The supply chain, from manufacturing to warehousing and distribution, is one of the most multifaceted processes in the modern world. Through the multiple steps in the process, each involving their own industry players, a lot can go wrong while moving through the supply chain.
Because of this, shippers must implement and maintain foolproof risk-management and cost-mitigation plans.
Without them, they are leaving themselves open to skyrocketing logistics costs and failed deliveries.Here are a few supply risks that threaten to increase costs and decrease customer satisfaction:
Supply chain risk: late/failed deliveries
Because of the explosion in popularity of online retailers, consumers have grown accustomed to fast shipping, leading retailers to increase their shipping speed to keep customers coming back. This has lead to rushed deliveries that are widely susceptible errors that include shipments to the wrong address, missing items and other delivery failures.
When deliveries are missed, shippers must then allocate resources to rectify the problem as well as appease and often compensate their customers. To mitigate these risks, shippers can take the following measures:
- Engage with carriers to create more cost-effective routes
- Optimize warehouse layouts and loading/unloading procedures
- Implement more efficient picking plans
Supply chain risk: damaged/stolen cargo
There are over 700 confirmed cases of cargo theft in the US every year, costing shippers millions. Even more freight is lost due to damage while in transit. In order to mitigate the risks from damaged and stolen freight, shippers can:
- Review and optimize their packing procedures (especially for oversized and high-value freight)
- Conduct more thorough background checks on carriers
- Take advantage of LTL shipping
Supply chain risk: carrier obstacles
Weather, traffic and other carrier obstacles threaten to derail on-time deliveries every single day. While some obstacles are completely unavoidable, although rare, shippers can minimize these types of risks by:
- Implementing RFID tracking to stay updated on freight locations and reroute when necessary
- Plan alternate routes that carriers can take when obstacles appear
- Ship items as early as possible to account for unforeseen delays
Mitigate costs and risks with the right partner
Implementing new logistics procedures is a lofty task that takes time, money and many other resources, which is why many businesses rely on third-party logistics providers to help them keep costs low. When you partner with King Solutions, we will custom tailor a logistics plan that take into account your company’s specific budget, product and other needs.
We want to learn more about your business! Contact our team today to get a free quote on your custom logistics solution.