4 Common Logistics Problems and How To Avoid Them
March 9, 2021
What are the common logistics problems and how to avoid them?
- Lack of communication
- Cutting down logistic costs
- Improving customer service
- Keeping up with technological improvements
Due to the rapid developments in technology, the e-commerce industry has seen an unprecedented increase in demand over the past years. To add to that, the current pandemic situation resulted in more people turning to the most convenient forms of shopping to obtain both goods and still ensure their safety. Today, common logistic problems are brought into the light and prove to hamper the efficiency of the entire industry.
Upon hiring a poor courier service provider, there are cases of unsatisfied customers due to lost, damaged, and delayed orders. Businesses — whether big or small — are under constant pressure to compete in the saturated market, deliver excellent customer service, and find effective ways to optimize their operations.
In this guide, we have rounded up the ongoing challenges that the logistic industry faces, as well as explore possible strategies such as hiring a reputable logistics company in the Philippines to overcome these. Ultimately, you can optimize your supply chain for the business to thrive as a whole. Continue reading to learn more.
Lack of Communication
There are many parties involved (suppliers, manufacturers, distributors, retailers, and customers) in logistics. Thus, the lack of communication is one of the most common problems being encountered. When there is a lack of communication in one party, the possibility of negatively affecting another is greater. It is the primary cause of other errors throughout the rest of the supply chain.
For example, if there is a miscommunication in the order-taking step, it will delay the distribution following the production of the goods. With a lack of communication, the retailers cannot update the shipment status. Thus, leaving the customer unsatisfied and losing more potential sales in the future.
To address this problem, the company must work synergistically and ensure proper communication. This can be done by establishing a platform of communication. Along with this, parties should be able to communicate in real-time.
Logistics is a fast-paced industry and the exchange of information also needs to be quick. Information queries such as customer orders, shipping rates, and the like need to be relayed to the next party as soon as it is received.
Cutting Down Logistic Costs
The logistic industry faces numerous costly shipping costs, which is another factor that can hinder the efficiency of operations. Not only do costs significantly impact the company’s overall budget, but it also increases the expenses of the customer. Therefore, customers may refrain from making repeat purchases.
One of the highest costs in logistics includes fuel surcharges. It is known that higher fuel prices significantly affect wage costs and transportation costs. In the Philippines, another factor to take into account is the urban scene, which is known for its congested streets and numerous thoroughfares. This can increase fuel consumption as well.
To solve this problem, companies must incorporate order tracking in real-time. There are logistics firms that invest in real-time tracking systems to evaluate road conditions and observe how a driver can respond while along the routes. Through this, they can also find out which are the best alternative routes to cut fuel costs.
Improving Customer Service
At the end of the day, customers are the driving force in the demand for logistics. These demands should prompt logistic firms to provide innovative strategies as well.
Today’s customers have higher expectations when they order goods online. They immediately want to know where their orders are along the shipping journey and when these will arrive. In fact, there are other customers that are willing to pay for express delivery such as two-day or same-day delivery as well. This can mean requiring more logistics efficiency. Without satisfying customer expectations, there is potential for not following through with the purchase.
It is clear that excellent customer services fuel logistics industries. Therefore, a solution for this is to provide customers with real-time tracking information. This way, customers can track their orders anytime. Along with this, companies must actively communicate if their goods are encountering any delays and why the delay is happening. In the same way, they must provide information about advanced shippings.
Keeping Up With Technological Improvements
In today’s technology-driven era, any business that does not adapt to innovations can end up running behind competitors, facing inefficient processes, and unsatisfying customers overall.
There are numerous technology management systems that bring more precision to operations. Among its many benefits, technology can monitor each stage of the logistics process, reduce workforce errors, increase security, and translate into a competitive advantage. It can even automate some tasks in line with inventory management.
It is clear that investing in technology is beneficial for logistics. However, keeping up with these can be costly and challenging without the right strategy. A good way to go about this is by clearly identifying which specific processes in the supply chain need to be innovated. This can be done by gradually improving the processes that work in your favor.
Upon testing the new innovations and garnering benefits such as efficient operations and increasing sales, you can proceed with investing in another type of technology.
This guide rounded up some of the common logistics problems. If your company is facing these, you may want to familiarize yourself with the appropriate strategies and partner with an efficient logistics company in the Philippines. They would have the experience, tools, manpower, and technology to help you tackle every challenge in your supply chain.