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Supply Chain: Rapid Logistics Ramp Up to Maximize Profits

By: Sum-Sum Chan
Posted: February 27, 2009, from the March 2009 issue of GCI Magazine.

How much thought is really given to supply chain planning? In truth, rarely is it seriously analyzed in business planning. In a well-planned supply chain, your logistics solutions support, enhance and allow your business to thrive. However, most businesses find their supply chains bleeding out profits and tying up valuable resources. This is not the fault of the supply chain, but rather due to lack of planning and knowledge from human direction. It is human nature to bandage problems for a rapid fix, like falling into the “truck for cheap” syndrome—making rapid transportation decisions based solely on price. Yet that approach to logistics needs is counterintuitive to the health of a supply chain. The supply chain is a complex entity of actions stretched out over time; it should be finessed, molded and strategically manipulated with much forethought. The good news? It is never too late to improve on decision-making.

What follows are a few key planning points applicable to the budding entrepreneur forging new frontiers or the seasoned veteran looking to tighten spending.

Evaluate Performance

Begin by creating a rating program for your company. Consider having internal reviews with staff if your existing process includes multiple individuals utilizing numerous carriers. A simple survey will best gauge the most problem-free relationships. Create a standard scorecard or matrix that is transferable throughout departments: customer service, sales reps, finance, etc. Then plan to rate on multiple levels: delivery costs, timeliness, customer service, ease of claims processing (it is inevitable) and overall shipment transaction.

If your business is newer, the scoring provides a basis for decision-making when choosing a full solution provider. As a long-time manufacturer, the rating will help carriers compete for your business.

Planned Packaging is Cost Savings

In the beauty industry, image marketing drives demand, and shelf aesthetics help close the sale. To protect these investments, you should also consider your packaging options from a supply chain perspective. What materials are the most durable for long hauls and long-term inventory; which have the strongest sealant for liquid containment; which are lightweight enough to minimize transportation costs?