What Is The Key To A Successful Logistics Business?
Logistics refers to the management as well as coordination of inventory from its origin to the final destination
. The primary logistics activities include inventory warehousing, management of stock and freight transportation. The objective of a logistics company is to carry out the process in a streamlined and cost-effective manner.The life cycle of a product consists of all the steps from manufacture of the product to its consumption. Whenever a product is ready for use, the countdown for completion of the cycle begins. This implies that the lesser the time taken for delivery of product to the customer, the greater the profits of a company. So how can we streamline the process? The implementation of an effective logistics plan of action allows a company to rationalize the procedure.
Large manufacturing companies would hire a logistics team for routing the goods from the companys warehouse to the freight forwarding company and finally to the end-customer. They maintain a database system to keep a track of the entire inventory. Moreover, such companies monitor the levels of inventory to ensure that accumulation of supply does not take place. Often, the cost incurred in storage of inventory is higher than the expenditure incurred on transportation of products. Therefore, it is necessary to control the quantity of stock accumulated.
Apart from these, it is the responsibility of logistics team to find an economical means of transportation. Consequently, maintaining low freight rates is the key to success in a logistics operation. The improvements in technology utilized for tracking shipments has facilitated freight transportation. This has also enabled an increase in efficiency and decreased the communication gap between retailers and wholesalers. In addition, a logistics expert also needs to account for accurate transportation time. It is necessary for logistics companies to make sure that the shipments arrive in time.
A few trucking companies also mention that exact day and hour on which the delivery would be made. This is necessary since custom satisfaction is based on accurate accounting of merchandise and customer satisfaction. In addition, it has also enabled reduction in the cost of shipping freight. However if a logistics team focuses only on reduction of freight costs, it can lower the quality of customer service. Therefore, a logistics manager needs to maintain a balance between customer satisfaction and cost.
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