We work with about 200 businesses worldwide each year, giving us insights into current priorities. Today, I’ll focus on the Big Six!
Watch the video below to discover more. In it, you’ll find detailed analysis and trends that highlight how these priorities are shaping the business landscape.
Don’t miss out on these valuable insights!
Companies aim to balance high service with low cost by improving inventory health, managing warehousing location and capacity, and optimizing transport rates and fleet use.
This year, 17% of our projects involve warehousing issues like space and cost.
Outsourcing and freight are also challenging due to complexity and high costs. Managing inventory profitability and fleet optimization are key focus areas.
These six priorities—warehousing, outsourcing, freight, inventory, profitability, and fleet optimization—are what we’ll explore today.
1. Warehousing
Capacity issues are prevalent as businesses experience increased inventory levels. Many struggle with cramped warehouse spaces and rising costs. Instead of immediately moving or outsourcing, consider optimizing your current warehouse. For instance, adjusting aisle widths and using articulated forklifts can enhance storage capacity by as much as 30%. Additionally, reevaluate inventory placement through slotting to improve efficiency. Removing obsolete stock and analyzing slow-moving inventory can also help free up valuable space. Sometimes, adding mezzanines or reorganizing racking can extend the lifespan of your current warehouse without the need for costly expansion. By making these adjustments, you can optimize space and improve overall warehouse productivity.
2. Outsourcing
Outsourcing often arises from capacity constraints or dissatisfaction with current providers. With fewer quality warehousing and freight partners available, it’s crucial to start the process early and make your business attractive to potential partners. Ensure your operations are streamlined and reduce specific demands that may deter providers. A thorough market test can help gauge interest before fully committing. For freight, be cautious about cherry-picking rates, which can lead to unsustainable pricing. Instead, seek comprehensive solutions that balance cost and service. Effective management of the outsourcing process can help secure better deals and more reliable partners.
3. Freight
To manage freight costs effectively, ensure that shipments are easy to handle. This includes proper palletizing and ensuring goods can be double-stacked if necessary. Avoid cherry-picking rates from different carriers, as this can lead to higher costs or inconsistent service. Assess your current rates critically to ensure they are competitive and align with your actual freight needs. Simplify and standardize your freight processes to make them more manageable and cost-effective. Clear communication with carriers and understanding rate structures can also help optimize your freight expenditures.
4. Inventory
Effective inventory management is crucial to avoid space issues and high costs. Focus on accurate forecasting and reducing slow-moving or obsolete stock. Implement advanced inventory analysis techniques, like ABC classification, to ensure you’re holding the right amount of stock in the right locations. Industries with complex inventory needs, such as mining, require specialized strategies to balance high-value spares with operational demand. Regularly review and adjust your inventory practices to maintain efficiency and accuracy. By improving inventory accuracy, you can enhance your overall supply chain performance.
5. Customer & Product Profitability
Understanding the profitability of each customer and product is essential. Often, small orders or customers can significantly impact profitability. Increase order sizes and use incentives to improve profitability. Regularly review and adjust your pricing strategies based on customer and product profitability. Be aware that large customers may also be unprofitable, so analyze and address these issues proactively. Identifying and focusing on highly profitable segments can lead to better financial outcomes and more strategic decision-making.
6. Fleet Optimization
Optimize your fleet by evaluating its size and mix to ensure it meets your needs efficiently. Use routing systems to plan delivery routes effectively, enhancing overall fleet performance. Flexible delivery time windows can improve scheduling and reduce costs. Aim for high utilization and efficient fleet management to maximize operational efficiency. Regularly assess and adjust your fleet strategy to adapt to changing business needs and market conditions. Enhanced fleet management can lead to significant cost savings and improved service levels.
Don’t miss any important details by watching the video above.
For help with the Big 6 in your organisation, jump over to Logistics Consulting.
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated November 29, 2023, under the title “The Big Six in Logistics in 2023“.
