For us to truly understand the complexity of logistics, it would be necessary for us to have insights into what the day to day challenges are.
The biggest of all would be challenges related to speed and delivery times, as that directly impacts on revenue and turnaround times. These are not only imperative to meet customer satisfaction but is also one of the key components of business success.
Some top challenges related to speed and delivery times includes:
- Poor traffic predictions
- Poor weather predictions
- Lack of skilled drivers
- Poor cost planning especially relating to fuel and routes
If a logistics company is solely dependent on their own fleet there is more control over the above challenges but when it comes to logistics companies using the airlines, railways or shipping lines, it gets a bit more intricate.
Speed and delivery times however are not the only challenges that logistic faces. Below are a few more that would need careful consideration and planning if you want to drive your business forward.
Warehouse management errors
It doesn’t matter how hard you try to run your warehouses smoothly and without errors, there will always be a gap for errors to creep in. Whether it be a misplaced product, packing and shipping errors, incomplete orders or damages to products while storing them, these errors could have huge impact on revenue.
Delivery delays
Factory shutdowns, port capacity issues, labour strikes and protests and a number of other disruptive events can cause delivery of goods to be slowed down or even left at a standstill.
Transportation cost
Cutting transportation cost is one of the most challenging parts within logistics and realizing that variables such as fuel prices that are out of your control should not be the key focus when trying to lower these costs. There should be other considerations such as consolidating shipments or reducing the number of carriers.
Fragmented or poor communication
There are so many touch points within logistics which leaves potential for communication breakdown. This becomes even more complexed where there is a need for partners and customers to have access to software that includes real time communication or visibility on deliveries and orders. Customers want full transparency into where their delivery is at every point of transit. When a supplier and partner have different communication measures, it leads to an insufficient supply chain and wasted time.
Monitoring of driver’s location and health
Getting reliable and trustworthy drivers are one challenge but ensuring that they stay safe and healthy is another challenge on its own. Most companies make use of tracing devises and aps that they can monitor their drivers to ensure that they are on track and in good health to make their deliveries. Not being able to know where your driver is and whether the goods will be delivered on time has many negative impacts for a logistics company.
Reliance on third parties
Most logistics companies have strong relationships with at least one large supplier. Some companies however opt to deal with intermediaries that connect companies to transit companies. This creates a situation where a business does not have precise information about the cargo as the data flows through to the intermediary. This is a huge risk for a logistics company as not knowing at all times where and at what stage your product is in the logistics flow could be harmful to a business.
Government and environmental challenges
Not staying up to date with Government and Environmental changes and not taking pre-emptive measures to align the business with these changes could impact negatively on a logistics company.
Poor planning and risk management
To stay efficient and effective, periodic assessments and optimizations of each business sector is necessary and if that is not done there is no room for improvements to current processes to be made. Logistics need to be agile to changes in the market, product launches, global sourcing, credit availability and protection of intellectual property. If risks are not identified in time and planning to mitigate these risk not done, it could affect the business negatively.
With so many risks and challenges logistics faces on a daily basis, managing your documents, scanning, storing and retrieving them should not be one of your worries. Contact one of our friendly support team on bps@ubunye.com to see how we can assist you.
