is no longer just an operational necessity
Logistics can increase sales.
Logisctics can improves sales by having a positive impact in many customer touch-points, notably in the following four areas;
1) Customer relationships with clear and accurate communication.
2) Service levels, following on from sales communication, logistics is the next and often last touchpoint with a customer. Get this correct and you will often receive repeat business or further business recommendations.
3) On-time fulfilment, getting it right and on time is key for positive reviews.
4) After sales service, not to be forgotton about is the full customer journey and how issues are rectified if they occur.
Logistics can decrease costs
Logistics function comprising of warehousing, packaging and transportation can be a large direct cost to a business impacting the gross margin. However, the logistics function are often able to support the business with regular review of the following costs;
1) Inventory holding, is the business holding the correct mix of stock in the right quantities to match customer demand?
2) Obsolescence, is slow-moving stock regularity monitored to ensure stock items do not become obsolete causing a stock write-off and also using up space in the warehouse?
3) Storage, is there planning for the location of stock items, for example, having fast-moving goods near the final pick and packing stations?
4) Damages, are they frequent? When they occur are they monitored and communicated back to finance in a timely
5) Transport, is the best mode of transport used? Should the company purchase, hire or lease transportation?
6) Labour efficiency, what shift patterns are required, is flexible working required? Is there regular training with sickness and accident monitoring?
7) Depot locations, where is the most efficient locations for the warehouse? Where are the suppliers and customers?
Do you have performance metrics for the above? Are you monitoring your achievements?
Do you need to create or streamline processes? Do you have the time or expertise within your company to develop and put a plan in place? See our business planning packages including process reviews and management accounts creation or refresh.
BIG opportunities for your business are achievable within your logistics function – don’t miss out!
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