The logistics sector has become a key performance indicator of the economy. Various estimates put the total market size of the logistics sector in a country on an average to be between USD 90-125 billion!
The Current Sketch of the Logistics Market Place
Logistics and transportation managers often find the movement of freight between trade partners an uphill battle! It is necessary to make the transit easier, cheaper, and more efficient. The freight managers turn to Transportation Management Systems (TMS) for a smooth operation. Over the last 3 decades, such systems have evolved significantly and are typically available as standalone software packages, as part of a larger Enterprise Resource Planning (ERP) solution, or in Software-as-a-Service (SaaS) formats.
Logistics cost is 9% of the GDP in the U.S. This shows an increasing demand on the logistics sector to provide solutions, which are required to support future growth.
Looking at TMS as “one of the fastest growing enterprise application markets” in its most recent TMS Global Market Research Study, ARC Advisory group says that a gigantic 63 percent of companies would witness at least a 5 percent increase ( that is, 23% stated a 10 percent or more increase) in total freight costs if they had to forsake their TMS and get back to more manual transportation planning and execution processes. According to ARC, a Logistics achieves large savings based on process enforcement, visibility, analytics, and optimization, “with virtually no other supply chain application offering so many different forms of optimization.”
Related Reading: Top Challenges Faced by Logistics Management Today
Top Areas to Focus on a Long Term Logistics Strategy
According to survey reports in the “Transportation Management Systems” Study by the Peerless Research group and Logistics Management, and some other Successful Logistics Businesses, the top areas that are important when looking forward to a long term logistics strategy are:
- Maintaining high levels of customer service (96%)
- Lowering costs (94%)
- Improving efficiencies and productivity in logistics operations (93%)
- Achieving the ability to target logistics initiatives that drive business growth (79%) Improving Asset Utilization (74%).
Other factors involved are as follows:
- understanding and controlling costs (55 percent),
- better shipment planning (55 percent), and
- greater in-transit visibility (52 percent).
- electronic communications with customers and carriers (45 percent),
- overall supply chain processes (45 percent), and
- carrier and partner collaboration (43 percent).
These key factors are important to carve out a long term solution for their business growth and to remain sustainable and cost-effective in their transportation expenses.
Maintaining High Levels of Customer Service Is Essential In Logistics Services
Logistics partner is the company that ensures the delivery of your products on time and cost-effectively. A single rupture can be fatal to your company. Hence it is important to monitor the quality of the product or direct service provided. Since for many online businesses, the final touchpoint with their customer is their logistics provider, customer service is the most essential factor in Logistics!
With the benefit of logging in whenever and wherever required to know the shipping details, a TMS allows analysis of various reports to know the delivery details of carriers. Based on this data, greater predictability can be ensured along with providing a hassle-free delivery of the product to your customer.
The same data can also be used to interact with carriers and other members in the supply chain. This helps in resolving issues if any and proactive improvement which leads to an increase in the customer service metrics.
Lowering Costs with A Properly Managed Logistics System
Poor logistics analysis, planning and decision making can result in excessive expenditures, missed delivery deadlines and damaged goods. This is why optimizing operational efficiency and reducing logistics costs are essential factors to remain financially viable. Here are a few factors that affect Logistics costs:
- Increase In Fuel costs.
- Delayed arrivals at ports, that leads to higher transportation fees.
- Complex regulations that govern international trade such as document processing, compliance checks, and so on.
- Frequent delivery delays and increased warehousing expenses.
The logistics business drives on quick service and fast turn-around times. Yet, there is a lot that goes on in the background before a shipment or a truck is in transit. The reality is that a lot of these processes are manual and eat up a lot of time, which adds to the overall TAT. It is evident that ongoing investments are made in automating processes and this gives one the choice to expand without increasing other additional overheads.
As mentioned earlier the logistics industry is witnessing a continuous growth. Although there are multiple challenges that exist in this industry, the growth of logistics is going to be a very key indicator of the performance of our economy.
Improving Productivity in Logistics Operations with a TMS
The first step to achieve a Logistics task is planning. With proper planning, we will be able to prepare for the unforeseen circumstances. These situations can be related to:
- The products
- Unavailability of the transportation
- Any internal issue in the organization
- Research and pick the correct goods.
This is where Automation has a vital role in business process optimization. When automation is deployed in the logistics process, timely updates regarding the movement of goods will be provided. The service operator and the customer will get details regarding:
- The goods that are dispatched from the supplier
- Procurement of the products at the warehouse
- Delivery of the goods at the destination
This saves a considerable amount of time because manual interference is eliminated. Moreover, accurate tracking helps in improving the overall process management. Similarly, the account details and employee details can also be managed.
Targeting Logistics strategies that Drive Business Growth
Trumping over your competitors is possible with proper logistics strategies. This is because logistics costs are related to improved efficiencies. With proper strategies, every logistics firm that is struggling to boost their operations can incorporate these strategies for a proper logistics network optimization.
Improving Asset Utilization and Warehouse Management with a TMS
Common warehouse logistics challenges revolve around every Logistics industry The concerns can extend into extending into inventory management, cost controls, human resources, risk management, and security, among other factors.
With a proper logistics system that is integrated with your ERP or Warehouse Management System, you can easily start to calculate asset utilization! To find prompt logistic solutions and technologically transform the right way, get in touch with Fingent now!
Related Reading: 5 Emerging Trends That Logistics Managers Cannot Afford to Ignore