It can become somewhat of a conundrum. Working out how to get your products from the manufacturers, to the storage, and then from that warehouse to the customer. All of the logistics need to be worked out and in play pretty early on in your business planning. Setting up your website, working on getting finances sorted, they are all part and parcel of a startup too. If you are selling a physical product then you’re going to need your logistical situation setup or at least well thought out and ready to go.
Before we take a look at the different points that go into logistics it is important to know how it will impact your business and what it actually is.
Many people get logistics confused with supply-chain. It is a part of it, but the two terms aren’t interchangeable. Logistics is the movement of goods and supply chain is that movement – however, it is also sourcing, cost of goods, relationship management and everything else.
“Leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time. In other words, you must win through superior logistics.”
Tom Peters – Rule #3: Leadership Is Confusing As Hell
Fast Company, March 2001
It is something that most of the tie you don’t even think about. Because we are so used to having our deliveries the next working day, or same day. And when we go into a shop, we expect the products to be on the shelves. But behind the scenes, there are a lot of logistics in play. It has to be a well-oiled machine. When you are a customer, you get irritated when things aren’t available when you think they should be. When you are the owner – you need to make sure everything is where it should be.
Speed and cost will influence each other, and your customers too – what matters more? Speed or cost?
The whole process relies heavily on your ability to plan production and demand. You will know that you need 6 weeks for X product to arrive from China, and 3 weeks from mainland EU – so you can opt for a lower price for a longer shipping time. And you will then have a longer lead-in time for the product launch and release.
You are going to want to try out a few different types of freight methods. If you have planned correctly, you can choose to have a more extended travel time, slower, but ultimately cheaper way or you have time to find the right contract logistics company for you. Your internal logistics matters here too. How fast can you process orders? Working on the basis that your initial planning has gotten products from manufacturers to your warehouse in good time, you’re ready to ship to customers.
If you are promising a specific shipping date, then you should make sure that you are 100% sure that is what you will be doing. Managing your customer’s expectations is always the aim. The whole logistics process is what will keep your business running smoothly and your customers happy.
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