Logistics Tips for Small Businesses

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1 Logistics Tips for Small Businesses Gaining insights to reduce transportation costs while optimizing the supply chain. Learn the following: Logistics guidelines Supply chain process flow Leveraging technologies / collaboration Proactive supply chain planning Buying power Professional support Saving money by putting it all together

2 Introduction Every employee typically wears multiple hats at a small business, and that s no different for the person running logistics. Often that means learning the ins and outs of transportation on the job. Although transportation is often an afterthought to core business activities, thinking like a logistician can have a huge impact on company performance. This paper highlights key factors that can help anyone be better at logistics. Logistics Guidelines There are a few simple guidelines to understand in order to become an effective logistician. Supply chain management (SCM) can often appear to be very complex with many moving parts, but at its core, supply chain management, logistics and transportation all follow some very simple, general guidelines: Less is more when it comes to stops and shipment handling. More time, flexibility and visibility into future needs allow for better pricing. The more information, collaboration and modes available, the better. Bigger volume means bigger discounts. Transportation costs and government regulation will continue to rise. Availability of oil and truck drivers will continue to decrease. Transportation infrastructure will continue to decay. Get Started How to get started depends on how the business is organized. For a one-man shop, diving in headfirst is usually the only option. For larger organizations, assembling a team to keep track of all the moving parts can be helpful. The important thing is to take charge of understanding a few basic concepts and educate others in how to help the company become more efficient. Dive In First, understand the supply chain structure and plot it out visually. Consider all support organizations, vendors, clients, and anyone involved in the creation, movement or procurement of goods. Be sure to include: The company / organization Individual locations if there are multiple Suppliers (and maybe their suppliers) Partners Customers* Logistics providers (Carriers, brokers, etc.) 2

3 Value-added service providers Professional services / quality control providers Any other necessary third parties Start with your customers. This can be just a box saying customers, a few boxes representing the type of customers you have, or all of them if you only have a few. In short, you do not have to plot 500 of your customers. Next, add arrows to show each of the various groups interact with the flow, direction and movement of goods. This activity will help organize the information needed to make costing analysis and/or budgeting decisions. An example may look like this: Knowing how the supply chain flows is critical for determining lead time, cost savings and logistics improvements. Once this information is plotted, it s easy to share with the entire organization and gain insight into where flexibility may result in cost savings or greater customer satisfaction. Next, plot internal processes and include lead times. This will uncover what aspects can be improved, what s being done simply, because it s always been done that way, and what cannot be changed. An example of this process outline may look like this: 3

4 Leverage Technology Large corporations often rely on sophisticated Transportation Management Systems (TMS) to maximize logistical efficiency. Small businesses can achieve similar efficiency by collaborating with value chain partners, finding technology to automate certain processes, and sharing information with all members of the supply chain. By working as partners and sharing information electronically, organizations can optimize logistics through supply chain enhancements. In big business, collaboration strategies are known as vendor management inventory (VMI), efficient consumer response (ECR), spares asset management (SAM), or just in time (JIT). In small business it s called common sense. One such technology is found at OneMorePallet.com, a discount freight shipping site that lowers small business freight costs by filling unused truck space. By leveraging proprietary Pallocator technology, national carrier relationships, and industry expertise, OneMorePallet matches pallet shipments available space for 20 to 50 percent off already discount retail pricing. Be Flexible Finding flexibility in the supply chain is the first step to finding savings in freight - being proactive and strategic is key. Based on manufacturing and shipping schedules, identify when shipping will be needed and secure it in advance at a lower rate. Well-planned inbound shipments can also allow for savings. Understanding how the supply chain flows and open collaboration between value partners allows for the management of inbound shipping using Free On Board (FOB) shipping. Increase Buying Power Call it an economy of scale or call it buying power, but bigger volume means bigger savings. One of the simplest ways to increase buying power is to form an alliance such as a merchants association or a cooperative (co-op). The more shipping volume available across the co-op, the better the discount on shipping. Whether an official association or an informal alliance, partnering with other members of the supply chain creates exponential benefits. There are several resources to search for an existing local co-op, or maybe you determine one needs to be created: Chamber of commerce Economic development organizations Internet, social media, blogs and barter/trade boards Seek Professional Support Many suppliers employ full-time supply chain professionals so don t hesitate to ask them for help with business goals and challenges. Utilize consultants, advisors, and, if available in your area, a supply chain and/or operations professor at the local university. These professors are usually found in the business or engineering departments, and they can prove an invaluable resource in knowing the trends in the industry. Another option is to get involved in the local chapters of professional supply chain associations. Supply chain management and its logistics and transportation functions are becoming core areas for all value 4

5 chain partners. As a result, many professionals are looking to network, compare experiences, and assist others within the business community. A few organizations to seek out: APICS American Production and Inventory Control Society (www.apics.org) CSCMP Council of Supply Chain Management Professionals (www.cscmp.org) SME Society for Manufacturing Engineers (www.sme.org) WERC Warehousing Education and Resource Center (www.werc.org) Save Money Understanding how the supply chain and business operates opens the opportunity for small adjustments that can yield significant freight savings. Most importantly, those savings can be reinvested back into the business for additional employees, marketing, supplies, or equipment. Over time, new ways to collaborate with partners and maximize efficiencies will present themselves, and taking advantage of them will become second nature. In summary, by understanding your small business and its supply chain needs, you will be able to control more of your supply chain and in turn, your transportation spend. Download OneMorePallet s Freight Shipping Guide for Small Businesses for information on how to order, negotiate and save money on freight shipping. About OneMorePallet OneMorePallet is a discount freight shipping site that helps small businesses reduce shipping costs by filling unused truck space. Our Pallocator system instantly matches pallet shipment needs to excess available space at great rates with national, name-brand carriers. If delivery timing can be flexible, savings can be big up to 50% off already discounted retail prices. The online quoting and ordering process is fast, credit card payment is easy, and delivery service network is reliable. OneMorePallet enables small businesses to save money and time on freight shipping, regardless of their volume, and helps carriers fill their truckloads and operate more efficiently, resulting in improved profitability. Visit or call About Bluewater Consulting Bluewater Consulting is a boutique professional services firm focusing on complex matters of global companies, start-ups, and public sector organizations. Bluewater Consulting serves the supply chain management, technology (nanotech, infotech, biotech, and cleantech), materials science, new venture, and economic and community development sectors. Bluewater Consulting was founded in 2001 by Bill Johns who is also known as the Supply Chain Guy. For more information about Bluewater Consulting s supply chain practice, please visit or contact us at 877.BLUE.H2O ( ) or 2014 OneMorePallet 2014 Bluewater Consulting All Rights Reserved. March

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