Part 6: Logistics Savings

Concept:

Everyone can help make savings on the cost of fulfilling orders. Transportation costs are significant part of the overall cost structure of your business. There are many areas where cost savings can be made.

Example:

  1. Are you encouraging customers to place fewer, larger orders?
  2. Are you educating customers to order pallet quantities which will help you make the most of vehicle usage?
  3. Have you agreed with the customer, as part of the overall contract, deliveries to a central distribution point, rather than radial deliveries to individual delivery points?
  4. Do you know what racking systems, height restrictions, capacity, etc. customers warehouses have to help in pallet quantity planning?
  5. Do you charge for small orders or rush deliveries and have minimum carriage paid order quantities?
  6. Do you work with customers to tie in their order/delivery patterns with your route plans?
  7. Do you educate the customer on how to handle the product to avoid damages or returns?
  8. Do you route by post code, identifying the most efficient routing?
  9. If you outsource distribution, do you have a national deal with competitive rates?
  10. Do you offer a (small!) discount for full load quantity?
  11. Do you ensure you have the most efficient layout of your distribution warehouse?
  12. Do you maintain correct stock levels to avoid stock-outs or high stocks of slow moving lines?
  13. Can you double utilisation of vehicles e.g. out twice rather than once a day?
  14. Will your customers take night-time deliveries? (less traffic congestion and more convenient for them).
  15. Do you charge for storage of consignment stock as part of consignment stock deals?
  16. Do you encourage customer collections?

As you can see, other departments and most certainly Sales, have a key role to play in ensuring deliveries are made in the most efficient and cost-effective manner. There are significant cost savings to be made in this area – it might not be a sexy or glamorous part of the business, but it can be certainly help improve your profits.

The Growth Experts takes pride in ensuring that all of its advice and material on this site is current and relevant to our members. In certain pieces of material there may be reference to ‘time related’ situations (e.g. the Covid Pandemic). These pieces of material may well, in a number of cases, be left on the site because the advice and content therein remains relevant and of great value to businesses whatever their current challenges present.

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