It seems like every other vehicle on the road is connected to Amazon these days. Not only the massive 18-wheelers pulling the iconic Amazon arrow, but the humble Toyota Camry with a blue-vested courier.
While this mega-corporation has built its empire on mastering logistics, logistical concerns are not just for the big boys. In fact, poor logistics are likely to be felt most acutely by smaller businesses. Due to more limited budgets, a delayed shipment or stockout may eat into profits more substantially than it would for its larger peers. As such, smaller firms may be able to reduce logistical expenses by up to 20% via effective optimization.
With this in mind, keep reading as we explore the various ways that logistics can make or break your business, offering simple solutions for how to solve common logistical challenges.
What Are Logistics?
Logistics is product delivery, right?
Yes, but there is more to the story.
Business logistics involves the entire process of moving goods. This includes from the supplier to the business and from the business to the customer. Common logistical processes include:
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Shipping – the movement of components through the supply chain to the business and finished products from the business to the customer. Includes ocean, air, and overroad transportation.
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Inventory – involves the receiving and storage of products. Ensures that the right products are available in the right quantities at the right time to avoid stockouts and delays. Sometimes referred to as warehousing.
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Fulfilment – guarantees that customer orders are correctly processed, packaged, and delivered to maintain customer satisfaction and operational efficiency.
Common Logistical Challenges for Small Businesses
Due to the various moving parts within its infrastructure, it is unsurprising that there are numerous threats to logistical efficiency.
Delays are the most immediate and visible threat. Stalled transportation. Inventory stockouts. Lost packages. The list goes on. Any of these delays not only erode customer satisfaction, but they pose significant disruption to operations.
Increased costs are another byproduct of poor logistics. Rushed deliveries. Refunds to dissatisfied customers. Overtime to employees to make up for lost time. All result in higher costs that can undermine a business’ profitability.
Communication breakdowns are also problematic. Slow (no) updates from vendors. Poor tracking visibility. Unclear inventory levels. Each can cause the logistical infrastructure of the business to sputter.
How Do Logistics Impact Small Business Success?
If it’s not clear already, good logistics are one of the key components of small business success. Some of the top ways that good logistics impact business performance include:
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Support timely delivery and customer satisfaction, driving positive reviews and repeat business
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Reduced operational costs and streamlined inventory management
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Promote smooth business growth and agility in competitive (and evolving) markets
Actionable Strategies for Improving Business Logistics
Small business logistics can be negotiated with some straightforward strategies. Let’s take a look.
Choose Reliable Shipping Partners
Partnering with the right shipping companies is fundamental to logistical success. It can help ensure consistent delivery times. It minimizes the risk of lost packages. This drives customer satisfaction.
Consider companies that are experienced in transload logistics. This is the process by which goods are moved from one mode of transportation (e.g. ship) to another (e.g. overroad truck). These companies help reduce downtime at ports. They also offer more responsive support, performing the heavy lifting of key transloading challenges to allow your business team to focus on its core competencies.
Use Tracking Systems
In the age of e-commerce, a business is only as good as its tracking technology. Customers are no longer satisfied with “it was shipped last Tuesday” in response to their queries regarding order location. Leveraging the latest tracking technology provides business owners real-time visibility into the location of shipments, giving them–and the customer–a play-by-play breakdown of the shipment’s journey.
Tracking systems offer more than delivery visibility. They can improve inventory forecasting, reducing the risk of costly stockouts. They also give business owners insights into possible supply chain delays, allowing them to make contingency plans in a timely fashion.
Plan for Volume Spikes
It’s that time of year.
If you haven’t gotten one in your personal mailbox already, expect a little card from the USPS advising you when to ship packages to arrive in time for the holidays.
As a small business owner, you would do well to use this as a cue. Sales are likely to spike during the holiday season. This will be true for other businesses as well. This can put added strain on supply chains and delivery infrastructures–not to mention your own staff.
Therefore, identify key times of the year when you expect sales to increase for your company. Have additional packing supplies on hand. Be ready to call in extra employees as necessary. Make sure your drivers and/or 3PL providers are able to accommodate increased demand.
Prioritize Top-Notch Logistics for Sustained Business Success
There is more to logistics than moving products from point A to point B. It is a holistic process that encompasses all aspects of transportation, inventory, and fulfillment. By getting these key logistical requirements right, small businesses put themselves in the best position to satisfy customers and accommodate growth in changing markets. For more of the latest trends in entrepreneurship and small business, explore the content at Enterprise Podcast Network for additional thought leadership!
Author Bio:
Sam Willis is a freelance writer that loves sharing his knowledge and expertise in engineering, construction, and business. He lives in Atlanta, Georgia where he enjoys spending time with his wife and family in his free time. Sam’s work as a freelance writer can be found on Building Product Advisor, a construction industry resource site.
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