Distribution logistics currently make up for almost a third of total expenditures in Mexican companies, depending on their business, so that is a fundamental pillar in the supply chain.
It is useless to increase the number of customers if they cannot fulfill all involved orders efficiently. It is therefore essential that focus special attention to the operation of your current distribution logistics, perhaps because there are certain mistakes that are hindering it.
We present you 7 signs that will show whether there are certain flaws in your distribution process.
1.- There is no organization
Lower ongoing costs of logistics does not necessarily require large amounts of investment, although, according to each particular situation, required investments could reach medium or high magnitude. Sometimes, rather what is needed is to improve the organization.
While certainly you could benefit with a good control and organization of stocks, warehouses and distribution centers, it is also necessary to implement the optimal mechanics of movement in plants, hubs, distribution centers, stores and customers. To do this, there are reputable companies whose business is to ensure that logistics costs are within international standards, so we recommend to outsource these operations.
2.- Ignoring relevant quantities
As often happens, the problem knowledge is closely related to its measurement. Analyze statistics related to the moves will favor the correct approach to the problem. In this context, it is essential to measure the following issues:
- How many products are in the distribution center.
- Number of raw materials.
- How much/ how many is delivered.
- How long it takes to do deliveries.
- How much does it take to sell.
- How much costs a delivery in an average basis. A single batch or mass delivery, are among the many things that can be considered.
Identify 20% of the things that cause 80% of the issues and / or costs and begin to resolve them.
3.- Unable to correctly estimate demand
It is essential to assess demand, both global and regional. Effective demand management is more than predict, it is to anticipate and take the opportunities to optimize the distribution process.
There is specialized software that helps predict with some certainty the likely behavior of demand, although this always involves a degree of uncertainty due to situations outside the country, the company, competition or politics. However, it is a useful tool to provide the vision closer to reality.
Do not forget to clarify if the demand is regular, for example, with stable and homogeneous quantitative and qualitative patterns; or, if irregular, where patterns are unstable or heterogeneous.
4.- Lack a design of the supply chain
It is extremely important to develop and have very clear the entire supply chain of your company, as well as each of the parts and members that constitute it.
When creating goals in the medium and long term, and define the necessary budget; the full knowledge of the supply chain is essential.
The supply chain involves all members present since the raw material flows from its origin until it reaches an end customer; through different steps as a finished sub-product, which in turn serves to form a more finished product.
So, identify, create and manage a supply chain is critical to the success of today's organizations. Is valid to say that the real war is not between products, but supply chains, and even reverse logistics.
5.- Not understanding the real needs of the distribution network
Your distribution logistics will suffer if daily production exceeds the capacity of distribution, if it is insufficient or if is not in accordance with the requirements.
It is necessary to identify the needs and choose solutions really focused on them. This concept is linked to the demand planning, but with emphasis on understanding, what is the real need that is required to meet the demand.
For instance, in very warm periods, maybe your refrigerated shipping routes should be provided as normal, or naturally chaotic days, so it is preferable to atomize shipments in very small units. The needs of your distribution network will always be influenced by customers and the environment.
6.- Lack to establish a strategic route with travel times
The path must specify the distances between each of the points, so it is recommended to develop a matrix and describe the points and sequence tour through the construction of a logistics network.
To appraise alternatives is necessary an analysis of the road, in order to know if the path currently being followed is the only possibility or there are other types of access for a new design of the distribution network.
It is well known the classic industrial engineering problem called "the problem of transportation” that allows to optimize times, movements and costs of a network of various senders and receivers of merchandise.
Besides standardizing processes, take advice from experts in industrial engineering and from specialized companies. Current tools propitiate to generate significant value and savings benefits, including options from specialized software to satellites used to monitor and improve the productivity of organizations.
7.- Lack of technology and support tools
Implement technological advances to optimize your supply chain links that are critical to your business. Currently it is essential that a product stream lead an intrinsic information flow which is derived into historical and perspective information. Without the tools for your company to record, envision, plan, execute and monitor processes, it is virtually impossible to compete.
Now that you know the signs that reveal flaws in your distribution process, you'll understand that innovation in logistics is of paramount importance to reduce losses and increase business competitiveness in both the domestic market and internationally.
In GIEICOM we specialize in the creation of intelligent logistics solutions fully focused on optimizing logistics processes, request free consultation here.
