17-06-2021
Supply security of material and goods to production facilities and customers can be a drain on resources for production and trading companies alike. If processes are not working, however, it may be nothing short of fatal to a company. On the other hand, well-oiled logistics may aid in securing stable operations, growth options and good customer relations.
At H. Daugaard, we have identified three focal points which all companies should address intermittently to ensure optimal and efficient logistics:
- Logistics strategy
- Transparency and flexibility
- Number of business partners involved
With a strong foundation in all three areas, you can rest assured that your company has an optimised and streamlined logistics solution.
How often a company should scrutinise its logistics solution naturally depends on the proportion of daily operations affected by logistics. Another factor to consider is the proportionate cost of logistics for the goods or services offered by your company. A good rule of thumb is to conduct a thorough review every two to five years.
An overall strategic plan for logistics
Start by specifying demands on and requirements to your company’s solution. A good dialogue with logistics providers on options to support your business is so much easier if your strategy is concrete and precise. Typically, price and quality go hand in hand in the market. For this reason alone, it is advisable to have a clear picture of how logistics affects your business. Is speed more important than price? Is delivery safety more important than speed? Is service delivered with a smile more important than flexibility?
Examples of important strategy considerations:
- Is day to day delivery expected?
- Minimum order requirement?
- Flexibility expected by the logistics provider?
- Demands to delivery safety?
- Any seasonal fluctuations?
- Special demands to handling or storage of goods?
- If logistics affects your overall branding – e.g. as part of a sustainable transition?
You and you alone know your business and customers to the core. It is important to take responsibility for the specification and demands to the logistics solutions. On the other hand, you may miss new possibilities. At H. Daugaard, we work as your sparring partner and tailor a logistics solution, which fits your company, products and market hand in glove.
Regardless if you choose to work with H. Daugaard or another provider, your strategy ensures that you and your logistics partner work towards the same goals. How well your logistics provider understands your company determines the level of service in a tailored solution.
Transparency and flexibility
When you decide to work with a professional logistics partner, you will have access to necessary expertise and advice, enabling you to construct the most efficient logistics set-up.
Every production or trading company has its limitations concerning volume and fluctuations, just as the most recent years have shown us that transports from e.g. the Far East have been under pressure. It may be advisable to secure larger volumes of raw material and products at certain times, ensuring that your company avoids the same delivery fluctuations as the world market. Increased warehouse capacity may not only ensure your company’s delivery safety but may also bring with it economies of scale, which are not always possible with a “just in time” strategy.
It may be strategically important to have raw material delivered to warehouse facilities close to production and finished goods to customers on neighbouring markets – especially if delivery windows required by your customers are very short. If logistics are complicated and lacking transparency, it may be difficult to identify which parts of the supply chain holds unnecessary risk or overlooked improvement potential. Ultimately, this may result in profit and productivity losses as well as dissatisfied customers looking for alternative suppliers in the market.
Involve your logistics partner in your processes so that they continuously ensure optimisation and maintain an overview over possibilities of economies of scale, minimisation of risk and streamlining of administration, workflow and delivery speed without affecting supply safety.
Number of logistics business partners involved
You and your company are in the best position when you have logistics transparency – for warehouse solution and distribution alike. In our experience, too many customers accept solutions which as more or less obscure and divide responsibility between many parties. On paper, this may look like the cheapest solution, but experience shows that they often end up being costly, heavy on administrative resources and a source of errors.
If you wish to work with many different partners on your company’s logistics solution, as a minimum you should ensure that the entire process to be initiated for delivery of goods is clearly described – regardless if the process involves raw materials and semi-manufactures for your production facilities or if the commodity is goods delivered to customers.
An error in one link of the chain fails the chain
– Which may be difficult to rectify quickly or to pinpoint a guilty party among several operators.
At H. Daugaard we can receive orders directly into our digital booking system, which provides our customers with transparency and traceability throughout the entire process. We also offer a regular contact person to ensure a high level of information and service. In addition to minimising errors to a bare minimum, the entire process is streamlined, enabling us to deliver more quickly and of a higher quality than what is seen in logistics solutions involving multiple operators.
You can read more about logistics here: Warehouse and logistics: How to prevent logistics from impeding growth
At H. Daugaard we are always ready to analyse your current logistics solution and provide you with advice and options for optimisation and streamlining.
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