How Can Logistics Planning Help Your Business

Key Takeaways:

• Every e-commerce company should have a strong logistics plan in place, regardless of the company size or the type of goods it is selling. 
• A well-structured logistics plan is essential for assuring the efficient sourcing, storage, and delivery of products in an ecommerce business, resulting in customer happiness and business growth.
• A robust logistics strategy reduces risks and inefficiencies and optimises cost management, giving a competitive advantage and enabling scalable business expansion.
• Logistics planning must be adaptable and scalable to suit the individual needs of the business, with the necessary infrastructure, technology, and partnerships in place to deal with varying volumes and complexity.
• Effective logistics planning improves the customer experience by assuring timely deliveries, proper product handling, and a simple return process, all of which contribute to customer happiness and retention.
• Outsourcing logistics planning to specialised third-party providers can give important insights and efficiency, particularly for organisations with limited in-house knowledge.

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Running an ecommerce business is a complex endeavour that requires a sound, all-encompassing plan. Although it’s not the most fun aspect of handling an online retail company, an effective logistics plan is definitely among the most critical parts of your ecommerce strategy. 

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The hard truth is that logistics planning takes time and resources. It requires streamlined operations and entails taking a long, hard, top-to-bottom look at your supply chain. It involves determining how each interlocking component will work together like a well-oiled machine that will make sure the products you’re selling end up safely in the hands of your online shoppers. 

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The logistics planning process comes with numerous challenges. Still, a robust logistics plan will help minimise risks and assist you in boosting cost efficiency while providing good value and fast delivery to your consumers. It requires scalable operations that will remove inefficiencies and help you gain a competitive advantage, and accelerate growth.

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What is Logistic Planning?

Logistics refers to how you handle your product from creation to delivery. Logistics planning entails fine-tuning such procedures to account for the most efficient use of your systems, equipment, and storage facilities in order to build a seamless system. It is the act of gathering essential supply chain information and then developing a plan to ensure that the products you sell are always available to your consumers, as well as making sure the products they buy get to your customers as quickly as possible.

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As a rule, though, every logistics plan should include details on:

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• Procurement (sourcing materials, suppliers, tools, and services)
• Suppliers
• Transportation
• Handling
• Resource management
• Verwaltung der Bestände
• Verpackung
• Erfüllung
• Reverse logistics

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Which Companies Should Invest in a Solid Logistics Plan?

Logistics planning is most efficient for businesses that manufacture physical products and transport them over a multi-step supply chain. For example, factories, warehouses, and retail outlets can improve overall operations to create a more stable and efficient organisation that is ready for future expansion.  

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In this article, we will mostly talk about a logistics plan for a modern ecommerce business.  

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Logistics planning is no longer limited to huge enterprises. Smaller businesses that create logistics strategies stand a better chance of succeeding in the ever-changing landscape of the global economy.

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What Does a Solid Logistics Plan Entail?

Typically, a solid logistics plan is based on a three-part methodology that covers your complete system, though later in this article, we will cover the aspects of logistics planning in a more granular manner. 

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• A robust, adaptable supply chain that focuses on long-term goals will position your company for success by pleasing customers and addressing their needs. Your goals, both incremental and long-term, must include quantitative criteria and rely on real-time data to measure performance.
• Means relates to your capacity to give a pleasant client experience that will improve customer satisfaction, add value, and strive towards long-term objectives. 
• The approach focuses on strategies for attaining all corporate objectives.

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It is paramount to point out that logistics planning is not a quick fix for a single set of ecommerce challenges. Rather, it is a set of scalable solutions with a long-term, customer-centric approach that entails mapping out strategies and setting objective, obtainable goals. 

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Establishing a complete logistics plan and strategy is not an easy process that can be completed overnight. Unless you have extensive e-commerce experience, you'll probably want to hire a third-party logistics planning service like Bezos to establish this plan and guarantee that it's carried out properly. But more on that later.

Why Is Logistics Planning Important?

Logistics planning enables you to develop short-, medium-, and long-term strategies to maintain business health, keep customers satisfied, and avoid internal and external miscommunications.

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Without a solid logistics plan in place, your company risks taking an unexplored path into the future, with little to no consideration given to the following key aspects:

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• Customer experiences
• Growth plans
• Streamlined operations and processes
• Productivity

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This can have disastrous effects on your organisation, resulting in slow growth, poor client retention, and - yes - imminent failure to keep up with the competitors.

Main Components of Your Logistics Plan

Now that we've covered what a logistics plan is and why it is key for your e-commerce success, let's go over each component in greater detail and examine some of the points you should keep in mind for each component.

Sourcing (Procurement)

Procurement refers to the process of acquiring goods and services from suppliers. Many e-commerce organisations employ a procurement manager, who is responsible for assessing the company's needs and then determining the best solution.

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Every online retail business must have both outstanding products and great partners. As part of your logistics strategy, conduct research to identify a number of solid, dependable suppliers with whom you can collaborate and rely on to replenish stock as needed in a timely and cost-effective fashion. Having many vendors available reduces the likelihood of stockouts.

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Additionally, you will need to obtain the necessary infrastructure - tools, equipment, and services - to suit your business requirements. Courier partners, warehousing and fulfilment solutions, and technology are only a few examples of the resources required.

Transportation

Whether you're transporting raw materials, inventory, or orders, a reliable courier network is essential for keeping your goods safe and arriving on time. You'll need to evaluate first- and last-mile delivery choices, as well as different partners, depending on whether you're shipping domestically or abroad.

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Regardless of your geolocation, you will have access to a broad network of established courier partners. In many circumstances, it is more cost-effective to use multiple couriers based on where your products are going and what you're sending. You should also examine how you will employ transportation to strategically put your inventory, and if you are shipping in large quantities, request custom quotations.

Handling

Prior to reaching your shopper’s hands, products move through numerous pairs of hands, on the back of an assortment of vehicles, and through a range of environmental conditions. Therefore, your packages should be handled properly. Otherwise, your goods may end up damaged or lost. 

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In many circumstances, how items are handled is beyond your control. You'll be relying on the professionalism of others throughout the supply chain, so it is of utmost importance to work with partners you can trust and rely on.

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However, it is up to you to guarantee that things are correctly wrapped. You should use adequate packing for fragile goods and make sure that they do not get smashed around in their box while being transported. It's also a good idea to get shipping insurance for valuable items.

Resource Management

Ecommerce companies, regardless of their size, should understand how to make the most use of their resources. So, be sure to reach high levels of cost efficiency by minimising the waste of resources and making sure they're not underutilised.

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The number of resources required for resource management varies depending on the size of your organisation. Smaller businesses may be able to get by with basic planning and forecasting methods. Still, as organisations grow, they require scalable infrastructure and may need to hire a professional staff to manage resources successfully.

Verwaltung der Bestände

Though inventory management perhaps doesn’t seem like a component of your logistics planning that should be prioritised, it is definitely among the most important ones. Having a thorough grasp of your stock, such as what sells and what doesn't, and taking actions to reduce stockouts and waste are critical to maximising profitability and growth.

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Inventory management can be difficult and time-consuming if you do not have the proper tools. However, utilising inventory management software that automatically collects and provides critical data in an easy-to-understand format can make inventory management much easier.

Verpackung

Packaging serves two key functions: 

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• Getting customer purchases to them in one piece 
• Providing an excellent unboxing experience

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When planning your logistics, you'll want to consider both of these aspects and ensure that your packaging is affordable and easily available.

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Some brands create their own packaging, while others use packaging provided by couriers or other third-party packaging vendors. If you're just getting started, customised packaging may seem like an unnecessary expense; nevertheless, as your business grows, bespoke packaging becomes critical for increasing brand exposure, recognition, and loyalty.

Auftragsabwicklung

Your order fulfilment strategy will also be an important part of your logistics plan. Fulfilment begins when a consumer places an order with your store and concludes when their order arrives securely in their hands.

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A lot happens within that time frame, including order processing, picking, packing, and delivery. Each of these should be considered in the fulfilment phase of your logistics plan, as well as how you store and position your inventory to successfully satisfy each and every order.

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While multi channel fulfilment can be done in-house or even from your bedroom, once you reach a certain scale, it might be challenging to efficiently and safely fulfil orders.

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We highly recommend outsourcing order fulfilment, especially the fulfilment risk assessment process, to a third-party company like Bezos that can handle storage, picking, packing, shipping, and returns while also providing potent and user-friendly inventory management software. All while providing additional perks and generating excellent customer experiences.

Reverse Logistics

In e-commerce, reverse logistics generally refers to customers returning products. Customers return things for a number of reasons, and providing a straightforward option for them to return unwanted products is critical to remaining competitive and optimising customer retention. 

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The subpar RMA process, on the other hand, may discourage your shoppers from buying with you again in the future.

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Your logistics plan should include a detailed policy and process for returns, as well as strategies to reduce the cost of returns. You should define the following: 

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• What constitutes a valid return
• How customers contact you about returning a product
• What they must do to return a product
• How you will handle them once they are back in your control, etc..

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Ideally, you'll also want a plan for reducing the number of return requests your company receives. Certain e-commerce companies even charge for returns, but whether or not you can afford to implement this practice and remain competitive is usually determined by your market position and status.

Logistics Planning Supply Chain Example

Many businesses use overseas production to decrease operational costs and improve revenues. This example describes the international logistics of a business that makes and sells environmentally friendly devices made overseas but are sold in the US. 

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Green Gadgets is an internet retailer specialising in environmentally friendly devices. Their core market is the thriving metropolis of New York City, with a growing clientele in Los Angeles and Chicago. Green Gadgets has a strong logistics plan in place to ensure a flawless client experience.

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The company gets its products from a certified sustainable producer in Taiwan. To reduce environmental effects, materials are carried in bulk via ocean freight to the Port of Long Beach, California. Upon arrival, the goods are rigorously inspected and divided into standardised pallets with RFID tags for exact tracking.

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To speed up delivery to clients, Green Gadgets has teamed with a fulfilment centre in central California. Incoming pallets are quickly emptied, and products are cross-docked onto high-speed conveyor belts to ensure efficient order picking and packing. The fulfilment centre uses innovative warehouse management software to optimise inventory levels and picking routes.

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Orders from New York City are prioritised for air freight to assure next-day delivery, whilst ground shipping is adequate for consumers in Los Angeles and Chicago. The logistics team closely monitors shipping carriers' performance indicators, such as on-time delivery rates and damage claims, to discover potential improvement opportunities.

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Green Gadgets measures the success of its logistics operations using key performance indicators (KPIs) such as order fulfilment time, shipping costs, and customer happiness. By analysing these measurements, the organisation can discover bottlenecks, optimise operations, and look for cost-cutting options, such as negotiating lower shipping rates or investigating alternate forms of transportation.

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Ultimately, Green Gadgets' success is dependent on its ability to balance speed, cost, and sustainability in its logistical operations. By constantly refining its approach and harnessing technology, the company hopes to provide excellent client experiences while reducing its environmental impact.

Pro Tip: Outsource Your Logistics Planning to Boost Your Business 

Unless you have a dedicated and experienced logistics planning team in-house, we highly recommend outsourcing this aspect of your business to a third-party service provider. It is beneficial to have an experienced logistics planning company involved in managing this convoluted process. At the same time, your core team can focus on other aspects of your thriving e-commerce machinery. 

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This will help you to identify weak points and provide useful information right from the get-go.

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People who specialise in logistics planning and have previous expertise in your business can provide significant insights. They can highlight known failures and triumphs at each point of the supply chain, allowing you to develop a feasible plan quickly and with less trial and error.

Streamline Logistics Planning With Bezos 

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Outsourcing order fulfilment to a third-party shipping and fulfilment company such as Amazon saves time and money by streamlining storage, selection, packaging, and delivery. Our services offer consumers complete transparency and control over their orders through an easy-to-use dashboard. From storage to delivery, we will handle every step of your client's journey to create a flawless experience from beginning to end.

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We are levelling the playing field for small and medium-sized businesses, which was previously only available to larger corporations. Our order fulfilment services provide unmatched scalability and pricing, allowing you to develop faster than ever before.

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Easily integrate Amazon inventory management services with existing eCommerce platforms like Shopify, WooCommerce, Squarespace, and more for more ease.

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Bezos' order management system helps save time and money. Our streamlined procedure provides a simple option for organisations of all sizes wishing to simplify processes and save time without breaking the bank. Our services also generate efficient and effective unit economics, allowing you to reduce the expenses connected with order fulfilment and shipping logistics. 

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Customer satisfaction is critical to the success of any eCommerce order fulfilment system. It includes every step of the process, from when a consumer places an order to when they receive their item and everything in between. The total customer experience should be seamless, efficient, and enjoyable to all parties involved. Bezos assists brands in improving their customer experience by providing more accurate and reliable fulfilment and delivery services.

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Get a free quote today and take advantage of Bezos’ expert service and advice. Unlock savings and the key to better customer satisfaction today! 

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FAQs

How Do You Write a Logistics Plan?

Writing a logistics plan includes but is not limited to the following steps: 1. Identify the shipping requirements; 2. Determine the necessary resources; 3. Draft an initial plan; 4. Approval: Initial Plan; 5. Evaluate potential suppliers; 6. Estimate costs and budgets; 7. Plan the transportation route; 8. Determine the shipping mode. 9. Make a delivery and contingency plan; 10. Prepare legal and customs documentation; 11. Coordinate with stakeholders; 12. Implement the logistics plan; 13. Troubleshoot; 14. Implement changes if necessary. 

What Are the 7 Steps of Logistics?

The seven steps of logistics include: Step 1: Understand the Fundamentals of Logistics; Step 2: Conduct market research and identify your niche; Step 3: Create a Business Plan; Step 4: Secure Funding and Resources; Step 5: Create a Strong Team; Step 6: Implementing Technology; Step 7: Create Partnerships and Networks.

What Is Logistics in Action Plan?

Logistics planning is an action plan agreed upon by all stakeholders that outlines a company's logistics goals. It includes everything from sourcing raw materials for product manufacturing to managing customer shipping.

What Is a Project Logistics Plan?

It includes a combination of solution design, special cargo transportation, and project management services, such as precise planning, orchestration, and sequencing of end-to-end shipments from suppliers to destination sites to ensure that all cargo converges and arrives on schedule.

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