Logistics is a department in its own right in most medium and large companies. It influences the overall activity and requires good coordination between supply and customer demand. It is based on various indicators such as the rate of availability of products, delivery times, stock value, product rotation, the rate of filling of transport, the number of kilometers traveled for delivery, etc. These KPIs make it possible to evaluate the organization in place and identify areas for improvement.
The challenge is to optimize traffic and smooth the flow of materials over time. This makes order preparation more fluid and therefore more responsive. It becomes strategic to fully integrate this function within the organization. Logistics can then become a competitive advantage.
But what are the advantages of logistics management?
The advantages of logistics management are many
Lower procurement costs and therefore transport costs
Corporate logistics is first and foremost concerned with procurement management. This involves obtaining or purchasing goods and services while managing the various phases of the transaction: order processing and management, payment, receipt of the good or service.
One of the most important objectives of those responsible for purchasing management is to ensure that the company’s transactions are good value for money. This means negotiating to get the best price and quality. Good purchasing management then allows the company to generate better profits and increase its profitability.
Good purchasing management requires :
- meticulous selection of raw materials;
- careful monitoring of deliveries;
- thorough quality control;
- traffic control to ensure safety.
This means making comparisons between different products and suppliers to provide the company with the best possible goods, both in terms of quality and price.
Optimization of storage space
In addition to the purchasing process, a company must have efficient stock management. It is important to be able to optimize storage and at the same time reduce the costs associated with storage.
Inventory management involves, among other things:
- quality control of the goods;
- product safety;
- optimizing stock to avoid wastage or, on the contrary, stock shortages.
It ensures that the right quantity of goods is available in the right place at the right time. It also makes it possible to avoid storing products that have become useless or obsolete and yet continue to take up space and generate costs.
Better product traceability for satisfied customers
Stock administration and logistics management make it possible to track products in circulation and ensure that they arrive at their destination on time.
In concrete terms, several technological solutions offer the company the opportunity to guarantee better traceability and efficient control of its products. For example, the company can use Dynamics Nav App. As a result, the organization is able to focus on production. Finally, optimized logistics management implies a serious follow-up of parcel shipments. It is essential to respect the posted delivery deadlines and to ensure the integrity of the products in order to best satisfy the customers.
Advantages of logistics: Increasing productivity
Logistics in a company is above all a means of adopting an efficient organization for all employees. It allows each task to be better managed to save time and improve production quality, for example through Vendor Managed Inventory (VMI).
Once the best organization has been found, all departments in the company can benefit from the advantages of good logistics management. Better quality, more speed, simplified tasks: properly managed logistics bring many benefits to the company.
The various processes in the supply chain can be automated. In the end, everyone wins: employees have better tools to work with, managers have effective ways to control the costs and quality of their goods, and the customer benefits from a better service or product.
Improved customer satisfaction.
The ultimate goal of logistics is of course to always ensure the quality of the products or services offered by the company. In order to maintain and improve customer satisfaction. For a company to be sustainable over time, it must find new customers. But it must not forget to satisfy its current customers in order to keep them loyal.
Satisfying a customer allows the company to benefit from a good reputation. Whether by word of mouth or via reviews on the Internet. Building customer loyalty generates turnover without spending energy and money on advertising. Because the customer makes a purchase again without being prompted to do so. But simply because he was satisfied with his last experience with your company. Better still, they can give their opinion publicly to improve your brand image if they were satisfied, or damage it in the case of a bad experience.
To avoid bad experiences and succeed in satisfying its customers; the company must rely on its logistics division to offer the best possible services: goods always available, fast delivery, product quality, etc.
Last advantage of logistics: the competitive advantage
Logistics is a real competitive tool that aims to improve the coordination of the company’s services and mobilize them to pursue a common goal: customer satisfaction. In some business sectors, logistics can be a competitive advantage.
When a company relies on logistics, it benefits from various advantages that help it to improve the quality of its services and to distinguish itself.
First and foremost, logistics applied correctly in a company is a way to adopt an efficient organization. Indeed, it allows to better manage each task in order to save time and improve the quality of production. The various processes can even be automated. As a result, everyone wins: managers benefit from efficient means of controlling costs and quality; employees have better working tools and customers are offered better quality services or products.
Finally, as the final goal of logistics is always to ensure the good quality of the products and services offered in order to improve customer satisfaction, the company can take advantage of this practice to offer the best services, the best goods available on the market, the fastest delivery and the best quality for the price.
Knowing your expenses and costs allows the company to better control them. Knowing your expenses and costs allows you to control them better, so your strategic decisions become more relevant.
We hope you have enjoyed this article and that it has answered your questions. Please feel free to contact us or leave a comment. We’d be happy to talk with you.
To complete your learning and to learn a more specific subject we suggest reading this article: Main local challenges for e-commerce delivery in EU.