5 Cost-Effective Ways to Improve Productivity for Your Logistics Company

Companies that specialize in delivering goods to vendors and consumers have a unique set of challenges they need to face, particularly when it comes to minimizing financial waste and increasing productivity in order to establish a cost-effective logistics operation in the increasingly competitive industry. Needless to say, achieving this goal will require you to invest in various complementary processes within your company and warehouse in order to boost productivity enough to improve your bottom line.

However, increased productivity doesn’t just benefit your company or the customer, it benefits every actor and relevant party in the supply chain, hence the need to improve productivity as much as possible so that you can retain positive relations with suppliers, manufacturers, and of course, the customers. Here are the five cost-effective ways you can use to raise productivity in your logistics business.

Start with meticulous employee training

Your employees represent the driving force behind your company’s long-term success, so there is a real need to invest heavily in continuous employee training, especially employee onboarding. This will ensure that new team members are up-to-speed with all of the crucial and menial processes in your company, and that they understand their role in the business hierarchy. In turn, this will create a stable foundation of warehouse and transport efficiency.

However, it’s not just about training and educating the new employees for maximum productivity, it’s also about continuously investing in the training of your seasoned staff members to allow them to grow their expertise and careers. This will not only help them become more efficient and effective at their jobs, but also build brand loyalty and help you keep the best-performing team members at your side.

Establish Standard Operating Procedures

A logistics business needs to operate like a well-oiled machine. While it is true that every industry and niche should have room for creativity and improvisation, logistics is a sector that thrives the most on established procedures that have proven to yield the desired results. This doesn’t mean that you shouldn’t innovate or introduce more efficient solutions, but it does mean that you should establish effective SOPs your employees can follow at all times.

Leave nothing to chance, and instead focus on creating an SOP by:

• Defining a process and its subprocesses.
• Mapping out the process from start to finish. 
• Establishing communication rules for the process.
• Making it concise and to the point, with easy-to-understand language.
• Work out the necessary steps and the key actors in each one.
• Communicate the SOP to your employees and make sure every aspect is understood and adopted.

Automate the transportation process as much as possible

Automation is one of the key supporting pillars of a productive logistics operation, as the technological revolution is rapidly transforming every industry in the world, logistics included. Without automation, managers are required to handle every process in the company manually, which takes time and effort, and invariably leaves room for costly human errors.

This is why logistics companies across the globe have been quick to adopt a cloud-based transport management system into their operation in order to automate everything from rate card calculations, delivery times and routes, faster allocation of various resources, accounting, proof of deliveries, all the way to inventory management in real time. If you’re still handling all of your processes manually, you’re falling behind and losing out on lucrative business opportunities down the road, so make sure to implement cloud-based solutions if you want to establish a competitive advantage and raise productivity across the board.

Establish clear communication standards

Clear, seamless, and effective communication is essential for building a cost-effective and productive logistics operation. Simply put, you and your team members need to be able to communicate efficiently and effectively in order to maintain productivity on a daily basis, resolve emergencies as they arise, and improve your bottom line.

What’s more, effective communication is also important for maintaining your relationships with your industry partners, and ensuring a well-functioning supply chain. Communicating with all partners in your supply chain in an effective way will further solidify your position in the industry and prevent the supply chain from breaking. 

Monitor KPIs and adapt over time

And finally, long-term productivity depends on your ability to monitor supply chain metrics that are relevant to your business, create actionable reports from these insights, and actually invest time and effort into adapting your approach. After all, if you don’t change with the trends and key metrics, you will inevitably fall behind your competitors.

Some of the most important KPIs include:

• Cash-to-cash time cycle.
• Freight bill accuracy.
• Perfect order rate.
• Days sales outstanding (DSO).
• Inventory turnover.
• Gross Margin Return on Investment (GMROI).
• On-time shipping.

Tracking these key performance indicators to gain deep insights about your productivity and your brand’s performance in the industry will prove invaluable in shaping your entire growth strategy. 

In closing

Logistics businesses are faced with the threat of increased competitiveness and higher customer demands, which is why companies looking to stay ahead need to improve their productivity on all fronts. Use these solutions to elevate your company’s performance and future-proof your logistics business for years to come.