How do you coordinate logistics costs with other departments?

By analyzing the P&L lines. After this deep analysis you will find several opportunities and trigger projects amongst other departments seeking costs avoidances, savings and leaning , not only on logistics, but quality, production, ops, finance and ESG.

The first step is to correctly identify the cargo to be transported, using a tonnage based calculation is the biggest mistake made by other departments, & this error only then gets highlighted at the transport stage. Early involvement with the transport department at tendering stage will correct this.

For this to work, everyone has to use the same figures and formula. Unfortunately producers and haulers don't. In particular the producer of goods doesn't calculate transport costs the way a transport company does. They have forgotten to, after they got rid of their own fleet of lorries 30 plus years ago. Many transport planners don't know it either. Ask any of them what is included in a cost calculation to run a lorry. Unless they are old school, many don't know. It is too easy to read it off a chart someone compiled years ago. Changes in fuel prices, drivers wages, tyres, vehicle servicing costs, estimated yearly repair costs, insurance, depreciation for vehicles aren't taken into account anymore. It's a reason why many fail.

We facilitate coordination of logistics costs across departments through our monthly S&OP process and quarterly forecasting. These collaborative forums bring together representatives from various departments to align logistics strategies with organizational goals. During S&OP meetings, we review sales data, production plans, and inventory levels, ensuring a proactive response to potential challenges. The quarterly forecasting process provides a broader outlook, allowing us to refine logistics strategies in line with evolving market trends. This integrated approach enhances communication, fosters adaptability, and ensures that logistics costs are effectively managed to contribute to overall organizational success.

The logistic module always missing in ERP. They way we have order screen same way we should have shipment screens and all associated cost should be captured and then it can distribute with orders which material are moved. The capture the real cost of movement . We need to have seprate Tab with set of field in material master . We should know weight and dimension of material . How many unit can be loaded in pallet or container, shipment guide lines. If we have these info and we have seprate module to manage shipment then getting cost is achievable.

Aligning logistics objectives with business goals is essential to ensure that supply chain operations contribute to the overall success of the company. This involves understanding the broader objectives of the business and tailoring logistics strategies to support those goals. For instance, if a business aims to reduce costs, logistics efforts could focus on optimizing transportation routes or minimizing inventory holding expenses. If the goal is to improve customer satisfaction, logistics might prioritize faster delivery times and accurate order fulfillment. Regularly reviewing and adjusting logistics strategies in alignment with changing business goals helps maintain a cohesive and effective approach.

This is one of the most important actions to be aligned, just communicating the drivers won’t be enough. Why? - because drivers means mainly KPIs or P&L lines. We have to be very specific about the processes, actions or decisions under the others verticals can take action to move the needle. How? - clear communication and collaboration for projects / initiatives.

Effective communication and collaboration between different departments within logistics is crucial for streamlining operations and ensuring the smooth flow of goods. Regular meetings, cross-functional teams, and shared information platforms can all help facilitate this process. By establishing clear communication channels and fostering collaboration, departments can coordinate efforts, address challenges, and make informed decisions that positively impact the entire logistics process. This could involve sharing real-time inventory data, discussing transportation requirements, and aligning on order processing procedures, among other activities.

Technology can build a bridge between departments and act as a binder by bringing real-time data to the fingertips. Technology can Maximize Automation and Digitization of Day-to-Day Operations

Implementing cross-functional teams and projects in logistics involves several steps: Identify Goals: Define the objectives of the cross-functional teams and projects. This could be improving efficiency, reducing costs, enhancing customer satisfaction, etc. Team Composition: Form teams comprising members from different departments like operations, supply chain, IT, finance, and customer service. Each member brings a unique skill set and perspective. Clear Roles: Assign clear roles and responsibilities to each team member. Ensure that their tasks align with their expertise and contribute to the project's success.

Technology LMS Intergration. Implement technology solutions (Logistics Management systems) that enable real-time tracking and reporting of logistics costs. Ensure that these systems are accessible to relevant departments. Create awareness.

Cost Analysis and Reporting: Develop regular reports and analyses that provide insights into logistics costs. Share these reports with relevant departments to help them understand how their decisions and actions impact logistics expenses.

A área de logística deve estar em constante evolu??o no que diz respeito ao controle de custos, é importante buscar constantemente feedback das outras áreas envolvidas no negócio de como melhorar continuamente. é importante usar ferramentas de Finan?as para que a gest?o ocorra de forma profissional.

To continuously improve in logistics, stay updated on industry trends, adopt new technologies, analyze data to identify inefficiencies, gather feedback from stakeholders, and seek out training and education opportunities. Networking with professionals in the field and learning from their experiences can also be valuable. Remember that improvement is an ongoing process that requires adaptability and a commitment to refining your practices.

Also having a feedback loop process to other verticals will be great. Showing them the impact that was made by the actions / projects they took, for sure will keep them engage to keep the pace.

?? Every situation is unique but the main steps are as follows : Minimize Travel Times.? Centralize Procurement.? Consolidate Shipments.? Focus On Informed Decision Making.? Automate Warehouse and Logistics Processes.? Outsource Logistics to a 3PL.

1. Regularly communicate with other departments involved in the logistics process, such as procurement, finance, and operations. This ensures everyone is on the same page and can contribute their insights. 2. Provide relevant cost data and analysis to other departments so they have a clear understanding of the logistics expenses. 3. Collaborate on cost-saving initiatives: Work together with other departments to identify opportunities for cost savings. This could involve exploring alternative transportation methods, optimizing inventory levels, or streamlining processes. 4. Align goals and objectives: Ensure that the goals and objectives of different departments are aligned with the overall logistics cost management strategy.

Activity Based Costing is a very effective way to manage costs and keep your supply chain lean. A few of the drivers for warehouse operations could be: 1. Storage Cost 2. Distribution Cost 3. Handling Just like any 3PL offerings, ensure the cost you incur across the drivers is cross-charged to the business functions consuming them. This would increase the focus on optimal usage preventing many of the new age issues like high stock cover, and low stock turn, inaccurate forecasting, and planning.