logistics planning

11 Common Logistics Planning Mistakes

VWB Blog 2 years ago 20

Does your business deal with stock and inventory? If so, there’s going to be almost nothing more important to you than logistics planning.

Logistics is the process of managing, transporting, acquiring, and storing goods. If your warehouse is unorganized, it will be difficult for you to tell the difference between your fast-pickup items and bulk storage.

If you fail to plan out the transport route for your goods, you may end up spending too much. Using outdated technology and equipment is also a huge problem.

These are only a few logistics mistakes that you should avoid. Continue reading to learn more.

1. Carrying Too Much Stock

Storing your stock isn’t free. You have to pay to lease a warehouse and keep the lights on. You’ll also spend a significant amount of money on pallets and equipment.

If you hold too much stock, you’ll end up leasing a large warehouse when you could have made do with a small one.

The more stock you hold, the more time it’s going to take to move it. While these items sit in storage, they depreciate in value and eat away at your resources.

2. Carrying Too Little Stock

Carrying too little stock can cost you as much money as not having enough. You can’t make a profit if you don’t have enough goods on hand to meet demand.

When you run out of stock, customers will turn to your competition to get what they need. Once that happens, your clients may never return to you.

3. Bad Cost Forecasting

There’s more to logistics management than transporting your goods around. Your items will move through several channels before they make it to your warehouse.

What many people don’t realize is that different channels and hubs come at different prices.

If you don’t do proper route planning, you may spend way more on transport than necessary. Study the routes and make adjustments to keep more cash in your pocket.

4. Not Evaluating Your Logistics Needs

Businesses can’t go without the best transport management system software. The problem is figuring out what the word best means to you.

Before investing in software, you need to think not only about your current needs but your future ones as well. This will prevent you from running into any hangups.

5. Poor Organization

An organized warehouse is a happy warehouse. You’ve got to keep your fast-pickup items separate from your bulk storage.

If you keep everything in one spot, it will create too much clutter. It will be difficult for you to navigate your warehouse to find the merchandise you urgently need. Make sure that you have a designated place for all your merchandise.

6. Using Outdated Technology

Again, when it comes to logistics planning, technology is everything. You’ll need software to find products in your warehouse and keep track of where your goods are while they’re in transit.

Using the information that your computer system gives you, you’ll be able to keep your customers updated on their orders.

You can’t do any of this if your software is outdated. Be sure to stay informed on the latest technology trends in your industry.

7. Lack of Proper Equipment

Logistics and shipment rely on you having the proper equipment in your warehouse. If you don’t have forklifts and tarps, it will make it difficult for you to move your fragile boxes in the safest manner possible.

Not having equipment will also drag down warehouse production. Your employees will have to work harder to load your merchandise, which will cause shipment delays.

8. Not Making Your Return Policy Clear

Before buying from your website, your customers will search for your return policy. If they can’t find it, they’ll either take their business elsewhere or in some instances, buy anyway.

When they have to make a return, they’ll become understandably frustrated, which will cause issues for your company in the form of claims.

9. Using Manual Systems

For some companies, their logistics problems aren’t rooted in outdated technology. They’re rooted in not using technology at all.

Instead of automizing their inventory, they do everything by hand and rely on human memory. Using a manual system isn’t only outdated, but it’s also time-consuming.

Employees are only human. Chances are, they won’t be able to keep up with your ever-changing inventory without making a mistake or two.

10. Not Choosing the Right Freight Forwarder

Not all freight forwarders are built the same. You’ll need to do your research to find the right option for you.

Look for a provider that has some experience in your industry. They should offer solutions such as cargo insurance to help mitigate risk. Ask about their licenses and certifications as well.

11. Improper Product Packaging

Almost nothing will ruin your reputation quite like broken products. Customers will show their disappointment in the form of complaints and product returns. These returns can clog up your inventory.

The best way to combat this problem is to follow proper packaging procedures. Use strong boxes, and don’t forget to use plenty of packing peanuts and newspaper sheets to provide a cushion.

Common Logistics Planning Mistakes to Avoid

If your company ships out products of any kind, logistics planning is of the utmost importance. You’ll need to use the right technology and equipment to keep track of your inventory.

If you order too much (or too little) stock, you’ll waste money. You also have to keep your warehouse nice and tidy and don’t forget to evaluate your needs and choose a freight forwarder that can help you meet your goals.

For more tips that will help you keep your company going like a well-oiled machine, visit the Business section of our blog.

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