Logistics Management: Strategies for Efficient Operations

It’s no secret that eCommerce businesses operate in a highly competitive landscape. After all, modern consumers want convenience, simplicity and efficiency, which is why they opt for online shopping, to begin with. Unfortunately, that’s not all. 

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Today’s consumers are also very, very picky about online stores they do business with. Even though they have a plethora of options to choose from, consumers will choose the ones that can satisfy their needs. 

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That usually involves next-day or even same-day delivery, low or nonexistent shipping fees and so on and so forth. If your store cannot manage such expectations, consumers will simply bounce to the next shop in line. 

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So, all you have to do is make sure that customers get their goods delivered on time with no hiccups along the way whatsoever. Simple, right? Not quite. 

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From a business point of view, such demands are next to impossible to meet given the circumstances. However, the customer is king and they’re always right, so you either manage or the competition outruns you. 

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Nevertheless, next to impossible doesn’t mean impossible, just extremely difficult. Fortunately, logistical management is there to help you achieve what seems to be unachievable. What is logistics management you ask? Let’s find out then.

What Exactly is Logistics Management?

Simply put, logistics management is a refined version of supply chain management. It encompases every aspect of procuring, transporting, warehousing, packaging, labelling and delivering goods to customers. 

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At the same time, this process focuses on improving efficiency, reducing overhead costs and ensuring customer satisfaction, among other things, of course.

How is Logistics Management Utilised?

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Well, that entirely depends on the nature of your eCommerce business. For instance, are you procuring raw materials from vendors in porter to assemble products in your manufacturing plants before shipping them off to end-users? 

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Or, are you a dropshipping entrepreneur who procures products from third-party suppliers and then sells them directly to customers through your online shop? Either way, the process is divided into two streamlined operations - inbound and outbound logistics. 

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As you might’ve guessed by now, inbound logistics revolves around moving raw materials or finished products into your warehouses, while outbound logistics revolves around moving produce or products from your warehouse to customers who made the purchase. 

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The only difference is that when manufacturing is involved, there are more steps and factors to consider than when you’re moving products from point A to point B and ultimately to point C, which are vendors, warehouses and customers respectively. 

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But why are these two operations important? Well, if you want to run a successful eCommerce or retail business, you must have a deeper understanding of supply and demand. 

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In other words, you must know exactly what your customers may want, when they might want it and in which quantities. If you don’t have that information, you cannot meet their orders. 

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Some companies even utilise predictive analytics to obtain such data. For example, a holiday season indicates that the demand for certain products will most likely increase tenfold. That means that you must contact your suppliers on time in order to procure enough goods and have them ready in stock when the influx of orders begins. 

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This is why inbound and outbound logistics need to be streamlined and this is also why they play such a crucial role. Put simply, if the goods come in on time, the same goods can be delivered to customers on time and you won’t lose business to other stores because you ran out of stock. 

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Therefore, planning ahead and establishing a good relationship with vendors and suppliers is of the utmost importance for your endeavours. 

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Strategies for Improving Logistics Management Operations

Logistic management is all about being one step or a few steps ahead of the game. Unfortunately, you’re no seer nor do you have magic beans or a crystal ball that can help you predict the future. 

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However, that doesn’t mean you cannot forecast consumer demand and anticipate in which direction their purchasing behaviour might shift and when. This is where modern technology steps in to help you out. As mentioned before, predictive analytics can help you understand the demand so that you may focus on the supply. 

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While such information is of great help, indeed, it’s still not the magic bullet that can solve all of your problems. That’s precisely why you must implement solid-proof strategies that will optimise and streamline your logistics operations. Here are a few of those for you to consider.

1. Planning Your Inventory

Every eCommerce owner can just straight up stockpile products to ensure that they’re never short on anything. However, that’s a very costly endeavour, not to mention completely wasteful. If you have too many items in stock, you’ll never run out, sure. 

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Still, the sheer costs for storing so many items can be astronomical. There’s also the fact that you may not sell everything you store, so you’re basically wasting both time and money along the way. 

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Inventory planning is the right way to go. What it does is help you have just enough inventory, perhaps slightly more than you need just in case, so that you can meet consumer demand without raising overhead costs. 

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In other words, ensuring cost-efficiency through analysing consumer demand and planning for it accordingly. This way, you still don’t run out of stock, without paranoid stockpiling of goods or products. 

2. Automation

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Automation in the supply chain has been a huge hit in recent years. It ensures that any and all human errors are reduced to a minimum or removed altogether. This is especially true in storing, labelling and packaging of goods. 

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Misplace one item and you may have a disaster on your hands. Well, automation ensures that doesn’t happen. Not to mention the fact that automation eliminates the need for manual intervention regarding mundane repetitive tasks. 

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This can save you a lot of time and money in the long run, as well as help you boost customer satisfaction by optimising operations for maximum efficiency. 

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So, whether you leverage automated robotics to store and handle goods or you utilise software to plan, organise and schedule tasks is irrelevant as long as you leverage automation the right way.

3. Warehousing Optimisation

Warehousing is arguably the most important factor in the entire supply chain and the most vital aspect of your logistics management process. But why is that? Well, look at it this way: All the goods or raw materials must be stored at your warehouses before they can be moved to either production line where products will be manufactured or shipped out directly to customers. 

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Moreover, warehouses are places where products will be stored, packaged and labelled before being shipped out so everything must be completely organised in order to avoid costly mistakes. The best approach to do that would be to implement a WMS (Warehouse Management System). 

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This software monitors and tracks everything from the moment the goods enter your warehouse to the moment they leave. What’s more, the software can integrate with other tools in order to streamline entire workflows. That said, let’s have a look at a few benefits of integrating a WMS into your systems.

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• Boosting operational efficacy - WMS can automate and improve warehouse operations with ease. It gives you a complete overview of everything that’s happening within the warehouse so that you can expedite movement of goods more seamlessly.

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• Optimised storage solutions - One of the best features of WMS is that it can analyse and make most use of your warehouse flooring plan. This includes optimal inventory placement, creating ideal travel paths, pointing out which products need to be prioritised and providing insights regarding how and where to place palettes, shelves and other equipment. 

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• Improved inventory visibility - As mentioned before, a WMS can integrate with other tools. In this case, it can work with barcodes, RFID tags and sensors to provide real-time inventory visibility. In other words, it allows you to track goods as they come and go, while helping boost traceability and ensuring more accurate demand predictions.

4. Optimising Fleet Management

Your vehicle fleet is what moves everything around. Without it, you cannot bring in the goods nor can you deliver the same to your customers. But having a fleet isn’t enough. You have to equip your vehicles with the latest technology that will help the drivers avoid traffic and take the best route from your warehouse to customers or retailers. 

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This is why an optimised fleet management strategy is an absolute must for your business. And, if you’re operating on a global scale, then optimising your fleet for international logistics is of paramount importance. That doesn’t just include your vehicles but also customs brokerage, compliance with international laws and regulation, freight forwarding services and overseas warehousing, to name a few. 

5. Outsourcing

If you can’t manage or afford everything on your own, it’s okay because there are ways to manage things properly, regardless. In that case, outsourcing is your best bet. 3PL (Third-Party Logistics) is a service where you can outsource some of your operations to third-party companies or providers, hence the name. 

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This can be anything from order fulfilment to distribution and even warehousing, depending on your needs, of course. Just like a tech company would outsource their digital marketing operations to a digital agency, provided they don’t have an in-house marketing team, you can do the same with some aspects of your eCommerce logistics and operations. 

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All you have to do is find a professional provider you can rely on, so that your business continues to operate at maximum efficiency.

6. Risk Management

It’s not a question if something may go wrong, but when something will go wrong. No matter how perfectly you organise and how much you try to avoid potential hiccups, sometimes things simply don’t go as planned. 

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So, when that happens, you have to be ready for it. But how do you prepare for a disaster if you don’t know what it may be? Oh that’s simple - you anticipate. It’s not that difficult to assume what the worst case scenario might be. 

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Having a contingency plan ready and waiting can save you in more ways than you can possibly imagine. For example, the most common issue is often a faulty or broken product that gets delivered to the customer. 

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At that point, the situation can go either way. The customer may ask for a refund or a replacement product, which is the best case scenario, or they might get completely infuriated and start posting negative reviews all over the Internet, which is the worst case scenario. 

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This is where you need to be proactive and act as soon as the problem occurs. Having a tailored return policy is the best customer-centric approach. In that case, you must also take reverse logistics into consideration. That includes having products delivered back to your warehouse for repairs or recycling if necessary. 

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In other words, be ready to offer customers a refund or replacement, as well as get ready to implement reputation management strategies to deal with a potential backlash of negative reviews on social media and other channels. 

What are the Benefits of Logistics Management?

So far, you’ve read about what needs to be done and how, but we still haven't gone over why you should focus on logistical management. So, what exactly does your eCommerce store gain from implementing all of these strategies? Let’s have a look. 

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• Customer satisfaction boost - Optimising your shipping logistics so that you always have enough items in stock and that you can deliver products to end consumers on time ensures greater customer satisfaction, customer retention and loyalty. You’re meeting customer expectations and needs, for which they will be grateful for.

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• Reduced costs - Streamlined logistics means there’s no waste, and no waste means no extra costs. In other words, you invest in exactly what you need, when you need it so that you can sell finished products to customers. If nothing gets lost, broken or misplaced then there are no delays or reimbursements to customers who got a faulty product.

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• Faster speed to market - As you may already know, the online market is not just overly competitive but overcrowded, as well. If you don’t deliver products fast or you’re unable to meet next-day or same-day deliveries, then the competition will kick you out of the race. 

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Logistics management ensures that you’re not just in the game, but also that you stay ahead of the competition by procuring, manufacturing and delivering goods to customers in a fast and efficient way.

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• Increased revenue and sales - Customer satisfaction, zero waste and fast time to market means that you’re doing what you’re supposed to do the best way possible. Don’t think that consumers won’t recognize or appreciate your efforts. Happy customers will recommend you to their friends and family and they will also make purchases at your eCommerce store more frequently. Ultimately, this will lead to greater profitability and additional sales that will positively affect your bottom line.

Ensuring Seamless Order Fulfilment With Bezos

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Small and medium-sized eCommerce businesses don’t have it easy these days. After all, the competition is fierce and if you can’t keep up with everything that’s going on in the market, not to mention keep up with rapidly changing consumer behaviour, you’re pretty much out of the game. 

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Here at Bezos, we make sure that doesn’t happen. If you feel like you can’t manage everything alone, we’ll help sort out your order fulfilment and logistic issues. Our range of services includes:

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• Warehousing
• Inventory storage
• Picking
• Packaging
• Shipping
• Returns

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Most importantly, we tailor our services to your business needs, so that your eCommerce store can continue to grow and remain afloat in today’s crowded market. If you wish to learn more, don’t hesitate to contact us and get your quote today.

Conclusion: Ensuring eCommerce Success With Logistics Management

Smooth operations and streamlined operations are the very essence of a successful eCommerce business. And everything revolves around logistics management. 

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Even so, numerous entrepreneurs still ask what is logistics management, exactly and why do they need it. Be that as it may, it’s better to ask now than to start a business with no prior knowledge, because that is a recipe for disaster. 

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There’s no shame in not knowing, as long as you’re willing to learn, in order to ensure business success. This is precisely why every online store owner should know everything about logistics management and just how much of a pivotal role this process plays in helping eCommerce business grow and develop further.

FAQ: 

What is logistics management in simple words?

Simply put, logistics management is the process of acquiring, storing and transportation of goods from suppliers to customers. And at the centre of it all is your online store.

What is an example of logistic management?

A good example of logistics management can be found in almost every eCommerce logistics strategy. 

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The way it works is that online stores utilise a network of distribution, fulfilment and sortation centres positioned strategically so same-day or next-day deliveries can be managed efficiently. 

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Once the goods arrive at these centres they are transported by the store’s fleet of vehicles to end users. Each centre caters to customers closest to it, so that unnecessary delays can be avoided. 

What is the work of logistics?

The work of logistics revolves around thorough research, planning and strategizing. Forecasting demand, monitoring inventory, ensuring that the fleet is operational, ordering materials on time and so on are all aspects of logistics. 

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You have to know what to order, when and how much so that finished products can reach your storage facilities and ultimately customers at the precise moment. 

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