The Importance of Logistics in Lean Supply Chains

Having a strong plan in place when it comes to supply chain management is vitally important to your success as a business, to be sure, but also as it pertains to your customer satisfaction. There are several factors involved in crafting an effective logistics plan, including automation, coordination and delivery time. 

But even if your business is already successful, you have to agree there is always room for improvement. As your business grows, you must explore new ways to streamline your logistics planning processes, which often involves value stream mapping and lean supply chain consulting.  

And since COVID-19 hit earlier this year, the supply chain industry has faced even more challenges, including shifting customer demand, material shortages and restrictions, all of which have forced the hand of many businesses who need to rapidly adapt their supply chains, according to Supply Chain Digital.

Check out these tips that highlight the importance of logistics and supply chain management, and how you can get the help you require.

Logistics strategies are important in lean supply chains because they…

Generate Positive Business Results

An experienced logistics partner can make the back-end of your business look effortless, paving the way for durable logistics strategies that are not only efficient and clear but measurable as well. Any good logistics strategy worth its salt should be able to coordinate your goals and policies with your distribution and transportation partners, easily adapting to changes in your supply chain so customers are not adversely affected. Such a strategy should:

  • Make all the right people in your organization aware of changes in the supply chain
  • Involve the proper number of distribution centers or warehouses
  • Measure the frequency at which products should leave the warehouse or distribution center
  • Be regularly reviewed to learn if logistics partnerships are working well 
  • Employ revisions for optimization

Help Businesses Create Value

Key logistics strategies not only promote positive results for your business, they also create value for customers. Raising demand raises the value on items as they become available globally. You must review your strategy when issues crop up that negatively affect your customers. When you deal with issues on the distribution or transportation side head on, you are adding value for them.

Reduce Expenses for Effective Cost Accounting

Operating costs are a big concern for any business. Sure, these can no doubt be challenging to manage within your cost accounting procedures, but if you have a good logistics program in place, you can maintain these costs while reducing expenses in areas such as transportation, climate control and warehousing. Plus, you can eliminate larger expenses entirely and bank more money.

Improve Warehouse Management

The more effective your logistics management is, the better your warehouse management will be too. Warehouse operations depend greatly on the type of goods you sell. If you distribute perishables such as food, your logistics and value stream mapping strategy must include a warehouse inventory plan that aims to minimize waste. 

Strengthen Customer Loyalty

Your business may be attracting new customers through your robust marketing strategy already, but you also need to increase your logistics strategy in order to strengthen customer loyalty. You can generate all the new leads in the world, but it will mean nothing if you can’t convert them into repeat customers. That’s why you have to ensure you’re consistently getting your orders in on time and resolving customer issues promptly. Become a dependable company and you will maintain a strong customer base with a steady stream of revenue.

Enable On-Time Delivery of Products

Too many late deliveries will result in loss of customers. You already know this, but yet many businesses are still making this crucial mistake. A great example of on-time deliveries is Amazon, a company that thrives on offering same-day shipping, ensuring products are at their customers’ doors at the stated time or even before. They offer tracking information so customers can plan on the arrival of their orders. A good logistics strategy will ensure you stay competitive while meeting and exceeding your customers’ expectations.

As you can see, the above reasons highlight just how important logistics are in lean supply chains of today.

Contact Incito Consulting Group

Let Incito advise you on the importance of logistics in lean supply chains when you contact us at 866-697-LEAN or send us a message online. You may want to take advantage of our Lean Six Sigma Consulting services or value stream mapping workshop, which will help you get the most out of all your processes.

Want to learn more? Schedule a consultation.

About how Incito can help transform your business and tackle your most important strategic challenges.