The following is an excerpt from our white paper The Design of Logistics: Eliminating Costs to Strengthen Your Competitive Position.

As the owner or manager of a business with significant logistics operations, you’re always looking for ways to control costs and enhance productivity. While this is no easy task steps can be taken to simplify operations for your employees and your business as a whole. Here are four things to consider as you analyze your logistics process.

4 Components in Controlling Cost and Enhancing Productivity

1. Concentrate on reducing variability.The more uncertainty in your transit times, the more difficult it is to manage your supply chain and keep costs low. The receiving party will respond to variable transit times by stocking buffers of inventory or increasing the frequency and quantity of orders to compensate. It’s a mistake to think that you can justify higher freight costs in order to leverage variability, so focus on taking it out of the equation.
2. Consolidate your supply chain.Look at the components of your supply chain to identify those suppliers or distributors that are close in proximity, and combine the shipment to streamline transit. Also, identify LTL shipments and reach out to other shippers who might be willing to partner for a FTL shipment.
3. Reduce warehousing inventories.Many companies believe they need to stock excess inventory at ports, manufacturers and warehouses because of supply chain bottlenecks. You can keep inventory levels and storage costs low by acquiring reliable details and preparing for future orders.
4. Take control over your procurement process.Establish a road map for your supply chain that tracks shipments, including order acceptance, generating documents, and creating shipments. Automating the process and extending these privileges to trading partners can reduce shipping costs while maintaining efficiency.