Logistics - a key driver for improving supply chain margins
Logistics is a considerable part of supply chain costs. So far as profitability goes, this can be a true driver to improve supply chain costs. Logistics is an area of best practice that can contribute to your managing rising supply chain cost.
Let me identify approaches used that drastically increase savings potential in a distribution network.
Visibility for “Units” and “Dollars”
Creating supply chain transparency to help determine financial SCM drivers in order to achieve logistics goals is the first step. Each process that execute logistics must be measurable in terms of units and dollars relating to inventory that is in transit, on-order or stored. Opportunities for consolidation, Hidden cost of imports and closely monitoring planned-to-actual logistics execution for deviations are benefits of designing visibility for financial controls.
Process and Data “duet”
Data to control process for effectiveness and the process to create the required data sources to control process – are two sides of the savings coin. The drive to capture logistics benefits have to be far-reaching so managing processes and systems for sustained results is possible. Intuitive and early warning dashboards to measure and report on KPIs and Scorecards are the next step to transforming data into strategic supply chain intelligence.
Augment Savings through Technology
To move product as effectively as possible within the distribution network means supply chains have to invest in technology that can support such gains. Investing in both process-centered transactional systems and mobile applications can result in data-rich environment. Starting on a firm information foundation, logistics professionals can institute advanced practices such as predictive analysis and network modeling techniques that bring dramatic results and optimization opportunities.
Remaining competitive with the best in class logistics practices bring home the benefits of realizing profits both in the near and long term.