I reviewed the major logistics trends of 2023, zeroing in on the top six. These trends reflect the areas where our support is most in demand.
With approximately 200 logistics consulting projects each year, this gives us a clear view of the prevailing challenges in the industry.
Watch the video below to know more!
In today’s dynamic business environment, companies face several pressing challenges that impact their operational efficiency and cost management. Addressing these issues effectively can lead to significant improvements in performance and profitability. Key areas of concern include warehousing, outsourcing, freight management, inventory balance, customer and product profitability, and fleet optimization.
1. Warehousing
Businesses are grappling with warehousing capacity issues due to increased inventory and rising costs. Many seek larger facilities or outsourcing options. A practical solution is to reorganize existing warehouses for efficiency, such as adjusting aisle widths and implementing better slotting strategies. Improvements in warehouse design and layout can significantly enhance capacity and operational efficiency.
2. Outsourcing
Outsourcing and changing providers is common due to dissatisfaction or capacity issues. Finding suitable partners has become challenging because of industry consolidation and resource shortages. To ensure a smooth outsourcing process, businesses should present themselves as attractive clients and allow sufficient time for the transition. Testing the market and maintaining flexibility in contract negotiations can aid in finding the right partners.
3. Freight
Optimizing freight involves presenting goods in a way that is easy to handle and avoiding cherry-picking rates. Efficient freight management includes understanding rate structures and ensuring your freight profile aligns with cost-effective solutions. Companies should also seek to make their freight operations more manageable to reduce costs and improve service.
4. Inventory
Balancing inventory across the network is crucial, especially for industries with complex needs like mining. Accurate forecasting, reducing SLOB (slow-moving and obsolete) stock, and improving inventory accuracy are essential for effective inventory management. Analyzing inventory by SKU and order line can further refine stock levels and profitability.
5. Customer & Product Profitability
Understanding customer and product profitability, or cost to serve, is vital. Companies often face challenges with small orders or large customers that may be unprofitable. Analyzing profitability at an order level helps in adjusting strategies to enhance overall margins and profitability. Addressing these issues can uncover hidden problems and opportunities for improvement.
6. Fleet Optimization
Fleet optimization focuses on balancing fleet size and mix for better utilization. Efficient fleet management includes route planning and maximizing vehicle usage. Improving delivery efficiency through better time windows and routing systems can significantly enhance operational performance and reduce costs.
For help with the Big 6 in your organisation, jump over to Logistics Consulting.
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated November 29, 2023, under the title “The Big Six in Logistics in 2023“.