7 Logistics Management Tips For Small Business Owners
July 29, 2021
What are some logistic management tips for small business owners?
- Understand Your Objectives
- Focus On The Customer
- Improve Visibility and Collaboration
- Track The Cost Details
- Get Competitive Quotes
- Plan, Plan, and Plan
- Leverage Technology
For many small business owners, dealing with logistics could be a nightmare. However proper organization and management are needed in order for your products to sell and your business to succeed. That being said, it is critical that you give enough time and planning to create a well-oiled logistics machine to run your business efficiently. Without the right foundation, your business will struggle to run efficiently. So, here are seven handy logistics management tips for small business owners to help your business thrive and meet the demands of your customers.
Understand Your Objectives
Before you can begin to tackle your logistics, you have to understand your business’s overall objectives and strategy. Depending on what you’ve decided to make your competitive edge in the market — fast delivery time, low-cost products, etc — you make your logistics strategy around that.
For example, if you plan to give one of the fastest delivery services in the market, then your logistics should focus on improving your packaging and delivery operations.
After understanding your objectives, you can align your logistics with your business goals. These include your branding and marketing goals. For example, if you’re positioning your product as eco-friendly and low-cost, then your packaging and delivery should reflect that branding.
Logistics management will depend on where you source all the materials you put into your final product, which includes your packaging and marketing collaterals. Your logistics should be centered on your objectives and not the other way around.
Focus On The Customer
Other than understanding your own business, you should also take care to understand your customer. Considering what kind of service and product will please the customer will help you create value for them and entice them to buy your products.
For example, if your target customers value communication over delivery time, then your logistics management should focus on providing timely updates on package deliveries over other issues.
By addressing their desire for clear communication, you add value to their experience with your business. Doing this will determine whether they’ll continue buying from your business or decide to switch to a competitor.
Improve Visibility and Collaboration
Regardless of how airtight or flawless your logistics may be, your operations will not be able to run properly with poor visibility and a lack of collaboration.
When handling logistics, the person in charge should be able to communicate clearly not only to customers but also to the suppliers. This will lead to improved understanding and collaboration between your business and your suppliers, which will help with managing inventory and minimizing your lead times.
Track The Cost Details
You should keep careful track of all the cost details in your logistics operations. If you’re unaware of just how much you’re spending, then you would not be able to control the costs when you need to do so.
From quotations, supply chains, transportation, and data management — you should keep a record of the costs for all of these aspects. Doing so will help you make informed decisions based on actual data.
Cost reduction is a crucial challenge when managing your business’ logistics. Knowing where most of your expenses come from will help you keep better control of your spending. In addition, it will also show you where you can reduce expenses or reallocate your funds for a more efficient operation.
Get Competitive Quotes
Knowing where your money is going is only one step to controlling your logistics. The second is finding the right providers for your logistics, which is where the quotations come in. Quotations will give you an accurate picture of how much you’ll be spending for a particular service, and will be used to evaluate your supplier options.
Make sure you’re getting competitive prices by contacting reputable service providers and comparing their quotes. Always try to have at least two or three quotes on hand at all times.
This helps you negotiate prices when necessary, and switch to alternative plans when one provider is unable to deliver as promised, or has raised their prices. With this practice, you can continue operations efficiently without having to cut corners.
Plan, Plan, and Plan
Constant planning is needed to ensure your logistics are running smoothly, as well as shipping products on time in good condition. Take some extra time to analyze everything going in and out of the business for the next month. Check with sales forecasts to understand new trends for products and possible promotions you can use for the coming weeks.
After taking note of all of these things, now is the time to properly plan. Make plans for what needs to be ordered based on your remaining inventory as well as forecasted demand for your products. On top of making these orders, create contingency plans for whatever materials you’ve ordered just in case they are delayed, damaged, or canceled. Take care not to stockpile — just have enough alternative sources you can rely on in a pinch.
Other than managing your inventory, you should also manage your shipping. Your shipping plans may already be ready for the next month, but it is also good to have at least one backup plan as there are many problems that can easily happen for delivery shipments.
Things like broken down cars, traffic, floods, and absent delivery drivers are all things that can put a wrench in your delivery plans. So, having a contingency plan to make sure your orders are delivered on at least the same day would be handy. It doesn’t even have to be fancy, you could do these deliveries yourself, or book a third-party courier for the day.
Modern technology allows us to access limitless information, which makes it great for small business owners to research ways to improve their operations. Thanks to new applications, it is possible for these owners to leverage technology even for their businesses. Using this, you would be able to lessen some of the burdens of managing your logistics.
With the internet, it is possible for both business owners and customers to keep tabs on ongoing product deliveries. Both will be able to track the package in real-time, as well as communicate with delivery drivers. By giving your customers access to this information, they are able to check the progress of the delivery themselves without needing to contact you for updates.
When managing logistics, it can create the right workflows from all points of your supply chain. When done right, everything can work together efficiently to deliver your products on time and in good condition, creating customer satisfaction.
For small business owners, these logistics management tips will help you build up and reinforce this crucial element of your operations. Following this advice will help you run your business effectively for you and your customers.