With the fourth quarter in full swing, it’s a great time to kick off planning for 2018 and, as part of that effort, find new ways to eke the most out your logistics budget. Whether that means locking in freight rates, doing lane analysis, or evaluating technologies and tools that will help your firm’s transportation network operate more efficiently, the steps you take now could have a significant impact on your firm’s profitability in 2018.
Here are five tips you can start using right now:
- Look for and proactively address supply chain bottlenecks. Find the links that are creating the highest number of delays and other challenges, and then address them proactively. That could mean taking a closer look at freight scheduling, customer demand cycles, or compliance issues that could be holding your shipments up and causing those bottlenecks.
- Focus on inventory reduction. Excess inventory accumulated at port, in distribution centers, or in the manufacturing plant can all negatively impact a company’s logistics budget. Avoid this trap and improve visibility with good demand-sensing software and forecasting technology. “When a company begins practicing inbound logistics or demand-driven logistics, transportation costs are reduced but the savings of replacing inventory with information, and providing better customer service to your customers, is even more important,” according to Inbound Logistics’ Keith Biondo.
- Plan thoroughly for the possibility of higher shipping costs. Avoid taking shortcuts and instead strive for a holistic view of your transportation network and supply chain. Should rates increase, for example, you can use “what if” scenarios to develop ways to address these adjustments, and to ensure that your budget is ample enough to cover these spikes.
- Keep tabs on performance throughout the year. Logistics budgeting is not a “set it and forget it” exercise. Throughout the year, be sure to factor the dynamic nature and seasonality of the freight environment into your logistics and transportation decisions. Use year-over-year comparisons, stay on top of trends (i.e., freight rate fluctuations), and forecasting to monitor current performance and make good future decisions.
- Partner with a trusted provider. A company like Odyssey Logistics has the experience and expertise needed to help you identify any looming transportation challenges and to make good financial decisions for the year ahead. By aligning with a trusted organization that helps you lock in rates, gain visibility, and conduct lane analysis, you’ll be able to get the most out of your logistics budget.