How Small Businesses Can Save on Logistics and Shipping Costs

1. Identify the objective 

^{Before set up your plan in marketplace, make sure you understand your company's overall stratergy. If the corporate strategy is to offer the fastest delivery times in the industry, then in order to support that, you need to send more on logistics. If the strategy is to be the low-cost provider, you will need to finds ways to cut costs, even at the expense of lead time. Then, communicate to top management the reasons for you logistics strategy.}

2. Focus on services customers want

^{Even if the company is focused on cost controls, you still need to service the customer. Within the bounds of the strategy, find innovative ways to ensure customer satisfaction. According to research firm Supply Chain Insights, only 2% of survey respondents considered their ability to respond to customers to be excellent, while 46% said their ability was good. Your customers may value communication about status changes on shipments more than faster delivery, and you will save money by providing the value service.}

3. Spend on visibility and collaboration

Regardless of your strategy, you can't run an effective supply chain without visibility and the ability to communicate to customers and suppliers quickly. Collaboration will help you keep inventory low while keeping lead times at a minimum. Consider your supply chain and warehouse management systerms part of your core equipment, as important as your forklifts and automated storage and retrieval system.

4. Keep track of cost detail

Know how much you spend on each aspect of your logistics and supply chain. You can't control costs if you don’t know where you’re spending.

5. Get competitive quotes

^{It seems like purchasing 101, but many supply chain leaders are so time pressed that they don’t bother negotiating or getting quotes from multiple carriers. Nothing causes a company to sharpen its quote faster than knowing there is competition for the business. Always get at least two or three quotes for any expenditure.} 

6. Plan

^{Take the time to analyze the shipping plan for the month, and plan ahead for full truckload shipping wherever possible. If you have material deliveries, put some contingency plans in place just in case there are delays or diversions. That doesn’t mean stockpile inventory, but you should have plans that include alternative sources and the ability to shift goods from one distribution center to another.} 

7. Improve Sales and Operations

^{Effective sales and operations (S&OP) planning can help you understand when you might need new equipment or overtime. Accurate forecasts help you plan inventory, so you have enough of the right products in place to meet demand. The S&OP process can provide insight into upcoming promotions, new product introductions or other demand changes. Armed with this information, you can ensure you have enough (but not too much) inventory on hand.} 

8. Work with a speacialist expert logistics/ freight forwarder company

^{Many small and midsized businesses believe that working with a third-party logistics company (or 3PL) is too expensive for them, but that may not be the case. A good 3PL can help ensure that you get the best rates, the fastest deliveries and the most productive warehouse team. It will have many of the necessary visibility and collaboration tools available to help you.}

^{What’s more, it may even help with developing your strategy and with tips for better forecasting and S&OP planning. A 2017 3PL study shows that 73 percent of shippers and 90 percent of 3PL providers believe that 3PLs offer new and innovative ideas that improve logistics. Many 3PLs are willing to add extra services to bring in new business, so ask for the extras you want when seeking a 3PL partner.}

^{By considering the eight guidelines above, your business will be that much more organized and efficient for both you and your customers.}