In general, for an import and distribution company, in the total costs, the largest share of expenditure on activities lies with the nature of logistics. Therefore, efforts to streamline the activities are channeled primarily to logistical operations. Here are some alternatives to optimize logistics costs.
A first option is represented by the outsourcing of these operations, in case there is a logistics operator able to provide quality services at least similar to the one already existing at a competitive price.
In such an operator you may choose to develop a logistics park in order to provide specialized services to the outside. It is usual to separate activities in a logistics company alone, which provides logistical services for both company’s distribution activities, and for other similar companies. Basically, it creates the necessary logistics operator profile for existing distribution.
The third variant is the optimization of existing logistics park, with the necessary adjustments. Mainly, it consists in reorganizing deposit (goods and personnel), management of fleet efficiency, streamlining the process of redistribution and purchasing goods between warehouses, creating effective procedures for organizing work in order to pick orders from customers and tracking the progress of their deliveries. Basically, to streamline logistic costs, a complex operation to the whole company.
This operation involves to a great extent the existence of an information system able to automate workflows and to track operational costs. In terms of tracking costs, an advanced way of controlling, integrated with the financial accounting and operational modules represents the tool and analysis necessary to achieve the objective set above. This module must be doubled in case of a module of fleet management and a Warehouse Management System (WMS).
What is an economy for a minute and a half per order when you have 2000 orders a day?
A deposit of medium-size (3,000 – 5,000 square meters), which is operational 24 / 7, can have 20-30 per shift operators. On a daily average of 2,000 orders, a savings of 1.5 minutes to prepare a single command provides a benefit of 1000 minutes / person / shift = 16.66 hours / man / shift = 2 operators / shift. That means 20 people / shift savings of 10% of the costs of preparing the orders. Besides this, you reduce the cost of management related management personnel, increase the quality of delivery (by eliminating human error), so by default, you increase the degree of satisfaction of clients.
Steps towards deposit automation
In what concerns automation in warehouses, the ideal case is that of “digital deposit”, completely automated. To achieve this type of deposit it is required substantial initial investment in software and equipment. If the company is not ready for all the cost, there is a middle path, implementing a system of WM (Warehouse Management), able to bring significant cost reductions.
A first step may be done by choosing a “paper based” variant – based on printing notes for the collection and storage. This type of system automatically organizes the storage of goods, retrieval efficiency of the training time of an order and can provide major benefits in terms of minimum investment. Minus include lack of control correctness collection point of being in the delivery, check where the differences between command and stuff collected appear. Basically, if a product is in multiple cells, and indicates the one to collect, you can not check in real time if, for convenience, another cell was used.
After achieving this first step in the store and after evaluation of the benefits of current and potential progress, you can move on to implement an integrated wireless system, which has features and expanded control over the quality of operations performed. The degree of automation can be increased over time as processes develop and Investment resources become available.
Collateral benefits of a Warehouse Management system
Considering the fact that in general the degree of rotation of the labor for a warehouse operation is high, an effective system of WM can reduce the major integration of newly employed staff and create a reduction of the impact of staff rotation on logistics processes, so as to generate cost reductions. It is no longer required in-depth knowledge of products in order to prepare an order because the system will indicate the source of products and will check the accuracy of bar code collection. So a new employee can become operational from the first hour of work.
Logistic costs and the supply
A reduction of logistics costs may come from an accurate supply. An overloaded with cargo generates additional costs of storage and handling and a lack of supply of stock generates incomplete orders, therefore a reduction in the efficiency of deliveries.
Fleet management has two components: the administration costs of operating the fleet and improving its use. The first part is divided in turn into the analysis and reduction of costs and activities and in a proactive warning section on planned or recurring activities. Information used is specialized to a specific fleet manager car: accident, revisions, consumption, fines, etc. roadmap. The second component involves the integration with other modules as sources of data: customer orders, feature articles, drivers, delivery routes, etc. divisions. Integration implies a clear organization by several departments, with clear rules and responsibilities. A good implementation of such integration is related to the quality of the system, and to the maturity of the organization.