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6 Unheard Tips to Optimize Reverse Logistics in Your Business

Reverse logistics is a logistical procedure that involves bringing a product back to the distribution site from the point of consumption, such as when a delivery attempt fails or when a product is returned to the store.


Reverse logistics has become increasingly more critical in operations in recent years as e-commerce sales have grown. Invesp conducted a survey that revealed that 30% of online purchases worldwide result in returns or exchanges. This can happen for various reasons, including the fact that the customer has never seen the goods in person before making a purchase and has different expectations regarding its appearance, size, or efficiency.

tips to optimize reverse logistics

6 Unheard Tips to Optimize Reverse Logistics in Your Business | Image source: Pexels

Any company that wishes to provide better service for exchanging or returning goods, or that wants to lower the proportion of goods that are returned following failed delivery attempts, must have a solid reverse logistics plan. As a result, it’s crucial to pay attention to several pointers that enhance the reverse logistics sector. When Is Reverse Logistics Used?

Since the e-commerce era has arrived, reverse logistics has gained even more significance. There are, however, a number of other factors that make it necessary. Here are a few instances:

Customer returns: This scenario mostly involves online transactions. The product is frequently not what the buyer expected when shopping online because the decision is made based on photographs, and for this reason, they ask for a return.

Unsuccessful deliveries: There are a number of reasons why a delivery may not take place, including an incorrect address or a customer who is not available to receive the product at the time. The sequence must therefore go back to where it started.

Driver returning damaged products or parts: If the customer or delivery person notices a damaged product during delivery, they must notify and return the damaged item.

B2B returns: Unsold goods may be delivered to distributors or distribution centers for resale.

How To Optimize Reverse Logistics?

Offer the following two types of reverse operations: The exchange or return process for a product must be simple for the customer. Offering the customer a variety of options for how this procedure will be carried out allows them to select the one that will work best for them. One alternative is for the customer to mail the item or for the carrier to pick it up, either for free or for an extra charge.

Invest in an exchange and return policy: The customer must be made aware of the company’s return policy and how it operates. It is crucial to be aware of all dates, the detailed instructions for returning the item, the deadline for refunds, and the requirements for exchange or return (such as the item being unused and in its original packing, etc.). By making everything clear, you may increase consumer confidence and negotiating security.

Inform the customer: It’s critical to keep customers updated on the status of their orders as they are being shipped and returned. Send regular information on the status of the purchase, delivery, and pickup. The consumer won’t have to get in touch with the business multiple times to raise questions or request further information if the procedure is transparent.

Analyze the financial effects: An effective reverse logistics plan lowers the company’s storage and transportation costs. In order to reduce delivery costs, it’s important to take into account things like the chosen delivery routes, frequency of collection, expected operating expenses, amount and weight of commodities, and the requirement for specialized vehicles. Finding the ideal delivery option for the business and its clients will be attainable in this manner.

Agility is key: The client has the chance to rate the business after the return procedure. The customer is more likely to give the store a positive review, tell others about it, and return to conduct business if the procedure is simple and swiftly addressed.

Delivery optimization tools: Using a transportation optimization tool might be crucial for helping with delivery and accelerating the process. It allows for the management of unsuccessful collection attempts, route calculations, and complete shipment tracking.

Customer Loyalty: The Importance of Positive Reverse Logistics

It is crucial to invest in a strong product return procedure because, in the event of a poor reverse logistics experience, it is normal for the client to be hesitant about returning to conduct business out of fear of experiencing the same problem again. According to the Invesp survey, 92% of consumers stated they would continue to shop in stores provided the return process was straightforward and 79% wanted it to not add to their costs.

A positive experience also ensures that the consumer will refer the business and its goods to others, enhancing the company’s reputation.

7 Crucial Tips for Efficient and Sustainable Logistics

7 tips for efficient and sustainable logistics

Image source: Pexels

Scaling your business’s success requires an effective logistics operation. This is a critical area for planning, carrying out, and monitoring the company’s actions as it is involved in the entire product supply cycle and directly related to the delivery of numerous services. Its effectiveness is shown in cost savings and improved customer service, giving the brand a competitive edge.

We present to you in this post the seven pillars that, in our opinion, are essential for a logistics operation to become more effective and sustainable since we have worked in the field of logistics for more than 25 years.

Read out our 7 Crucial Tips for Efficient and Sustainable Logistics below:

1. Enforce an Innovation-Oriented Culture

Without innovation, there can be no effective and long-lasting operation. Innovation is a choice, but it involves more than just coming up with fresh concepts that haven’t been put to use before. It can be a concept that has been explored before but hasn’t been applied to your company. Another error people make is believing that innovation just applies to products, but in fact, it also affects procedures and attitudes.

Strategic planning is the first step in innovation. It is founded on research, data gathering, and data interpretation that reduces implementation risks. When kicking off this process in your organization, conduct a thorough analysis to pinpoint the key issues—which are actually possibilities for growth.

“I found an issue.” This statement should be replaced by “I found a solution” in employees’ speech. This shows that the worker thought through potential solutions before bringing the concept to the team after identifying an issue and researching it.

A key responsibility of innovation-focused leadership is encouraging creative thinking among your team members. Additionally, this needs to be an ongoing habit because only consistency will enable the team to adopt this new behavior.

2. Employee Development

Consider making an investment in your workforce. The culture of innovation and ongoing efficiency won’t change if they aren’t engaged and dedicated.

Investing entails much more than professional development or monetary rewards: it entails day-to-day interactions, feedback, and, most importantly, team empowerment. Provide protagonism to all employees, regardless of rank. Everyone must feel free to constantly contribute ideas and improvements in this setting.

3. Charismatic Leadership

Invest in leaders who are charismatic and focused on others. The charismatic leader motivates team members, radiates assurance, and encourages them to take initiative. He inspires the group with his unconventional thinking and vision. The charismatic leader demonstrates empathy, confidence in others, and support for the group. He is the one who embraces diversity, alternative viewpoints, and unconventional methods of doing things. The positive cycle of the earlier-presented pillar of employee development will be sparked by charismatic leadership.

4. Pay Attention to the Needs of Customers and Suppliers

Customers have been the focus of many businesses’ process and product improvements in recent years. Other chain members, such as suppliers, may be overlooked while considering operational efficiency. The importance of suppliers in fostering an innovative culture should not be overlooked, similarly to how it is crucial to empower internal staff.

Establish a line of contact so that the supplier can report opportunities for improvements and solution ideas, invest in the quality of communication, and hold regular meetings with them. The chain’s originality is increased through encouraging creative thinking throughout.

7 tips for efficient and sustainable logistics

7 Crucial Tips for Efficient and Sustainable Logistics | Image source: Pexels

5. Keep Constant Updates on Market News

Although widely acknowledged as a good practice, it is not often followed. Although we must benchmark against the external market, we must also bear in mind that there are often excellent ideas “in-house,” among our suppliers and in our own departments. Find out what your company’s suppliers and other divisions have accomplished and what process improvements or technological innovations may be applied to your operation. Make an investment in the ongoing exchange of knowledge.

6. Investment in Technology

Investing in the productivity of the team involves automating manual chores. With the use of technology, workers can swap out their operational time for time to consider other ideas that would boost business productivity.

7. Creating Landmarks

Honor all successes, no matter how small. This activity instills a sense of belonging and recognition in those who are involved. The organization keeps track of the recollections of the complete journey taken to achieve each triumph by setting milestones and making them visible, which will serve as a catalyst for sustaining innovative thinking and the drive for new accomplishments.

Unlocking Customer Satisfaction: Is Your Fulfilment Strategy Aligned with Expectations?

fulfilment strategy

Unlocking Customer Satisfaction: Is Your Fulfilment Strategy Aligned with Expectations? | Image source: Pexels

According to our memory, the field of flexible fulfillment hit a tipping point around 15 years ago. At this point, a new age in the use of technology and fulfillment operations throughout an expanding supply chain network began.

Sending orders to a few drop shipping companies and distribution facilities was no longer sufficient. It was time to integrate the fulfillment network with the retail network, greatly boosting the potential for revenue generation and the sophistication necessary to do so.

Many retail CEOs have folded their arms throughout these years of change and said, “My store associates will never take the time to put a shirt in a box.” But in the end, the significant rise in revenue and margin increases proved to be simply too strong to ignore.

It is challenging to manage a successful and efficient fulfillment operation from retailers for a variety of reasons. Labor, inventory accuracy, and split shipping are a few examples. But in this post, we’ll focus on what is arguably the trickiest and most important topic of all: how to place inventory in the “Omni” consumer era across the entire network.

Prior to the “Omni” consumer, the majority of retail businesses ran two entirely different channels. Stores were planned, assigned, restocked, and conducted business with customers fully independently from the digital channel when it comes to inventory planning and optimization.

The digital channel generally included one or more specialized locations, which strangely were frequently organized and run like a separate physical location.

Imagine a portion of the demand that would have been met by the digital distribution center being brought into the supply chain and now manifesting up as demand in a physical location to understand the disruptive effect of the omni-consumer and the resulting ship-from-store programs.

When attempting to define what precisely falls under the category of a digital transaction, the situation becomes even more unclear. Visiting a nearby store to look at the merchandise but not making a purchase? Do considerable online research before choosing drive-thru pickup for quickness as opposed to delivering to your address.

In the end, “omni” consumer behavior across all channels necessitates operational excellence in two critical areas: first, much more sophisticated demand forecasting and inventory deployment strategies; and second, the capacity to continuously assess the condition of each stock unit in the network and adjust the order fulfillment algorithm’s decision-making accordingly.

Let’s start with inventory deployment and demand forecasts. We must comprehend the primary causes for which the majority of retailers have launched an in-store fulfillment program in order to comprehend why this procedure over the past ten years required a complete reinvention.

We like to divide these motives into two groups: those that are largely motivated by the retailer’s aim to fully and profitably monetize their owned inventory, and those motivated by the desire to provide customer service and convenience.

If we acknowledge that consumer behavior has changed over the past ten years, preferring that a portion of their online order fulfillment be carried out in a store near them — traditional BOPIS (Buy Online, Pick Up in Store) or drive-thru pickup — or delivered on the same day, then logically, demand that would have previously been met by a carrier delivering products from a shelf in a distribution center must now be met by store inventory and local labor in some way.

Another factor centered on the customer experience is the ambition to even ship ground service from stores to deliver more purchases within two work days.

The demand forecasting algorithm must now shift some of the digital demand away from the Distribution Center and toward specific stores due to the increased popularity of in-store pickup and ship-from-store (same-day and ground deliveries).

best fulfilment strategy

Unlocking Customer Satisfaction: Is Your Fulfilment Strategy Aligned with Expectations? | Image source: Pexels

The fulfillment algorithm of the order management system must decide which physical retailer to send an order from if the consumer now directs their digital demand to a particular one. In order to maximize sales while simultaneously lowering overall order fulfillment costs, inventory must now be moved from the distribution center to the storefronts.

We have only discussed the reasons why moving certain demand and supply farther up the supply chain, to stores rather than distribution hubs, is necessary to improve the customer experience so far. Now let’s examine the aspects of the retail business that make in-store shipment necessary.

The capacity to maximize gross margin across the network during the selling season is the most crucial element.

There will always be stock units at less-than-ideal locations throughout the season because no demand forecasting method can foresee the future with absolute accuracy. The best solution to the “problem items” challenge is to link digital demand to retail inventory.

Why? As a result, the local supply/demand matching issue (i.e., local demand meeting shop inventory) becomes a more global issue (i.e., the network as a whole, encompassing all stores, driving digital demand).

In addition to allowing markdown items to be sold at a higher price, connecting both requests greatly lowers the possibility that an item will be offered at a discount.

Avoiding markdowns is a crucial component that is currently the least practiced in the retail industry. This tactic necessitates constant communication—one might even argue unification—between order fulfillment and inventory optimization algorithms, which route orders 24 hours a day.

When it comes time to route the next order, the order management system algorithm goes beyond the most basic factors (stock availability, transportation costs, availability, labor cost, delivery time, etc.) and takes into account the current health—or difficulty level—of each unit for fulfillment. This is made possible by the effective coordination between these two AI-based processes.

One can, for instance, do this to avoid a future markdown that would really end up costing the retailer much more in absolute terms by trading a little bit more shipping or delivery time.

The initial inventory planning process, the inventory health management process throughout the selling season, and the digital demand fulfillment optimization process must all be integrated for inventory management in the era of omni-consumers.

The potential to capture as many sales as possible that require omni fulfillment (BOPIS, same day, ship from store) while lowering operating expenses and boosting gross profit on each transaction is increased by this unification, during the inventory’s lifetime.

Revolutionizing Global Supply Chain: The Power of Flexible Technologies

the global supply chain

Revolutionizing Global Supply Chain: The Power of Flexible Technologies | Image source: Pixabay

When it comes to the acquisition, sale, or transit of goods, inputs, and services between countries, businesses, and professionals that use software, strategies, processes, and best practices in international logistics continue to face challenges. Such constraints date back to the Covid-19 epidemic and are still present today due to political turmoil and the wars in Ukraine and Russia, which still involve the US and China.

Many businesses seek to diversify their suppliers of goods, inputs, and services as well as their partners who assist in changing processes, procedures, and all business-related technology for these and other reasons. As a result, businesses in nation A that previously purchased goods from nation B now have to find new suppliers and begin importing goods from nation C, a process that experts have already termed as “reglobalization.”

In light of this, the phrase “global supply chain” is associated with this reglobalization.

What Effect Does the Global Supply Chain Have on the COMEX?

Many organizations, enterprises, and professionals seek beyond their own companies. To prevent disruptions and delays in their own enterprises, they also keep an eye on the operations, procedures, and technologies of their suppliers, clients, and other business partners. The Global Supply Chain is a network of best global logistics practices, software, strategies, and governance norms that connect everything and everyone.

According to a report recently released by Bloomberg, the USA set a record for exports and imports last year, reaching an astounding 73 countries that received exports from North America and imports from 90 nations, totaling US$ 690.6 billion. This gives you an idea of how the Global Supply Chain is one of the cogs that move the world.

Another significant piece of information comes from the Danish shipping giant Maersk, which is known as the “thermometer of global trade” and is in charge of carrying roughly 16% of all containers worldwide. According to the company, sluggish economic development would cause a 2.5% reduction in global container transport volumes in 2023. Because of this, what was once above-average consumption is now sharply changing, and as a result, is considering a restructuring to link and integrate its land, sea, and air activities.

The renowned shipping firm has already begun to implement some steps, such as downsizing ships, increasing air freight services, and creating a network of scattered facilities, to help it manage cargo flows. This entire rearranging of the game pieces supports the concept of reglobalization.

The Influence of Flexible Technologies on Reglobalization in the Global Supply Chain

Some people perceive issues, while others see opportunities. Because the reality is that the current situation provides a fantastic road map for reinvention, this adage from the business world is more true than ever. Determining whether professionals are performing their tasks correctly is one of the major obstacles in the global supply chain, rather than understanding what they should be doing.

In addition to this difficulty, the situation becomes even more complicated when you consider that firms involved in the global supply chain tend to encounter greater volatility in the coming years, causing organizations and leaders to constantly reinvent themselves. It’s crucial to invest quickly and strategically, focusing primarily on technologies and business processes that can adapt to the rise and fall of “global business waves”.

Last but not least, companies that want or need to be in line with this new future essentially need to concentrate on four areas of innovation: commercial; achieving sustainable results; real-time decision-making; and the focus on people.

But how should one go about doing this? Understanding experts, customers, suppliers, and business partners, as well as what expectations to explore to deliver competitive advantages, are among the top priorities for the exclusive innovation plan for the upcoming years. Modern software does not need the infamous and expensive adjustments that are required for businesses that use “each new wave of business” in the global supply chain, making artificial intelligence a powerful companion. Otherwise, investments in these solutions will not lead to significant reglobalization of business.

Reverse Logistics: How to Reduce The Number of Returns

how to minimize returns

Image source: Pexels | Reverse Logistics: How to Reduce The Number of Returns

The sale cycle does not finish with the delivery of the product; instead, a new procedure known as Reverse Logistics can begin at that point.

Learn more about Reverse Logistics in this article, including its causes, and suggestions for reducing the number of returns.

What is Reverse Logistics and how does it differ from normal logistics?

The entire process of having products returned is referred to as reverse logistics, as the name suggests. In other words, reverse transport actions, where a product is picked up from the consumer, put back into stock, and then replaced with a new one.

Companies want their items to reach customers without any hurdles, and traditional logistics helps them do this by creating effective activity flows from sale through delivery with a focus on low risk, high efficiency, and satisfaction.

When it comes to reverse logistics, the majority of issues arise precisely because businesses are unprepared and solely consider traditional logistics; after all, nobody anticipates that an order will ever be returned.

Therefore, the primary challenge in this situation is the lack of predictability.

When you don’t plan for all the possible outcomes in the deal, there are details that go overlooked or are not anticipated, which can be a nuisance.

It’s important to acknowledge the following key aspects of reverse logistics:

  • team response time when the return is initiated;
  • collection costs;
  • availability of replacement goods

Errors that cause product returns

Returns are common and inevitable, but your company must work to reduce the risk when it occurs.

The four most typical mistakes that result in product returns are listed below:

Problems with the Product’s Quality

The majority of returns are due to faulty or unfulfilled promises made by the goods. The batch maturity and expiration dates are additional points.


Certain goods only function in certain seasons, after which they are returned because they are no longer needed.

Delivery damage

The product may be impacted by traditional logistics, which might result in breakage, scratches, dents, and other types of damage. This process is significantly more likely to go wrong when it is carried out by small businesses.

Errors made when selling

One of the key causes of reverse logistics is given below. Sales operations including the manual entry of orders by RCAs are usual in businesses; they are a routine component of the process, and both the business and the seller are accustomed to it. However, this activity is stressful, repetitious, and demands a lot of concentration from the seller. Typos in item details are very common to make. The impact can be significantly worse if the order is large and contains several pages.

As we previously stated, it is crucial for businesses to establish two main points.

Preparing to prevent order returns. While many contributing factors are unforeseen, others can be readily avoided.

Prepare for Reverse Logistics when it occurs.  The damage is worse when there is no planning. Without a strategy, moving the team, the inventory, and the logistics indicates additional expenses.

How to reduce costs with Reverse Logistics

a man handling shipping boxes

Image source: Pixabay | Reverse Logistics: How to Reduce The Number of Returns

Reverse logistics is a process that the distributor wholesaler cannot avoid, but it is vital to plan for it.

Know all the expenses associated with operations: trace the source of each cost, paying particular attention to those involving logistics and operating time for return procedures. Knowing the expenses associated with each stage, including both direct and indirect costs, is essential.

Plan for Alternative Returns: It’s crucial to be prepared for a variety of scenarios, so don’t just have a plan A when it comes to product returns. Any action conducted without adequate planning involves additional expenses and the use of more expensive services.

Have trustworthy third parties and suppliers: If your business does not handle every step of the process, it is crucial to have trustworthy suppliers who, more than anything else, are familiar with your product and the terms under which it must be delivered to the customer.

Utilize technology in tasks that can be automated, such as customer service: Create procedures and business rules to make it easier for users to interact with the system, resulting in reports that shorten the time it takes to process requests and hasten the start of operations. Technology has significantly lowered the cost of this process and helped establish standards.

These are some steps that can be performed to lessen the effects of reverse logistics, nevertheless, measures can still be made to decrease the likelihood of returned items.

The secret is in the use of technology in Order Management

The practice of the seller manually entering orders is still widespread among distributors. Companies intentionally disregard the risks associated with this procedure, which is undoubtedly the biggest cause of returns and losses.

Technology is available for automating the input of orders that are issued in PDF format, meaning that in just a few mouse clicks, every item can be added to the system, without taking the seller’s time, reducing to minutes an operation that used to take days, along with eliminating all typing errors and subsequently putting an end to the return of products that happened as a result.

Since technology has automated this process, the salesperson can now concentrate solely on making more sales while the logistics crew spends less time creating orders.

As we mentioned earlier in this article, Reverse Logistics is a common process within businesses, particularly wholesale distributors. It is important to understand that there are actions that can and should be taken to reduce product returns while also preparing professionally for this operation.

Want to know how to get rid of mistakes in orders that were manually entered? Talk to us today to stop this operation’s losses!

8 Best Practices for Efficient Inventory Management

best practices for inventory management

8 Best Practices for Efficient Inventory Management | Image source: Pexels

Maintaining control over the inventory of items is crucial to ensuring a healthy sales volume and, consequently, reducing operating costs. But despite its significance for the outcomes, managers don’t always give it the attention it deserves.

In light of this, we will discuss the 8 best practices for efficient inventory management in the following subjects so as not to harm your company. Continue reading to learn more!

1. Keep track of entries and exits

One of the most important inventory management mistakes a company can make is failing to properly record inputs and outputs. You never have a precise count of the items that are available since you have no control over anything that goes in and out.

It also makes it more difficult to keep track of when things need to be replaced, raising the possibility of shortages or surpluses. Make a note of every movement you make to avoid these issues.

In this instance, it is also important to keep in mind the significance of regulating inputs and outputs that are related to the exchange and return procedures in order to ensure total accuracy in the monitoring.

2. Keep a check on product turnover

The amount of time each item is kept in stock before it needs to be renewed is known as material turnover. We refer to an item as having a high turnover when there are numerous deliveries each week due to the high output volume.

Monitoring this indicator is essential to determine when to contact the supplier in order to avoid supply shortages.

Low turnover items, on the other hand, show that those things are not sold, therefore it is best to avoid buying them, spread out purchases over time, or buy them in lesser quantities.

But for this task, keeping track of inputs, outputs, and the number of days until output is crucial.

3. Don’t allow too much or too little stock

Lack of control over product movements causes shortages and an excessive amount of inventory. This happens when turnover and item quantities are not monitored, which leaves the purchasing sector in the dark about what needs to be done in terms of acquisitions.

These faults affect the company’s financial performance since they raise expenses, increase the likelihood of losses and waste, and undermine sales when there is a shortage of products but a high demand.

The rate of shortages and excesses is ultimately significantly reduced by finding solutions to the issues of managing inputs and outputs and the rotation of materials.

Read also: Everything You Need to Know About Inventory Management

4. Take inventory of materials

The material inventory entails counting the things that are on hand and comparing the quantities on hand with the data recorded in the utilized controls.

The database is continuously updated using this manner. This lowers the possibility of stock holes and raises the quality of the information provided to the buying sector.

The optimal way to ensure that the physical inventory x accounting inventory balance is as precise as possible is to consider groups of items at a time when you do this balance, leaving the general inventory to be completed annually or as frequently as the manager considers necessary.

5. Have a database of standardized items

Errors and duplicate entries are possible because there is no standard for the registration of materials.

When doing this, the seller runs the danger of losing control over the stock and being unable to determine if the product “x” is actually out of stock or if it has just been recorded in another manner.

In addition to utilizing one code and description for each type of item, this issue has to be resolved by defining a common method for code and description creation.

6. Integrate the stock sector with other areas

As you can see, inventory data is essential for the efficient operation of both purchasing and sales. One of the biggest faults in inventory management is not investing in information sharing and neglecting to combine these areas.

Sharing information and maintaining open lines of communication is the best way to avoid this issue and guarantee effective inventory management. Additionally, most businesses are hesitant to spend money on an integrated inventory management system that streamlines data sharing and automates these processes.

7. Do not manage inventory manually

It is of the utmost importance to invest in technology due to the volume of data generated during a stock routine and the requirement to monitor and control information.

Therefore, permitting operations to be carried out manually raises the possibility of errors, jeopardizes productivity, and reduces the security and dependability of information.

Adopting an inventory management system has several benefits, including reducing costs, allowing staff to play a more strategic role rather than a solely operational one, and facilitating decision-making.

8. Organize your stock

It is not a good idea to leave tumultuous goods in one sector with no room for its staff to move around as this causes the sector to suffer significant losses in addition to being an obvious indicator of disorder.

Here are some extra pointers to prevent stock losses:

  • Ensure that there is space in the inventory for staff to move around;
  • Sort items by department;
  • Maintain a tidy and clean inventory;
  • Put up signs in each section to understand where to find each product;
  • Keep the area open;
  • Take precautions to avoid the appearance of mice or insects.

Lastly, in order to maintain the optimal size of your stock, it is important to specify the maximum and minimum stock of each product. Despite the fact that we are aware of how complex this action is, we can make it more efficient and pleasant by using the right tool.

Everything You Need to Know About Inventory Management

what is inventory management

Everything You Need to Know About Inventory Management | Image source: Pexels

Inventory management is a crucial investment for businesses that want to increase productivity, cut expenses, and deliver top-notch customer service.

Understanding needs and making the best decisions for the company’s performance are made possible by effective product management.

Following that, we’ll define inventory and go over its different types and management methods.

What is Inventory Management?

The procedure that makes it possible to plan, carry out, and regulate the resources kept on hand by a business is known as inventory management.

The following decisions are made during these processes:

What to supply?
How much to supply?
And when to supply?

3 main goals of inventory control are as follows:

  1. Increase service quality or the ability to meet demand by keeping inventory on hand.
  2. Reduce total inventory costs by increasing turnover or by lowering expenditures and investments.
  3. Reduce expenses while increasing the operational effectiveness of supply processes.

It should be noted that these goals are in opposition to one another, which means that if one is improved, the performance of the others may suffer.

The definition of inventory management, however, is the skill of managing these conflicting aims, directing strategies, and appropriately prioritizing objectives in the face of this scenario.

Why is good inventory management important for your company?

When done correctly, inventory management shows how much you’ve lost due to ineffective product control. If you’re still unsure as to why your business has to engage in inventory management, we’ll explain its significance in the points below:

  1. Maintains productive tasks in motion;
  2. Increases client happiness when they discover the goods on the shelf;
  3. It is directly related to the business’s financial performance;
  4. It serves as a key competitive edge.

Now that you are aware of the significance of this activity inside an organization, it is critical to grasp all of its variations and which one your company falls under. Discover which sort of stock best suits the timing and structure of your firm by reading about the various varieties below.

What are the main types of stock?

Anticipation Inventory

It is a form of inventory that a company keeps on hand as a preventative step to make sure there are enough products on board to fulfill potential demand.

When a rise in demand is anticipated or when there is a question mark over the availability of raw materials or finished goods in the future, this inventory is typically retained.

Consigned Stock

Consignment inventory is a business strategy where a manufacturer or supplier distributes their goods to a retailer or reseller who sells them in their enterprise or store but has not yet made a purchase.

Instead, the retailer pays the manufacturer or supplier on a consignment basis only for the goods that are actually sold.

With this strategy, the shop may maintain a wide range of products in stock without having to make significant upfront purchases.

The supplier or manufacturer, on the other hand, gets an additional sales channel for their goods without having to assume the financial risk of maintaining a sizable inventory.

Cycle stock

Businesses that sell products with sales cycles use it. Since the corporation must keep stocks vigilant to prevent losses, it is one of the most challenging forms of inventory to handle.

With cycle inventory, a company may efficiently satisfy consumer demand without running out of products when demand is strong or having extra inventory when demand is low. This might be particularly crucial in sectors like the retail business where demand is highly unpredictable or seasonal.

Inactive stock

Inventory that has not been sold or used for a long time is referred to as inactive inventory. This may happen when a product is rendered obsolete, no longer desired by consumers, or when demand for a specific product has sharply declined.

Inactive inventories are a common source of trouble for businesses since they need storage space and money that could be used to purchase other goods with higher demand.

These inventories may also become out of date or expire, which could cause the business to lose money.


When a consumer puts an order, the retailer buys the product from a third party – usually a wholesaler or manufacturer – who then distributes the product directly to the end customer. This business model is known as dropshipping.

The supplier manages every aspect of the process, so the retailer need not worry about product storage, management, or shipment.

Dropshipping enables retailers to sell a wide range of goods without needing to make significant inventory investments.

everything you need to know about inventory management

Everything You Need to Know About Inventory Management | Image source: Pexels

Safety stock

The quantity of extra inventory kept in addition to regular inventory to fulfill unforeseen demand or changes in market demand is referred to as protective stock, also known as safety stock.

Buffer stock is used to guarantee that there are adequate products on hand to fulfill client orders and to prevent supply chain disruptions.

Based on the demand’s cyclical nature and the time needed to refill the stock, the protective stock is determined. Depending on the type of product, the predictability of demand, and the accessibility of suppliers, a different amount of protective stock may be necessary.

Contingency stock

In order to deal with unanticipated occurrences that can impact the supply chain, the supplementary stock is kept in addition to normal stock and protective stock.

These occurrences could include strikes, natural catastrophes, delays in raw material supplies, production interruptions, or other unforeseen circumstances that could have an impact on product supply.

Contingency stock, as opposed to protective stock, which is intended to handle typical variations in demand, is kept in expectation of events that could impair the company’s capacity to complete customer orders.

What are the main methods of inventory management?

Inventory management tools are available on the market, and they make up a crucial part of management control. Therefore, we shall discuss the six methods used in the market in this context.

Specific cost or specific price method

Each unit of inventory is given a value using this procedure. It is therefore only applied in situations when it is possible to calculate the price or cost of each item. The remaining steps involve adding everything up to determine the stock’s final worth.

Due to the high stock movement, it is not a recommended strategy for retail. Just imagining it makes you exhausted, having to price one item at a time.

ABC curve

Using the ABC curve, inventory items are divided into three groups according to their monetary value or significance to the company.

Inventory items falling under Category A tend to be more valuable or significant, making up typically 20% of total inventory but 80% of its worth.

The products in Category B, which account for about 30% of the inventory’s total items and 15% of its worth, are intermediate items.

The remaining goods, which make up around 50% of the stock items and amount to about 5% of the stock’s overall worth, fall under category C.

The ABC curve is beneficial to businesses because it enables them to concentrate their inventory management efforts on the most significant or valuable products, ensuring that these things are always available and reducing the risk of production or operational interruptions.


PEPS stands for the “First In, First Out” methodology, which suggests that older things should be used or sold before more recent ones.

In this method, older stock products won’t go out of date or expire, which could result in a loss for the business.

One strategy for regulating the output of stock items and preserving the accuracy of the business’s accounting data is the PEPS methodology.

Average cost

The average cost can also be referred to as the average price or weighted moving average, which means that a new cost average is calculated for every new transaction.

In this method, the value of the recently purchased items is added to the previously purchased ones to determine the ultimate price of the sold goods.

It is also possible to fix the average price. If this approach is used, the permanent inventory should have a single average applied to it, and interim sales should not be taken into account.

This concludes our post on everything you need to know about inventory management. We hope we managed to educate you further on the subject of Inventory Management and that you gained knowledge and insights that you can apply to your company’s operations.

Greening the Supply Chain: Top Sustainable Warehousing and Distribution Practices

sustainable warehouse practices

Greening the Supply Chain: Top Sustainable Warehousing and Distribution Practices | Image source: Pexels

Any firm needs logistics to make sure that products are delivered to clients successfully and efficiently. However, have you ever given any thought to how these processes can affect the environment? What if we told you that these activities might be carried out sustainably, lessening their negative effects on the environment while also increasing their effectiveness?

We’ll talk about sustainable logistics for warehousing and distribution in this article. We will learn about warehousing and distribution logistics, the significance of sustainability in this field, the sustainable practices that may be used, the advantages of these practices, the difficulties in using them, and successful implementation examples. We’ll also go through how you may apply these strategies within your own business.

Read also: Main Challenges in Same-Day Delivery: Use Technology As Your Ally

The Importance of Sustainability in Logistics

In all facets of business, sustainability has grown in importance, and logistics is no different. By using sustainable practices in logistics, businesses can cut costs, increase productivity, lessen their impact on the environment, and boost their reputation. Additionally, a lot of people are becoming more environmentally conscious and favor businesses that use sustainable techniques.

Sustainable Practices in Warehousing Logistics

Waste Reduction

Cutting down on waste is one of the most important sustainable storage logistics practices. This can be accomplished by putting in place an efficient waste management system that incorporates trash reduction, reuse, and recycling.

Efficient Use of Energy

The effective use of energy is a key sustainable activity. Energy-saving technologies, like energy management systems and LED lighting, can be used to accomplish this.

Sustainable Packaging Materials

Another crucial sustainable practice is the use of environmentally friendly packing materials. This includes using packaging made of materials that are biodegradable or recyclable.

Sustainable Practices in Distribution Logistics

Smart Routing

Distribution logistics can use intelligent routing as a sustainable strategy. It entails organizing delivery routes to reduce travel time and, as a result, the emission of polluting gases. Smart routing could additionally assist to cut down on fuel expenses.

Low Emission Vehicles

Another significant sustainable practice in distribution logistics is the use of low-emission automobiles. This can entail driving electric or hybrid vehicles, which are less harmful to the environment than typical automobiles.

Driver Training

Logistics for distribution can be more sustainably conducted if drivers are trained in effective driving techniques. Driving efficiently can lead to lower fuel usage and lower pollutant gas emissions.

How to Implement Sustainable Practices in Your Company’s Logistics

Here are some suggestions if you’re considering integrating sustainable practices into your company’s logistics:

1. Begin with a plan: Create an action plan and identify areas where you can adopt sustainable practices. Goals that are specific and measurable should be included in this plan, along with an execution schedule.

2. Invest in staff training: Ensure that they are aware of the value of sustainability and how to put sustainable practices into effect. This could include formal training, workshops, or brainstorming sessions for coming up with ideas.

3. Track progress: To track progress and make necessary modifications, use performance indicators. This can include metrics like the quantity of waste produced, the amount of energy used, or the amount of carbon emissions.

4. Seek outside help: If you’re unsure of how to put sustainable practices into place, think about hiring a sustainability consultant or specialist. They can offer insightful direction and counsel.

5. Communicate with stakeholders: Let them know what you’re doing to promote sustainability. This can include coworkers, clients, suppliers, and others in the community.

Frequently asked questions concerning logistics sustainability

What is warehousing and distribution logistics?

Logistics for warehousing and distribution are a vital part of any company’s supply chain. It entails keeping goods in good condition and getting them to customers quickly.

Why is sustainability important in logistics?

Using sustainable practices for warehousing and distribution logistics can have a number of advantages. Sustainability in logistics is important because these procedures can lessen their negative effects on the environment while simultaneously lowering costs, enhancing operational effectiveness, and raising satisfaction with customers.

What are the challenges in implementing sustainable practices in logistics?

Although using sustainable practices in logistics has numerous advantages, there are obstacles to overcome in order to put them into effect. These may include the up-front cost of implementation, reluctance to change, and a lack of sustainability expertise or understanding. These obstacles, however, can be surpassed with proper planning and commitment.

How can I implement sustainable practices in my company’s logistics?

By beginning with a plan, spending money on training, keeping track of results, seeking outside assistance, and talking to stakeholders, you can implement sustainable practices into your company’s operations.

Main Challenges in Same-Day Delivery: Use Technology As Your Ally

Same-Day Delivery Main Challenges

Main Challenges in Same-Day Delivery: Use Technology As Your Ally | Image source: Pexels

In recent years, the emergence of same-day delivery super applications has helped to create a new consuming habit. Customers have grown accustomed to the ease of ordering food or doing their grocery shopping in just a few clicks as a result.

Additionally, the pandemic’s dramatic rise in online shopping forced businesses in a variety of industries to accept the challenge of delivering their goods at the same speed as food.

The truth is that shoppers are increasingly expressing a desire for agility. 73% of consumers now expect businesses to have same-day delivery choices. 56% of respondents to another Capterra survey said they would not purchase products from companies that offer high freight and prolonged delivery periods.

Many organizations are operating hastily and without ensuring the optimization of their resources in an effort to compete in this race for faster and less expensive delivery. Through this method, businesses are even able to speed up the time it takes for their items to reach customers, but at great financial risk.

This new approach offers opportunities and difficulties for logistics operations. There are many bottlenecks to clear, so leaders must be strategic in their use of technology to accomplish their objectives if they are to compete in the new environment.

The good news is that it is possible to innovate in same-day delivery operations while still ensuring that the customer is satisfied and that the processes are efficient. The challenges must first be analyzed for this in order to determine how to overcome them.

Read also: The Role of Robotic Process Automation (RPA) in Supply Chain Management


What Are the Main Challenges in Same-Day Delivery?

Bottlenecks in processes lead to ineffective operations, low productivity, and, ultimately, lower earnings. Losses might be much greater when it comes to same-day delivery because many operations wind up putting cost optimization aside on purpose in order to achieve the agility that customers need. Therefore, it is important to be aware of various challenges that could jeopardize operational outcomes and customer satisfaction:

Lack of scalability: In order to provide express deliveries, it is necessary to retain the product inventory relatively close to the region covered, or to develop scale power. This indicates that businesses typically need to invest in a number of distribution centers or dark stores. Since these operations must cooperate and ensure the uniformity of services, it is crucial to implement scalable processes and tools that can be duplicated in the numerous branches.

Inefficient routing and dispatch: Routing and dispatching for same-day delivery must be completed quickly, which is almost impossible with manual methods. This is due to the fact that the period of time between the creation of an order and its delivery is much shorter than in a normal logistics operation, which plans a route for the following day. Therefore, task automation investment is crucial for improving the agility and efficiency of logistics processes.

Lack of flexibility for route adjustments: In this operating model, a new service must be added to the route of the nearest courier whenever a new order is received. Without a tool that can alter already-started routes, this process is almost difficult to complete manually.

High operating costs: Routes that are not optimized, improper courier management, inefficient vehicle use, and mishaps that are not handled properly. All of this could increase operating costs and harm the business’s performance.


Why Invest in Technology for Same-Day Delivery?

In order to boost output, cut costs, and increase efficiency in logistics, manual procedures must be automated. Processes are carried out more swiftly and precisely using automation, and the likelihood of errors is decreased. As a result, organizations are able to complete more orders in less time, freeing up human labor for analytics and other, more crucial tasks.

Additionally, cloud storage is a key component of modern technologies, particularly SaaS (Software as a Service), which enables data access from any location at any time on any device. In a nutshell, the operation data is safer on the cloud.

Another benefit is that the majority of industry-standard tools support system integration, allowing information to be shared between several platforms. By doing so, redundant data may be removed, work processes can be made more effective, and expenses can be decreased. Because of this, technology can be a fantastic ally for businesses, streamlining procedures and freeing up labor for tasks that need manual labor.

The Role of Robotic Process Automation (RPA) in Supply Chain Management

The Role of Robotic Process Automation in Supply Chain Management

The Role of Robotic Process Automation (RPA) in Supply Chain Management | Image source:

Through the use of technologies like Machine Learning and Artificial Intelligence, robotic process automation (RPA) applications let you do operations for a set amount of time using software solutions or bots stored on servers.

They are intelligent agents that can learn to develop highly particular jobs and then repeat them, removing the chance of human failure and error and lowering operating expenses.

Routine and repetitive operations that were previously carried out manually can now be carried out automatically by software or a robot thanks to RPA resources.

As a matter of fact, the usage of these technologies has spread to a number of organizational areas, including the field of logistics, giving them a highly relevant significance in the supply chain.

According to a Gartner report, 85% of businesses are predicted to have some form of RPA solution in place by the end of 2022. As a result, we can claim that this tool has evolved into a potent strategic asset.

Would you like to learn more about the application of RPA in the supply chain?

Read this article all the way through to uncover many fascinating details about this subject.

What is the impact of Robotic Process Automation (RPA) on the supply chain?

In terms of how RPA helps improve the agility and quality of supply chain processes, the tool makes it possible to manage invoicing more effectively by automating actions like sending purchase orders and downloading and uploading documents and receipts.

The establishment of inventory management procedures is also aided by RPA, which enables automatic reports to be prepared with information on product supply and availability, raising the level of satisfaction among suppliers, employees, and customers.

Additionally, this kind of resource enables the industry to be alerted when product inventory levels fall below the required minimum, maintaining the capacity to meet demand.

7 benefits of Robotic Process Automation (RPA) in the supply chain

As you can see, innovations in technology have had a significant impact on logistics management. These advancements optimize operational efficiency by speeding up the development of activities and procedures and lowering the costs associated with these tasks, which is reflected in increased productivity and, as a result, in the profitability of the company.

The competitiveness of the supply chain industry is closely correlated with the efficiency and accuracy of logistical procedures, beginning with planning.

Planning the supply chain management used to be difficult, especially when it came to predicting product demand because the staff in charge of this duty had to manually calculate and generate estimates during unending meetings.

This circumstance is no longer an issue, and the execution of these points is considerably quicker, and more effective as a result of RPA!

Programs that centrally manage the data now automatically acquire and analyze data relating to consumption patterns, orders, and supplies.

Despite being a key distinction, RPA also offers a number of highly intriguing advantages, including:

1. Cutting supply-chain expenses

One of the key benefits of employing this resource is the gradual decline in the frequency of mistakes made during the processes, which leads to a considerable decrease in rework and, simultaneously, in the expenses associated with this waste.

2. Flexibility and simplicity

Any professional can utilize this type of technology to its fullest extent because it does not require special IT knowledge, such as an understanding of codes or programming languages.

Since it is easy to assign a robot to carry out a tedious or repetitive operation, RPA solutions significantly increase the flexibility of the transfer of logistical activities.

3. Accuracy in defining and analyzing metrics

Data on the supply chain may be easily accessed thanks to the storage of the tasks carried out by the robots. With this simplicity, RPA optimizes search, analysis, and decision-making by making it easy to find information as soon as it is required.

4. More productivity

The robotic automation of processes is raising the level of performance of modern businesses because it minimizes the use of resources in the various links of the chain, enhances workflow, and reduces response time while always maintaining quality.

5. More attention to the core business

Regarding the delegation of supplementary tasks, which inadvertently jeopardizes the productivity of work teams, the automation of tasks is also highly valued.

By implementing RPA innovations, managers and their staff can focus their attention on adhering to procedures and business-related operations. As a result, the performance and outcomes fundamental to the core business have significantly improved.

In a nutshell, the time saved by automation can be used to carry out more crucial tasks that will help the company’s profitability.

6. Supply and demand planning

The robots automatically examine past sales data and market indicators in accordance with a predetermined set of rules to then estimate supply and demand.

The quantity of inputs required to expand the business’s operations and maintain a sufficient safety stock can be ensured in this way.

#7 Follow up after product delivery

RPA technology enables the monitoring of delivery progress, notice of departure from the warehouse and arrival at the destination, alerting of potential inconveniences, and automatic messaging production of an electronic delivery document.

As you can see, implementing an excellent RPA solution in the supply chain can lead to excellent outcomes in terms of both productivity and finances.

Contact our consultants to see how we can assist you in achieving this objective if you like our piece of writing and are now considering using a resource of this kind in your business.

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