Many managers in the logistics area do not have the visibility of what is happening in terms of good practices in terms of costs and level of service in the market. Overall, the job of managing routine receiving and delivery operations and their attendant complications already takes up all the time and effort of logistics professionals in most companies. But often some other company has gone through these same complexities, and innovatively offered a unique solution that made their operations considerably easier to manage, and clearly had a substantial impact on costs.
Figure 1 – Highly automated warehouse in the ceramics industry (Example of good practices in cost reduction)
Source: Disclosure
Given this scenario, we at ILOS often receive contacts from companies that want to understand their position both within their industry and in the market as a whole. This positioning is usually described in terms of costs and level of customer service, since they make up a classic trade-offs logistical. A company whose strategic point is customer service premium the customer, always with maximum availability of their entire product portfolio and/or with minimum delivery times, can expect their logistics cost indicator to be above the market. Analogously, a company that has as a strategic practice the maximum reduction of transport, storage and inventory costs will certainly realize that its customer service level indicators are below market practices.
In addition to understanding this position on the trade-offs costs and level of service another gain of projects of benchmarking is the discovery of new practices. Usually the introduction of innovative technologies in logistics manages to break the barrier of this trade-offs reducing costs without harming the level of service. The incorporation of fiscal gains, fleet scheduling and the reduction of general levels of safety stock can be other examples of practices adopted by the market that bring substantial returns on logistical costs without compromising customer service.
And does your company know its positioning in terms of costs and level of service in the market? Do you have visibility into best practices?
