Cost Analysis in Logistics Management Cost analysis is relevant to logistics management because resources are needed to operate all major components of a logistics system (see fi gure 1). The components range from procurement, to warehousing, to transport and information systems; and they involve human, capital, and material inputs.
Good logistics managers feel this rush constantly as they reduce costs along the supply chain by optimizing routings, cost and filings, as well as by hunting out the best deals with carriers. Good logistics management is the key to international business.
Cost Analysis: The Single Most Important Tool of the Purchasing Profession. Our dominant obligation and duty as purchasing professionals is to manage costs. To do so, we must be able to identify and analyze the costs that make up the goods and services we buy.
Additionally, meeting customers' demands and providing superior service are also goals of good logistics management. What is Logistics Management? Logistic management is known as the control and supervision of the movement of goods. However, the scope of managed processes reaches far more than that.
Logistics inventory costs depend on the volume of products that the company works with and the period that the material remains in the warehouse. Thus, we can conclude that the longer the time and quantity of products, the greater the logistics expenses.
Fundamental to make a good impression on the customer who receives your product, the packaging acts on the correct packaging of the items. Thus, it is possible to redouble safety and avoid risks of accidents and defects in goods.
The transportation in logistical costs are by far one that most impacts companies, especially those with their own fleet. This is because this sector involves the acquisition of vehicles, fuel, maintenance, depreciation, idleness, among others.
With the competitiveness of the market increasing, companies need to deal with the challenge of making their deliveries even faster and more efficient. The good news is that with technological advances these tasks have become easier, since they rely on the automation process.
As mentioned above, knowing about logistics pricing is an essential step in knowing what steps to take. With well-established expenses, the next step is to create an action plan within each logistics sector and improve the techniques.
When there is no structuring in logistics processes, each employee acts in the way he believes he is right, which can generate failures and waste. With that in mind, process mapping may be the best solution, since it consists of adopting more efficient practices.
Performing tasks in manual ways often drives the increase in expenses, since more time is lost and the risk of errors is greater. Therefore, automating processes is much more advantageous. With programmed machines and software, the work is done quickly and efficiently.
According to the definition from The Council of Supply Chain Management, “logistics management is a part of supply chain management that plans, implements, and controls the efficient flow and storage of goods, services, and related information in order to meet customers’ requirements”.
Logistics planning improves your company's efficiency. With on-site logistics planning, your company can store materials properly while also locating them quickly. Therefore, you'll be able to speed up transactions and improve business activity.
Therefore, it has a direct impact on your customers' satisfaction. Improved customer service can bring an excellent reputation to a company's brand and help generate more business. In addition, a well-arranged and high-performing freight transportation process can significantly contribute to customer experience and exceed shippers' expectations. Finally, well-handled logistics contributes to the overall positive customer experience.
Managing logistics with efficiency will give a company control over inbound freight, keep inventory at optimal levels, organize the reverse flow of goods, and utilize freight moves on the proper transportation modes – all of which can cut costs significantly . Inbound freight can account for about 40 percent of general supply chain costs, which means good logistic management lets shippers tap into hidden opportunities for savings.
Good management strategy aims to constantly optimize transportation processes and eliminate disruptions. Therefore, it has a direct impact on your customers’ satisfaction.
That’s why it is important to know how to measure the effectiveness of any new practices. Increase revenue. Improve operating cost structure. Reduce overall transportation costs.
Good logistics managers feel this rush constantly as they reduce costs along the supply chain by optimizing routings, cost and filings, as well as by hunting out the best deals with carriers.
The duties of a logistics manager require an understanding of the supply chain, from the raw materials to the finished product, and the ability to keep track of many moving pieces at once.
Good logistics management is the key to international business. Any company looking to source and sell to international markets relies heavily on its logistics manager. By taking advantage of FTAs and special duty treatments, logistics managers can find the most cost-effective solutions and offset the financial impact of taking the business abroad.
1) No Products, No Company. It’s a basic fact of business that if a trading company doesn’t have inventory, then they have nothing to sell. With nothing to sell, there are no profits and the company ceases to exist. With every incoming shipment of supplies, the logistics manager is fulfilling the most elementary function ...