Market penetration, supply effectiveness, lower costs, and high delivery support to end users can take years to get right in any business.
They are all linked to logistics, which impacts every part of a company and becomes the invisible glue that bonds a business’s infrastructure. Logistics draws on key services such as transportation, storage (or warehousing), project management, compliance expertise, and financial transactions. Therefore, the crucial element is ensuring that all parts function cohesively, with an organized plan to account for every possible scenario.
Well-structured logistics is essential. If one part of the supply chain doesn’t work, it may all fall apart. Further, shipping disruptions can lead to logistical problems within the supply chain, putting 20% of revenue at risk. Hence, get logistics right, and the rewards will follow.
What We Will Cover
- Introduction to Logistics
- The Role of Logistics Across Business
- The Steps Involved with Logistics
- DDP and Logistics
- Impact of Bad Logistics
- TecEx Client Logistics
- What Our Logistic Solution Can Look Like For You
Logistics and its Role Across Businesses
Supply Chain Management
Logistics plays a key role in the broader supply chain, and it is responsible for efficiently sourcing materials and supplies, facilitating smooth transportation of goods, storing goods until they are needed, and delivering products to the end user. Tech companies, in particular, need a watertight supply chain to ensure demand is met when it matters most. Failure to get this process right can lead to potential downtime across essential server networks. Furthermore, due to the surge in AI, the growing demand for chips in the tech sector makes effective supply chain management crucial to success.
Inventory Management
Correct logistics management enables a business to ensure the appropriate amount of stock is where it needs to be and when it needs to be there. This can be critical when data centers rely on growing their capabilities to deal with additional load or new client demand. When managed correctly, this can reduce waste, mitigate risk, and ultimately drive efficiency and lower overall costs. These savings can be reinvested into further growth and, therefore, faster expansion.
Customer Satisfaction
Fast and accurate deliveries drive end-user satisfaction, ensuring that the items needed are in the right place at the right time. A high standard of logistics can create a unique selling point (USP) for a business in a competitive landscape. Being capable of delivering products on time can be the most pivotal requirement of a fast-paced industry such as telecommunications.
Customer Satisfaction
Fast and accurate deliveries drive end-user satisfaction, ensuring that the items needed are in the right place at the right time. A high standard of logistics can create a unique selling point (USP) for a business in a competitive landscape. Being capable of delivering products on time can be the most pivotal requirement of a fast-paced industry such as telecommunications.
Cost Control
Regular cost analysis through logistics can help businesses identify areas where cost reductions can be made. This drive for logistical excellence allows companies to be more agile regarding price sensitivity for buyers. Regular reviews of suppliers and carrier contracts allow the best possible rates and volume discounts.
Quality Control
By developing a quality assurance level within the logistics process, businesses can create a strategic advantage through excellent service and product delivery. This is driven by a deep understanding of packaging, storage, and movement of goods.
Globally, this can be one of the most important steps a business can take, with many countries having different regulations and import licenses on what is and isn’t allowed, how items must be packed, and what information must be displayed.
Risk Management
Planning is essential for removing risk. These plans can reduce issues such as transport delays, supply shortages, and disruptions in the production process.
An example of how issues can occur in the logistics process is the bottleneck in the supply chain created in the Red Sea. Through good planning and risk management, several companies could have overcome the issues by having backup shipping lanes in place, allowing operations to continue as disruptions in the Red Sea unfolded.
If you want to see the potential risks involved with your shipments, check out the TecEx Risk Calculator, and ensure you manage any risk quickly and effectively.
Integration with Technology
Technology has also been pivotal in developing logistics and the wider supply chain. Advancements in warehousing technology have led to quicker turnarounds and decreased mistakes, which would result in delays. The development of technology for resource planning and transportation management has also driven a more substantial operational standard throughout industries where logistics plays a key role. Furthermore, due to the recent trends in AI, logistics is being streamlined through real-time tracking, more efficient delivery, and smarter demand predictions.
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The Seven R’s of Logistics Management
The 7Rs are crucial to truly optimizing logistics. TecEx is an expert in this field and will help transform your supply chain game. The seven Rs refer to getting the right product, at the right quantity, at the right time, in the right condition, to the right place, to the right customer, at the right cost.The 7Rs are crucial to truly optimizing logistics. TecEx is an expert in this field and will help transform your supply chain game. The seven Rs refer to getting the right product, at the right quantity, at the right time, in the right condition, to the right place, to the right customer, at the right cost.
The Impact of Poor Logistics
Working with TecEx who are experienced in this field is crucial, as poor logistics can significantly affect general business operations.
In 2020, nearly 60% of North American and European companies said they lost up to 20% in revenue due to disruptions in logistics. Outlined below are the impacts of poor logistics.
Communication
Poor communication within the logistics process can have a significant impact on the overall supply chain. This can include late deliveries, lost inventory, increased costs, bad reviews, inability to plan inventory, and poor forecasting. Having clear channels of communication and plans to cater to any potential issues is vital to ensuring logistics performs well.
Technology
If the right technology mix is not applied within the logistics process, it can lead to slowed operations, increased costs, difficulty scaling, and potential delivery issues. As technology continues to develop, businesses must evolve and adapt. TecEx constantly analyzes new and emerging technology for global import and export.
Bad International Shipping Plans
When developed correctly, shipping plans can mitigate potential issues, such as unforeseen disruption or shipment damage. Not having a good international shipping plan can lead to untimely deliveries, increased costs, poor productivity, customer churn, and an inability to scale. Good shipping plans are usually developed by individuals within businesses who understand the specific needs and local nuances involved, such as the team of experts at TecEx.
Packaging
As trivial as it may sound, packaging can disrupt the logistics process. Poor/incorrect packaging can cause product damage, reshipment costs, damaged packaging, customer dissatisfaction, and higher shipping insurance costs.
Lack of Local Understanding
One of the most valuable assets within logistics is the local, national, and global knowledge of tariffs, packaging, legalities, and compliance. A lack of understanding of the logistics process caused by a skills shortage, poor communication, or poor supply chain management can impact customer retention.
DDP Logistics
Delivered Duty Paid (DDP) is a common incoterm term that refers to the responsibilities of a seller and buyer within a trade contract. The seller takes responsibility for all risks and fees associated with shipping goods until they reach their destination. Therefore, logistics management becomes key when considering the additional factors involved with the movement of goods.
Import duties can differ from country to country depending on several factors, meaning the exact amount due might not be known until the shipment has arrived at the destination. This may lead to challenges when plans and schedules are built around a set delivery date. Therefore, getting the right partner to handle the logistics, compliance, and duties involved in any country you’re shipping to is integral to success.
Logistics At Play
Logistics plays a large part in a company’s supply chain strategy. While it can deliver a best-in-class service for those who get it right, the pitfalls are clear when it comes to global expansion. Getting a clear understanding of the tariffs and potential issues within each location is essential to being able to ensure several of the seven R’s are covered, especially the right time and cost.
If you’re experiencing any of the issues highlighted or considering a global rollout, TecEx is the only choice to ensure you get the 7Rs covered with the added benefit of liability cover being available for additional peace of mind.
Where TecEx comes in
It is therefore essential to get a clear understanding of the tariffs and potential issues within each location. This ensures that all of the seven R’s mentioned are covered, where TecEx places extra emphasis on the right time and cost. If you are experiencing any of the issues highlighted above or considering a global rollout, TecEx is the only choice to ensure you get the 7Rs covered, with the added benefit of liability cover being available for additional peace of mind.
TecEx is a global leader in ensuring your valuable goods are delivered fast and pass through customs on the first attempt. This reassures you and helps guarantee fast-paced growth that exceeds competition.
Still unsure if we can help? Our case studies provide real-world examples of how TecEx can help any tech business navigate the difficult logistical waters.