All product-based and some service-based industries rely on a logistics system to some degree. This is most obvious when you think about manufacturing a product, as you need to source the materials, store the intermediate goods, and then ship the products to different customers. The more steps you have in this system, the more complicated it becomes.
Here are a few ways to improve how your company transports and stores products and materials.
Local Sourcing
If you want a simpler transportation system, you should think about the distances that your materials and products have to travel. Longer distances incur more costs and potential delays, which all adds on to the rest of your production chain.
While it’s not always possible, it’s generally best to find local suppliers and sources for your materials and intermediate products.
The cheapest option might end up being much more expensive than you think if there’s a large distance to travel, so make sure you factor in those costs. As always, speak to different vendors and try to get a good deal. Even a small percentage can be a significant saving.
Intelligent Routing
If there’s any kind of distance between vendors, factories, and warehouses, you need to consider the routes. Each route should work in tandem so that there aren’t any delays or potential bottlenecks.
While a set route might seem easier, it’s not the most optimal or efficient way to transport goods. Instead, consider dynamic routing. In short, dynamic routing means that your route changes according to the conditions on the road.
By using real-time data, your drivers can use routes that are more efficient and avoid potential issues like getting stuck in traffic after a major accident.
Warehouses and Storage
As well as transporting goods, logistics involves storing products and intermediate goods.
A warehouse should be located in a relatively convenient location that’s close to the factories or distribution centers. This means that you can shorten the transportation times as much as possible.
By using AI tools to manage your warehouse, you can keep track of the products you have stored and what you might be running short of. This allows you to keep a relatively flexible and low-stock inventory, rather than stockpiling everything.
Stockpiling might feel safer, but it’s a much more expensive option than trying to keep up supply. A large stockpile is expensive and risky to store and, if something goes wrong in the warehouse, you potentially lose a lot of product.
Information is Power
One thing that has run through this post is the importance of information and data. The more you know, the faster you can make better decisions. Modern companies need to be fast on their feet so that they can react to different situations, and better data allows your business to move even more quickly.
Make sure that you’re always gathering data and that you know how to use it, either by using AI tools or trained employees to read the data.