Logistics is the act of moving goods down the supply chain from the manufacturer to the customer. For many large manufactures, importers, or exporters logistical operations are a considerable expense. For this reason, companies should regularly evaluate the cost of logistical operations. cargo shipping companies
A company can choose to outsource their logistical needs completely or partially. If they outsource completely, they would hire a logistics company to move the goods through the entire supply chain (from manufacturer to retailer). Partially outsourcing means the company manages the transportation of the goods through the stages of the supply chain. Either way, minimizing total cost is the goal. This article introduces elements of logistical operations and software that can help manufacturers or logistical companies achieve this goal.
In general, there are many factors to consider in pricing a company’s total logistical costs: freight carriage, inventories, and warehouses. Changing at least one of these factors can lower total costs. For example, logistical studies performed by major manufactures showed they could lower total logistical cost by spending more on freight carriage costs, i.e. choose airline over truck transportation. This lowered total cost because they could get the goods from point A to point B so fast that the company could then decrease inventory and lower warehouse costs. The question is what combination of these three factors will lower your company’s costs.
There are two fundamental problems to consider. One is to find the right combination of freight carriage, inventories, and warehouse services needed, just like the above example. The other is to find the best prices for each of these services.
Logistics software provide analysis of many combinations of the before mentioned factors of cost. There are software solutions that provide the most basic comparison of freight rates and routing options. This kind of analysis would be most useful to smaller retailers selling directly to customers, via online stores, or for small to midsize business that distribute products directly from the manufacturer’s location to retail stores. Companies with multiple warehouses, multiple supply chain locations need software that can do more.
For businesses with more complex logistical operations, there are more comprehensive logistical software solutions. One of these is production-scheduling software. This type of software generates manufacturing plans for multiple supply chain locations. This software is idea for companies whose goods must go to many locations, for assembly, before the retailer.
For strictly logistical companies there are many software options. Some specialize in one type of freight carriage, for instance, there are software programs that seek and update highway traffic patterns and construction schedules. There are also software programs that hold and manage all operations at any given time. With this type of software, you can optimize distribution with features for best fit, weight distribution, vehicle loading, shortest path optimization, and cube optimization. For freight forwarders, software that allows you to smoothly forward freight to any type of carrier is available. When choosing a product make sure it provides for tracking freight across multiple carriers.