6 Main Logistics Focus To Increase Corporate Profits

Table of Content

6 Main Logistics Focus To Increase Corporate Profits

In this article, I will discuss 6 main logistics focuses to improve the company's profit. These six main focuses you can apply to your company to reduce costs and increase company profits. According to a data logistic cost that must be issued by the company now achieve many more than 8% of total GDP.

"One of the primary keys to reducing the cost of logistics is: " Treat people well then the profit will follow. "

Here are the 6 main logistics focuses to improve the company's profit, including the following:

1. Cost Reduction Logistics by Focusing on Safety

First and the most important thing is the sender and the logistics service provider must understand the importance of safety. Ensure that every operational activity of your warehouse is secure. Be proactive and always focus on the safety and safety of the workers. Avoid the risk of injury that could be an additional cost for the company. 

If you are not focused on security and safety, in the sense that you have too many security and safety issues, then the government can revoke your company's license. Assign a security manager to be responsible for security and safety issues and ongoing safety training.

2. Focus on Labor Costs

You should always analyze against possible labor reductions for each of your warehousing operations. Every warehousing operational activity should focus on labor costs. There is software about the workforce management system that can help you in managing your work in the warehouse.

Incentive programs can be applied to warehousing employees who do their job well. You can tap and reduce your warehousing operating overhead. This will increase the productivity of your workers and of course, will require little staff and reduce the amount of equipment that should be provided.

3. Focus on Care and Prevention

Creating and conducting maintenance and prevention of equipment in the warehouse is one way to achieve the purpose of reducing logistics costs. The cost of maintenance of equipment that should be spent will be much cheaper than the cost of repairing equipment that has been damaged. This does not include risks and the possibility of faulty equipment can harm your workers.

If that is the case, then the cost you have to spend doubled is the cost of repairs and maintenance costs of your worker.

4. Focus on Using Technology & System

Citing an article in the Supply Chain Management Review, productivity will increase from the use of voice command tools that are implemented and can increase warehouse efficiency by up to 30 percent.

A good warehouse management system can help reduce warehouse operating costs, among others, by automating counting cycles and maintaining location control. Your good warehouse layout can also save on operational costs.

What happens in the future for warehousing activities is the use of robots. The tendency to use technology aims to rule out inefficiencies and logistics costs.

Reducing the goods Return to vendors (RTV) due to incorrect delivery or damage during delivery can help your company in reducing the cost of logistics. Reduce the need for additional space by reviewing outdated stock items, stationery stocks, or slow stocks moving and sending recommendation disposition to top management. Take the time it takes to include this in Management Review Board (MRB) each month.

What large corporations do to reduce their logistics costs is to automate. It uses Warehouse Execution System (WES) and incorporates Warehouse Management System (WMS) and also Warehouse Control System (WCS).

Organizing, automating, and optimizing manual processes can reduce the need for workers or staff, centralize low-cost warehouse operations, and create a more proactive approach to ensuring customer satisfaction. With automated and cost-effective transportation and logistics systems, companies can apply major strategic changes to provide visibility, reduce costs, and increase service levels to customers.

5. Focus on Suppliers to Reduce Logistics Costs

A reduction in supplier-focused logistics costs is collaborating and partnering with suppliers to help reduce logistics costs. Suppliers can sometimes absorb the cost of logistics directly. Create a consortium of purchases (clients and some of their suppliers) to buy the necessary logistics equipment for example fuel transport for logistics purposes. With this consortium then you can buy in larger quantities.

Don't be afraid and try to negotiate with suppliers, invite suppliers to your warehousing facility with a structured agenda. Focus on a single topic that analyzes your product and everything involved to reduce your logistics costs.

Suppliers are specialists in their field of expertise. They can help with how to work with you and be creative in the cost reduction program in a win-win solution.

6. Focus on Your Customers

Keeping every shipment of goods to customers at low logistics costs and ensuring the safety of goods during delivery will make your customers feel happy (so that the company can retain them as customers). By exceeding customer expectations, the company can keep its business well. This is important because there is a direct coherency between customer satisfaction and the cost reduction of logistics. Service to customer satisfaction should always be taken into account in each logistic fee change measurement.

That's the article about the 6 main logistics focus to increase corporate profits. Hopefully, it will give an added value to your knowledge.

Please read more articles about Supply Chain, Warehouse, Purchasing, PPIC in this blog. Many articles can add to your insight.

Share :