Article By Walter Scremin, CEO of Ontime Delivery Solutions
There are some common logistics mistakes which cause headaches for many Australian manufacturers, with potential to hamper company reputation and business growth.
These errors include obvious howlers, such as late or missed delivery of expensive items, or damaged items. Yet often these mistakes are relatively small, systemic issues that become bigger problems over time.
The good news is these mistake are avoidable. By clamping down on these small errors Australian manufacturers can protect their margins and enhance their customer relationships and reputation.
What are some of the most common logistics mistakes made by Australian manufacturers?
Packaging problems: The right parcel or packaging and load planning is a basic ingredient of successful transport logistics. Yet mistakes are still made in packaging, leading to higher incidents of damage, rejected deliveries, and insurance claims, which increase your costs and lower your reputation among clients.
The wrong driver or vehicle for the wrong job: It’s easy to think all delivery is the same. But manufacturers can make a big mistake if they try and apply regular delivery practices to specialist items.
This might include items which are large, awkwardly shaped, or heavy. And it may even include items which also need some assistance with set-up or placement. Having a driver try to deliver specialist equipment, without the knowledge required, and without the appropriate vehicle, can be a costly mistake.
Lack of real-time transparency: Whether you are B2B or B2C, customers now expect to be informed every step of the way. Manufacturers which use outdated systems or keep their clients in the dark are risking the relationship.
Misunderstanding all costs involved: Logistics is notorious for hidden costs – things like wasted management time, over-stretched or under-resourced teams, and inappropriate vehicle use. These may not show up directly on the balance sheet, yet be a drag on your delivery transport. This is a common mistake and a critical one, as it becomes difficult to plan accurately without clearly understanding all costs.
Having an inflexible delivery set-up: A common mistake is having a logistics set-up which cannot adapt to changes in pace and demand. An inflexible fleet structure is unable to cope with the unexpected, such as absenteeism or spikes in demand. This can leave your customers in the lurch just when they need you the most.
Being in ‘reactive mode’: Transport logistics can become stuck in ‘reactive mode’ when they fall into the habit of weak production planning and inaccurate demand forecasting. This can result in orders being released at the last minute, forcing manufacturers to rely on premium freight, partial loads or suboptimal routes. Not only do costs per delivery tend to increase, it places unnecessary pressure on warehouse and transport staff.
Keys to correcting common logistics mistakes
Australian manufacturers can create a productive and efficient environment, and correct these common mistakes, by putting the following into action.
Recognise logistics as a strategic priority: High performing manufacturers treat logistics as a strategic priority, rather than just a necessity. In practice, this means transport strategy is aligned with business objectives. Logistics leaders are involved in broader business planning, sales forecasting, and customer service discussions.
It also means production schedules are aligned with transport planning, and you are more likely to create an efficient set-up which can deliver consistently.
Understand all the costs: Weed out the hidden costs by doing a fearless analysis of your logistics transport. This may take a little time, but there is technology available allowing you to perform a ‘fleet x-ray’ and see all costs involved in running a delivery fleet. This is an essential step towards understanding your delivery efficiency.
Create a flexible, responsive logistics team: There is no one-size-fits-all solution, but every manufacturer can benefit from flexible, adaptive, responsive logistics. Key is how resources are engaged and managed – can you add resources at short notice? Is it easy to replace absent staff? Can you react quickly to changes in demand and respond to new clients? Can you adapt without compromising service? An efficient set-up can fulfill all these objectives.
Implement real-time visibility: Real-time visibility is the goal, possible via transport management systems, GPS tracking, and automated status updates. This means customers are informed. It cuts down on surprises, and helps to create the grounds for a high performing team.
Strengthen packaging standards and load optimisation: Improving packaging design and load planning might include standardised pallet sizes, clearer labelling, and packaging designed for transport. The goal is to reduce damage, complaints and returns, and improve delivery efficiency.
