In present-day global economics, logistics plays a key role in facilitating trade. Also, by extension, ensuring the success of business operations. Logistics managers have seen increasing challenges to create and keep efficient and effective logistics and supply chain methods.
Here we discuss five of the biggest logistics challenges faced on a daily basis.
Key Challenges Faced by Logistics Managers
1. Customer Service
Logistics management is all about providing the right product in the right quantity to the right place at the right time. Customers want full transparency into where their delivery is at all times. In this day and age, the location of a customer’s shipment is as interconnected as your social network. In fact, as customer expectations have increased, their willingness to pay for fast shipping has decreased, with just about 64 percent of consumers unwilling to pay anything extra for less than two-day shipping.
2. Transportation Cost Control
One of the highest costs contributing to the ‘cutting transportation cost’ concern is fuel prices. Higher fuel prices are likely to increase transportation costs for U.S. shippers this year by pushing up fuel surcharges. Additionally, rising U.S. diesel fuel prices are escalating surcharges added to freight rates, which is reversing a two-year trend that cut into the revenue and earnings of truckers as fuel prices plummeted.
3. Planning & Risk Management
In order to stay as efficient and effective as possible, periodic assessments and redesigns of each business sector are necessary. These adjustments are put in place in response to changes in the market, such as new product launches, global sourcing, credit availability and the protection of intellectual property. Managers must identify and quantify these risks in order to control and moderate them.
4. Supplier/Partner Relationships
It is important to create, understand and follow mutually agreed upon standards to better understand not only current performance but also opportunities for improvement. Thus, having two different methods for measuring and communicating performance and results in time and effort wasted.
5. Government and Environmental Regulations
Carriers face significant compliance regulations imposed by federal, state and local authorities. As well as federal regulations, environmental issues such as the anti-idling and other emission reduction regulations brought about by state and local governments have created concern that the compliance costs could exceed their benefits.
With the landscape of business operation continuously changing, there is a shift in the ensuing challenges as well. Therefore, staying up to date with these changes and taking preemptive measures to ward off challenges is a sign of successful logistics management.