When a customer makes a purchase, a straightforward process unfolds involving several key steps. First, the seller checks their inventory to ensure they have the items in stock. If the items are available, the customer is prompted to make a payment, and the seller prepares the order along with the necessary paperwork. A warehouse worker then locates the items, packages them, and arranges for their delivery. Finally, a truck brings the order to the customer’s door.
Your clients expect this experience to be flawless. They want the product to function properly and be available at the right time and place. You can measure your ability to fulfill orders effectively by evaluating three metrics:
- Reliability: Consistently delivering the right item to the right place at the right time helps establish a reputation as a reliable seller. To achieve reliability, maintaining high accuracy throughout all business operations is essential. Doing so involves ensuring that products are manufactured according to specifications, accurately picking items from the warehouse, securely packaging products, and delivering them promptly. In today’s logistics landscape, leveraging productivity software and automation is crucial for achieving accuracy.
- Order cycle time: Cycle time starts the moment a customer places an order and continues to the point when the order is received. It includes transportation and delivery time, as well as processing and preparation time.
- Cost management: Lower shipping and handling costs enhance the appeal of your products to customers and fosters their loyalty.
Focusing on reliability, order cycle time, and cost when managing orders is crucial for positioning a business as a leader in the industry. However, cost can be a challenging factor to manage when transportation overhead is factored in. The movement of goods constitutes over 60% of total logistics costs, surpassing the combined expenses of warehousing, distribution, inventory management, and order processing. Knowing your suppliers and their reliability in delivering orders on time and comparing their performance to competing operators can lead to smoother deliveries.
Most goods rely on multiple transportation modes, known as intermodal transportation, when traveling from their origin to their destination. For example:
- Trucks are commonly used for both initial pick-up and final delivery.
- Rail transport is ideal for transporting large quantities of raw materials over long distances, albeit with limited flexibility and slower speeds.
- Air transport offers rapid delivery but at a higher cost, making it suitable for lightweight, high-value products. Water transportation, particularly through ocean carriers, provides a cost-effective method for global commerce, although it operates more slowly.
Don’t overlook the environmental impact of your logistics decisions. Smaller, more frequent orders contribute to increased pollution from more frequent transportation, while larger orders may raise inventory holding costs. Analyzing the transportation network for a specific product and tracing its routes from suppliers to customers can reveal opportunities for efficiency improvements and cost reductions.
Consistently leveraging the best combination of transport modes for your supply chain needs can result in significant cost savings. It’s important to invest in effective spot bidding and freight management workflows to ensure that you consistently choose the most efficient combination of transportation mode, operator quality, and price.
While evaluating and balancing so many factors 24 hours a day, seven days a week, may seem intimidating, we can help. When you partner with us, our Control Tower analysts use their in-depth industry expertise and advanced business intelligence tools to make sure that you’ve identified the best key performance indicators for your business and that the right information is being collected to measure them. You’ll always have a clear and accurate understanding of what contributes to your success, and we’ll be fully focused on helping you achieve it.
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Check out our Services and Solutions portfolio to explore how our Control Tower services can help unlock the full potential of your logistics workflows and supercharge your supply chain operations. If you’re interested in partnering with us, visit our Contact page to get in touch.