If you run your own business’s supply chain, be it delivery, warehousing, or freight, then cost-effectiveness should always be at the very top of your list of priorities, right behind getting things where they need to be on time. As such, we’re going to take a closer look at where people tend to lose money running their own supply chain and how you can cut those costs.
Loss and lost goods
It is vital to track the passage of goods through your business from beginning to end and to pay attention to where you’re losing them. This way, you can find the solutions that best apply. For instance, if you are finding that goods end up getting lost too easily in a warehouse, then an inventory management system like Q Stock can be a great help in ensuring it happens less often.
The costs of keeping a fleet
One of the easiest ways to save money on the vehicles in your business is to simply take better care of them. Routine preventative maintenance will not only reduce the costs of avoidable repairs but can also help drivers be safer on the road, which reduces the overall cost of accidents to the business, as well. Businesses can also help driver safety by getting something like CSA FMCSA compliance software so that drivers know what is expected of them, and assign any necessary training to those who have areas they could improve in. There are other costs of keeping a fleet of road vehicles, but this tends to be one of the biggest.
Buying and selling poorly
Any transport and freight vehicles you use will have to be bought and sold at various points. If you don’t have access to a broad marketplace such as ILS Mart, especially for more niche needs such as marine shipping parts, then you can easily end up spending too much or not finding a seller. As such, you can end up having old parts around, costing you space and money.
Finding those little inefficiencies
Just as you should be tracking product loss, you should be tracking the time lost due to inefficient practices by your team, as well. Sometimes, it’s a problem with an individual, sometimes it requires systematic approach, such as looking at the way your team handles certain workflows. One example is that using GPS tracking equipment like Verizon Connect can help you get a better idea of how efficiently the drivers of your fleet are making their journeys.
Don’t be afraid to negotiate
If you have to rely on outsourced service providers, there is nothing wrong with that. However, you should always be willing to negotiate from a point of strength. If you’re looking for a long-term provider, then suppliers, fulfillment and freight providers have a good reason to lower their initial prices: it helps improve your overall lifetime value as a client. Be willing to spend a little time haggling price before you agree to any deal with an outsourced provider.
The above ideas are based on only some of the big issues of the cost when running your own supply chain. Be sure to audit where you’re spending or losing money to find your own sources of inefficiency that can be reduced.
Infographic created by WSI, a 3pl distribution company