In today’s customer-centric, digitized society, logistics companies are under constant pressure to meet customer expectations, such as ensuring on-time delivery and quality services.
There was a time when all transportation and logistics needed to do was move the product from point A to point B. Today, customers are increasingly demanding to get full visibility throughout the entire project lifecycle.
The evolving customer demands create challenges for logistics companies since they also need to evolve to meet the growing needs of the digital customer. This means embracing the latest technology, automating operations such as warehousing & supply chain, and hiring top talents.
In this article, we’ll discuss the three major bottlenecks the industry faces and explore possible solutions for logistics challenges in 2021. Let’s dive in!
1. High Transportation Costs
According to a recent Third-Party Logistics Study, reducing transportation costs is the single biggest challenge facing the industry. Transportation constitutes the biggest pie—nearly 30% of the total business expenses, hence the need to implement strategies that will cut costs.
However, reducing transportation costs is becoming increasingly difficult due to the rising fuel prices and, consequently service costs for moving goods from one place to another.
An efficient route planner app should help reduce transportation costs greatly. By identifying high-traffic routes, minimizing stops, and calculating the optimal route in a given situation (picture last-minute changes), these applications guarantee the fastest route that will save fuel and ensure on-time delivery.
2. Warehouse Management Problems
Stock errors can wreak havoc on a company’s reputation, and Walmart learned it the hard way. In 2013, the company lost a whopping $3 billion due to misplaced goods.
Target Corporation—a multibillion-dollar company with over 1,900 stores is another company that paid a huge price for poor warehouse management practices. In 2015, the company missed an opportunity to enter a lucrative market simply because barcodes in products didn’t match up with what was in the computer system—creating shortages as staff attempted to sort things out.
Adoption of warehouse management software that uses relevant technologies for data collection can potentially solve this problem.
Today, many corporations rely on barcode scanners but this tech leaves a lot to be desired when it comes to making smart inventory decisions. Industry-leading warehouse management systems like Oracle come with error-reduction tools that not only help to cut costs but also streamline warehousing tasks.
3. Lack of Effective Coordination
Another challenge facing logistics industries is the lack of effective coordination. Since there are many departments and parties involved—manufacturers, store managers, drivers, office staff, etc.—it becomes difficult to have centralized control over everyone.
In spite of that, your team needs to communicate constantly to ensure coordination and smoother movement of your goods.
However, this is not always the case and many companies have reported a lack of effective internal communication as one of the key obstacles affecting their operations.
Most of the coordination challenges can be solved with the use of appropriate collaboration and project management tools.
With collaboration tools like Asana, companies can easily track the work of employees and get the best possible results. You can create to-do lists for the ongoing projects, assign tasks to employees and even view the status of ongoing projects and get feedback.
Given the above challenges, can logistics companies meet the growing customer demands and still meet their revenue and profit goals? The answer is ‘Yes’ as long as they embrace the appropriate technology and prioritize customer satisfaction over other objectives.
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