Tag: supply chain logistics

logistics management

How Procurement Market Intelligence Solution Improved Logistics Management Process for a Retail Firm – A SpendEdge Case Study

The Business Challenge

The client, a leading retail company with convenience stores spread across the United States, wanted to focus on the “last mile” delivery of groceries ordered online. They sought to manage merchandise and inventory to ensure steady sales of stock and reduce chances of stock reduction. They also realized the need to handle problems related to the distribution network that were resulting in wastage of time and money. This compelled them to engage with SpendEdge and closely scrutinize their distribution network to ensure effective logistics management and achieve the following objectives :

  • Analyze market size and growth rate, manufacturing process, and critical-to-quality factors.
  • Evaluate costs associated with materials, labor, transportation, energy, overhead, profit, and other cost components.
  • Critically evaluate available suppliers, their characteristics, and location where suppliers of the category are situated.

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Solutions Offered

The experts at SpendEdge worked closely with the client to address the challenges of logistics management and distribution network. They identified demand and price drivers that determined price and availability of products and provided real-time insights to determine appropriate supply markets. This highly focused approach helped the client to design facilities to manage an increase in SKUs and variety of order profiles.

The solutions offered improved the logistics management capabilities for the client and allowed them to incorporate strategies such as cross-docking. This enabled them to improve supply chain logistics capabilities and accelerate the velocity of inventory. Additionally, this improved the logistics management process for the client and ensured quick deliveries in minimum time and cost. The systemized logistics management process considerably reduced the cost of carrying inventory, material handling, transportation, and other related activities of distribution for the client.

SpendEdge’s solutions allowed the client to be more responsive to customers’ demand, speed time to market, and avoid the cost of carrying and managing a heavy volume of safety stock. The comprehensive market research  approach focused on the best practices to improve supply chain logistics and helped the client to react in quick time to changing trends in customers’ demands. They were also able to better gauge consumer sentiment based on both online and offline trends to improve logistics management capabilities and reduce strain on supply chain networks.

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Key Findings

In a span of six weeks, the solutions delivered by SpendEdge minimized the cost of physical distribution of the products by 29%. This enabled the client to attract additional customers by offering better services at lower prices. Moreover, an improvement in logistics management capabilities helped reduce the wastage occurring in the supply chain and streamlined the flow of the products to the end consumers.

The procurement market intelligence solutions offered by SpendEdge delivered an array of critical benefits, including reducing costs of distribution, improving customer service, and reducing chances of “no-stock” situations among others. It redefined the process of logistics management, saving time that was lost in making urgent deliveries and reducing the cost of inventory. Integrating distribution networks proactively also helped the client to ensure the smooth transition of products from manufacturers to retailers to meet customer demands on time.

What are Three Methods for Managing Logistics?

As logistics management plays a vital role in increasing the performance of the business, companies need to find ways to manage supply chain logistics. They can adopt various strategies according to their business needs. Here, we have compiled three key steps that can improve the logistics management process:

  • Inventory management: This is one of the most crucial steps in logistics management. An efficiently managed inventory helps identify a minimum stock level and keeps goods shelved to implement FIFO, or first-in, first-out, especially in the case of perishable inventory.
  • Automating processes: Automating the logistics management process helps companies to unlock value in supply chain logistics and streamlines operations in the long run. It also ensures that operations such as finance and accounting, logistics and supply chain management, and customer services are tightly coordinated to boost efficiency.
  • Planning and communication: As convenience product distributors work in a highly competitive environment, planning is vital to make scheduled deliveries and avoid no-stock situations. With an effective logistics management process in place, companies can easily communicate regular updates to delivery personnel in advance.

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Supply Chain Best Practices to Drive Business Success

The importance of supply chain management in today’s competitive market landscape cannot be undermined. With the expectations of both shareholders and consumers soaring, the collective capability, technology, resources, and scale of most supply chains have become insufficient.

Moreover, it can be said that the exponential increase in business complexities is one of the biggest challenges facing the supply chain. This surge in the complexity has been further fueled by challenges such as supply chain globalization, acquisition pace, new retail channels (i.e. omnichannel), regulations, and a rapid increase in the pace and complexity of new product introductions. This has forced companies to adopt supply chain best practices and renew their supply chain approach.

At SpendEdge, we understand that adopting supply chain best practices requires both knowledge and capabilities. Therefore, our team of experts has highlighted the supply chain best practices that companies can adopt to increase value creation across the supply chain.

Want to know how supply chain best practices can help you manage complexities? Get in touch with our experts and implement supply chain best practices for your organization. 

Supply chain best practices for companies

#1 Align supply chain responsibilities

Often, the decision-making power is divided among different people in organizations. This not only slows down the operations but also makes it difficult for companies to make quick decisions. Aligning supply chain responsibilities will ensure better supply chain management and greater efficiency for organizations.

#2 Utilize technologies

Companies integrate too many software to increase their efficiency without analyzing the needs of their organization. Instead, companies should analyze the efficacy of their processes that need improvement and then implement technologies that can address those needs. This is one of the supply chain best practices that can help companies to make better utilization of their supply chain.

#3 Devise strategic sourcing strategy

Strategic sourcing is imperative for supply management. It ensures the availability of supplies, lowers total cost, streamlines processes, and increases responsiveness to customers’ changing needs. Companies looking to implement supply chain best practices should focus on strategic sourcing rather than considering it the sole responsibility of the purchasing department.

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#4 Consider value over price

It is never advisable for companies to cut costs at every point of time, especially if they are aiming to achieve long term business goals. At times, they need to put value over price to retain their customers, keep business flowing, and establish themselves as a reliable supply chain partner. This requires companies to implement supply chain best practices and achieve better profits in the long run.

#5 Better inventory management

Inventory management is one of the supply chain best practices that companies are intending to improve upon in the years to come. It helps companies to substantially improve the bottom line and minimize their working capital. Even the top-notch companies are paying attention to inventory at the highest levels as it could represent over 50% of the cost of an item.

#6 Taking social initiatives

Reducing a supply chain’s carbon footprint is no more a choice for companies. It is one of those supply chain best practices that necessarily needs to be practiced. The reason being, buyers and consumers take it into consideration while choosing products or services. Any company not having productive social responsibility programs risks criticism from one or the other sources.

Implementing supply chain best practices is pivotal to increase the efficiency of the global supply chain. To know how your organization can benefit from these practices, request a free demo from our experts now!

 

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