If you are running an eCommerce business, it is beyond doubt that you want to reduce your logistics costs. But here, doubt arises about how to reduce costs without compromising the services and customer satisfaction.
The majority might be mitigated with the words logistics planning, the right 3PL, and informed decision-making. Before you get into the cost-cutting frame of mind, you must focus on whether there is a need to make cuts to make the greatest return. Here, this article will introduce the top ten strategies to improve customer satisfaction, reduce the cost of supply chain operations, and increase operational efficiency.
Make Better Use of Warehouse Space
Warehouses are one of the most expensive segments for a company to maintain. The price of land, machinery, labour, building, and materials stored/kept in the warehouse could amount to a considerable chunk of money for a company. Most organisations maximise warehouse and supply chain operations by reducing storage time, streamlining placement, automation, or reducing labour costs while improving accuracy. They also reduce their costs by utilising the space as much as possible, ensuring to store many items as possible in the optimum space.
Having a huge warehouse is not a sustainable practice. A large warehouse means the working resources may not use the space efficiently. It might cause unnecessarily long travel between two places which ultimately causes more fuel consumption, extra labour costs, and delay in unloading and loading the goods. On the other hand, a smaller warehouse can improve overall efficiency.
Automation of Logistics & Warehousing
Automating logistics and warehouses with technologies like automated shipping, automated retrieval, and storage systems, as well as eCommerce warehousing robotics, can assist your logistic team and warehouse members in achieving significant outcomes with less effort, time, and resources. Integration between the company and warehouse digital sales channels, such as e-commerce platforms, email, website, etc., can make order processing faster.
Outsource to a 3PL
Third-Party logistics companies provide logistic support and services in some or all aspects of a business, including shipping operations and managing operations such as moving products from producer and distributor to the final user. A 3PL is generally used in supply chain management operations and outsourced logistics to fulfil the services such as transportation, customs brokerage, freight audit, materials procurement, warehousing, inventory management, shipment tracking, and payment. A 3PL provider could scale the company’s space, transportation, and labour depending on the service’s requirements. Producers and suppliers can grow in the new territories ineffectively and uniquely with less hassle.
Improve Customer Satisfaction
The profitability of an organisation somehow depends on customer satisfaction, and it can make or break an organisation. The success or growth of a company, especially the ones following the B2B model, hinges on customer satisfaction in this digital era. These days, customers have easy access to dig more about a company through feedback, reviews, and customer ratings. The reputation of an organisation can easily be ruined by poor customer service. Still, if the customer service is great, the referrals and reviews greatly benefit it without spending much on marketing.
Centralise Procurement
Centralised procurement means bringing all things to one location, which means bringing personnel, procurement procedure, and materials to one place. Central procurement has numerous benefits, such as minimising duplication, increasing efficiency, building better business relations, reducing labour costs, and saving time.
Consolidate Shipment
Freight consolidation or consolidated shipment is a system in which various small shipments required to be sent to the same destination are consolidated or bundled on a single vehicle and then shipped to the destination together. It is considered one of the most crucial parts of supply chain operations. In this scenario, the shipper can pay the bulk rates when the shipment takes place simultaneously rather than dispatching multiple smaller shipments individually.
Streamline Secure Packaging
Secure packaging can provide numerous benefits to your company. You should transport the product safely and safeguard it from any damage. This establishes your brand reputation among customers. As the reputation of your brand increases, your overall profit also boosts. Secure packaging will incline your customers towards your business, stay loyal to your brand, and refer your services to others.
Labour Costs
You can reduce the labour cost for short or long-term goals. Automating the process of monitoring employee attendance can be one way. Implementing the software application to analyse data to determine the hourly efficiency of your human resource. It can help you assess your employees’ efficiency and discipline and assist you in plugging leakages and wastages.
Improve Visibility
Logistic visibility allows organisations to track the order or the item, regardless of situation or location. From the operational point of view, the improvement in visibility also accelerates inventory management.
Streamline Ordering Process
Streamlining the order process is one of the most crucial elements in reducing supply chain costs. It reduces operating costs, improves the efficiency of the process, increases the quality of post-sales service, and gains profits from post-sales service operations.
Conclusion
Cost reduction is critical for any organisation, but compromising the quality to reduce cost is not a good idea. In the above article, we have read about the 10 proven ways to reduce your supply chain costs without reducing service quality. From shipping techniques to logistics suppliers, having an eCommerce fulfillment warehouse and goods transport service can reduce supply chain management costs.
AAJ Supply Chain Management provides services like e-commerce fulfilment, warehousing, supply chain operations, transportation, return management, and many more. With a strong team of 500+ professionals, we provide our clients with the most satisfactory services in the industry.
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