Do you know the hidden costs of a poor logistics management system? Saved to DriveSupply chain management is one of the backbones of modern business.
The ability to move supplies and products to and from anywhere in the world is a miracle of modern industry, but plenty of companies aren’t taking advantage of it as well as they should.
Here, we will examine how vital it is to take your logistics needs seriously and what happens if you don’t.
Table of Contents
Lost Sales
Perhaps one of the most prominent issues is that if you’re unable to get the supply you need on time or you don’t have the fulfillment setup to get to your customers, you’ll lose sales.
Either you will run into unanticipated product shortages, especially in those high-demand periods where you could be making your best money, or you won’t have the vehicles and operators to get your products moving efficiently on the roads.
The money loss from this can have a genuine impact on the survivability of your business.
Higher Transportation Costs from Poor Logistics Management
Perhaps you might be able to adapt to the increased demand of unexpected sales if you do have the inventory that you need. However, relying on last-minute freight arrangements and hiring additional drivers can also drive your costs way up, so you can still end up losing the profit you should be making.
It can be a lot cheaper to arrange a long-standing partnership with 3PL companies rather than having to expand your existing logistics on the spot. Work with those that have the flexibility to meet your needs as and when they spike.
Customer Dissatisfaction
Whether it’s your ability to get the supply you need or to make deliveries to your customers, if it affects when and whether they get the products you want, it’s going to impact your bottom line not just immediately but in the long term.
If a customer finds a product they want is out of stock, they’re a lot more likely to go looking elsewhere. Otherwise, if they’re not able to rely on prompt and trackable deliveries, then they’re less likely to return in the future.
Your logistics is as important a part of your customer service as anything else.
More Stress And Worse Morale from Poor Logistics Management
Whether you and your team are trying to make do with less stock than you need, or you’re trying to get things running as quickly as possible to ensure prompt deliveries without the logistics to support it, don’t underestimate the mental impact this can have.
Forcing your warehouse team to work faster and faster, rather than smarter, is going to lead to theme burning out. Don’t forget the pressure it can add on your shoulders, as well, racing to prevent the lost revenue while your costs increase. The mental strain of poor logistics is a real drawback worth avoiding.
Conclusion: Improving Poor Logistics Managmeent
If your current supply chain system isn’t working for you, then you need to find the solutions that can make it work for you, whether that’s switching suppliers, outsourcing deliveries, or expanding your own operations to do it all in-house.
Otherwise your business will suffer from the consequences of inefficient logistics. You want to tackle the problem before it gets that bad for your business.