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Why digital logistics is the best cost-cutting initiative

Knut Fredrik Ramstad | 16. Apr 2020
3 minutes read

Is gaining a competitive edge on the top of your agenda?

Probably. But in an increasingly complex and disruptive logistics environment, keeping ahead of the competition to take your business to the next level may seem like time-consuming and costly investment. After all, your current processes and solutions are keeping you afloat just fine. Why rock the boat?

Well, you don’t have to.

Going digital – by adopting cloud solutions safely, step-by-step – will help you manage your deliveries much more efficiently. In turn, this will save you both time and money.

Let’s take a look at how moving to digital logistics will help you cut costs and grow your profits.

 

1. Label your goods using GS1 standards

These days, many receivers require that your products and logistics units are properly identified and labelled. Otherwise, it is not possible for the receiver to seamlessly introduce them into their internal flows. Your products may then not be accepted by the receiver at all or rejected, potentially putting your entire business at risk.

Less drastic than this, but still relevant: One of our clients was distributing perishable products, without properly labelling the goods and monitoring the delivery process. The producer suffered a 10% product return rate. In other words, 10% of potential revenue went out the window.

In the retail sector, this means that GS1 standards are required. In the case of the producer above, when proper GS1 labelling was used throughout the chain, there were no more returns, and profits increased by 10% of the revenue.

A cloud-based delivery management system can help you print labels in compliance with GS1 standards.

 

2. Reduce inventory cost

Companies tend to keep extra stock, just in case. Typically, this is based on hunches, not data.

Too much on-hand inventory increases your storage costs – and thus your cost of goods sold. Keeping track of your inventory levels is the best way to prevent overstocking inventory and, as a result, reduce inventory cost.

The proper delivery management systems help keep this information automatically up-to-date, allowing you to make quick, strategic decisions about how much inventory to have on-hand.

 

3. Make your customer experience digital

Keeping your customers happy is equal to cost reduction. Optimising the customer experience, by digitally collecting and acting upon customer feedback, brings repeat business from existing customers.

This is easier and more profitable compared to finding new ones. By keeping your customers happy, you can keep business up and spread out the cost of delivery management over a greater number of orders/clients.

 

4. Automate your processes

Making your internal processes fully digital will reduce the time you spend on operational duties. This allows you to stay laser-focused on your customers, by putting all personnel, technology and capital resources on innovations that will provide a competitive advantage to grow your business.

 

5. Take the step from paper to cloud!

Traditional logistics hurts your bottom line. Moving beyond paper-based processes is the only way to ensure that information about your products is correctly and efficiently shared with your trading partners in the supply chain.

If your available information and communication technology is limited, your best bet is to start using a cloud-based delivery management system. SaaS solutions are low-cost, easy to implement and can help you manage the complete delivery process from factory to client.

digital logistics


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