Making Sense of Cost Reduction in Logistics Management

Logistics, in and of itself, is a complex web of vendors, inventory management, warehouses, distribution centres, transportation routes and hubs. Trying to figure just how and where to save money and cut costs can be a confusing undertaking for any logistics supply manager. 

With the economy becoming more competitive by the day, the key is to start with a smart mix of processes, analytics and technology. The goal is to simplify logistics networks, mitigate losses, and optimize the associated costs.

Here is the best way to reduce the costs of your logistics management:

Smarter Processes Increase Cost Efficiency
Making your supply chain as efficient as possible is the key to logistics management success. By taking a very detailed look at your operations, you can develop key performance indicators, such as asset utilization and median loading time, and start to figure out how they relate to your costs. Then identify what is most closely associated to strong performance. Next, compare your data to industry standards and develop a plan to close the gap.

Utilize Logistics Analysis to Create Effective Strategies

In today’s technology-driven world, there is data for just about everything. Finding ways to make that data work for you and your business objectives is very important when developing strategies to lower logistics supply chain costs. Tools such as network optimization, carrier sourcing and freight lane analysis are just a few. Select a logistics analysis tool that can quickly analyse the most “what if” scenarios and assess the risks in relation to spend.

Make Technology Work for Your Budget

In order for technology to be most effective, an understanding of the overall processes must come first. Upgrading your software without updating your processes could essentially make the problem worse. Selecting technology should simplify processes, expedite exception handling, and reduce systems/application complexity.

The key to effectively reducing costs in logistics management is to create a smarter mix of processes, analytics, and technology. By making all three work for you, your overall logistics supply chain will be more effective and efficient, helping you reduce your costs across the board. 

Created by Expense Reduction Analysts USA