Poor materials logistics costs the construction industry more than $2 billion dollars every year. Too often, logistics in the construction industry revolve around on-site handling which is usually too little to impact on the total cost of completing projects.
According to Liker, a famous philosopher, waste is defined as the opposite of value where value is any process that a customer is willing to pay for. Waste is also used in reference to resources that add negligible or no value to the final product. Waste is therefore loss of resources including time, materials, equipment, labor and capital, when these resources are produced by activities that contribute to the final cost but do not add value to the final product.
In the construction industry, after the design is agreed upon, most of the value adding usually occurs at the site. Activities that add value are assembly, packaging and finishing. Other activities such as moving, counting, storing, scheduling and sorting can therefore be said to be wasteful.
Unfortunately, research blames the supply chain for most of the wastes in the construction industry. One report went as far as saying that wastes in the construction industry are mainly caused by “obsolete, myopic control” of the supply chain. Continue reading
The success of your business depends so much on the quality of your retail logistics. Everything, right from sourcing for raw materials to transportation, delivery and installation will influence the success of the business. Where there is a smooth flow of operations, usually as a result of solid retail logistics, it becomes easier to satisfy your customers at relatively lower costs leading to higher returns on investment.
Of course, retail logistics is such a critical component of your business so it may be hard to even contemplate outsourcing it. But if you take a moment to think about it, you’ll realize that working with a third party logistics provider may be just what you need to offset your profits.
The advantages of using third party logistics mainly result from economies of scale and economies of scope, both of which encourage retailers to increase net profits by reducing costs. Competent 3PL providers boast superior coordination ability which enables them to search for and find reliable sub-contractors and business partners. Normally they also possess the ability to better manage inter-firm flow of goods. Logistics is very technical and time consuming. So by outsourcing, you will save a lot of time which you can invest in other areas of the business. Continue reading
The need for freight forwarding in the supply chain results from the complexities that often arise during the transportation of products, especially across borders. If you have goods to transport from point A to point B, a freight forwarder will find the best routes, specific couriers and even identify the most suitable mode of transport depending on your needs. They are knowledgeable and duly experienced at their work so will know how to handle technological, legal, social as well as political issues that may arise over the course of transportation.
Basically the freight forwarder handles the following activities:
- Consolidating and distributing shipment
- Processing necessary documentation
- Selecting the most suiting means of transportation
- Selecting the best routes for transportation
- Acts as the intermediary in customs processes
- Assumes control of parcels
- Arranges for cargo insurance
- Facilitates payments of parties involved
Within many companies, managers often find themselves overwhelmed with various areas of their business to manage all at once. From employees, finances, marketing strategies, contracts, customer expectations and more, often times inventory and supply chain management gets pushed aside and left at the bottom of the list. As a result, inefficiencies are left unfixed, and supply chain issues and logistics management is simply not tended to in the way it should be. After a period of time, business owners and managers realize their need for logistics assistance.
But typically, businesses are unsure of what exactly third party logistics management really is, what it entails, and how it can benefit the company’s bottom line. Throughout this blog post we will cover these common questions, and provide businesses with a better understanding of the overall benefits associated with third party logistics management. Continue reading