Logistics management involves a number of elements. First, choosing the right vendors who will be providing materials in right quality & in right quantity at right price at right time at right place. Secondly, selecting the most efficient transport & routes for the shipping of goods and investigating the best method for delivery. Logistics management has also included the selection of software and IT resources to manage the entire process.
In the absence of wise logistics management decisions, Sometimes companies suffer huge losses and this can cause problems in getting the material at right time & delivering the finishes goods to end customer as per his expectations. No delivery or delayed deliveries can cause greater buyer/ customer dissatisfaction. Mismanagement in logistics planning can result in higher costs and the implementation of inefficient logistics software can cause more difficulties than it corrects.
To prevent these problems from happening, companies need to adopt several logistic management best practices. These companies need to focus on collaboration not competition. While companies do still have a tendency to look out for their own best interests, the trend towards a more cooperative business environment has helped more firms increase their profit margins & do lot of savings in various activities of logistics management. Without collaboration between the transportation providers, vendors, and buyers, savings cannot be achieved.
How to choose third party logistics service providers?
Those who look only at the price may actually put them at a competitive disadvantage. Companies should & must evaluate overall performance given by the service provider than price.
Price should not be the chief consideration, it should be a factor. Businesses need to evaluate quotes while also looking at reliability, collaborative attitude, and efficiency.
However, number of benefits can only be gained when the firm in question makes decisions regarding its company’s overall logistics management based on all factors, not just price.