Why Your Logistics Enterprise Isn’t Making Money

For any company, making ends meet in the current environment is a challenge. Demand is currently at a low ebb, and suppliers are struggling to meet order requirements. Logistics enterprises, therefore, need to up their games. But how? 

In this post, we look at some of the reasons why your company isn’t making money and what you can do to change the situation. 

You’re Not Demand Planning

Demand planning is a massive trend in the industry right now. Companies are looking for ways to use artificial intelligence and machine learning solutions to predict customer orders better and required inventory space. 

If you’re still using clunky paper-based systems, you’re going to struggle. You can’t figure out what you need in your inventory, and it’s leading to all kinds of cost- and space-related issues. 

Fortunately, you don’t have to go to the effort of implementing systems in-house in your company. Instead, you can often buy demand planning solutions off the shelf from reputable providers. They’ll implement the procedures for you, helping you avoid excessive disruption while lowering costs. 

You’re Not Looking After Your Equipment

When you run a fleet of trucks, keeping them on the road is a significant part of your operations. You need to continually maintain them, looking for components like MAN cylinder head 50.03100-6001 fitted to E2842 – E2876. It’s all very complicated. 

The trick here is to develop a two-pronged process that helps keep your equipment on the road reliably, year after year. First, you need to provide preventative maintenance on your vehicles. This process involves swapping out parts that might fail and cause downstream damage to other parts of the vehicle. 

The second is to incentivize staff members to look after their equipment as carefully as they can. Safe driving rewards for employees, for instance, help to cut overall liability. 

You’re Neglecting The Last Mile

Logistics companies like focusing on the big picture stuff because it is the easiest. Essentially, you’re just scheduling major deliveries between warehouses and depots, allowing other people to deal with the complexities of putting goods where they need to go, 

Neglecting the last mile, however, isn’t a good idea in today’s environment. Many companies want end-to-end solutions from their third-party logistics providers. And that puts the onus on you to provide it for them. 

The preferred strategy here is to use LTL, splitting up your trucks among various clients and providing a more granular operation. 

You Haven’t Decentralized Your Warehouse Operations

Given the brave new world of e-commerce, old centralized warehouse operations are fast becoming a thing of the past. Now logistics firms recognize the need to bring their inventories closer to their target markets. 

Companies that use 3PL are increasingly looking for arrangements like these. Many are parking their warehouses right outside cities and then shipping goods as orders arrive online. They want same-day or next-day delivery as a minimum. 

Having inventory close to consumers also allows you to process it overnight. Client customers place their orders in the evening, packing occurs during the night, and trucks are out for delivery the next day.