How to Improve the Logistics of Small, Medium-Sized Businesses (SMBs)

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When you’re running a small business, you might focus a lot on things like sales, marketing, and cash flow, but it’s easy to forget about logistics.

Logistics is an umbrella term that describes everything that keeps your business running smoothly. 

If you don’t focus on your logistics, it’s easy for things to slow down, including your production chain or deliveries.

This will impact your costs, as well as customer satisfaction.

With this in mind, here are a few ways to improve your logistics system to keep your small business going without any issues.

Suppliers and Storage

Most businesses, especially if you’re producing products to then sell to customers, include a production and supply chain.

This starts with your vendors or suppliers. 

As a general rule, the more local your suppliers are, the better. You might be able to get much better prices from a supplier that’s further away from your warehouses and production facilities, but you need to factor in the financial and time costs associated with shipping the supplies.

The further you have to travel, the more of a likelihood that there will be issues or complications like vehicle breakdowns or delays. This can, in turn, cause further delays later down the road, so your production chain isn’t as efficient as it should be. Then you also have to think about the cost of running and fueling the vehicles to deliver these supplies in the first place.

There’s also the fact that, a lot of the time, customers prefer local products. If you can say that something is locally made, it can add to your marketing and branding strategies.

Of course, sometimes you can save so much on a further supplier that it’s worth the shipping costs and the reduced efficiency.

But you do need to weigh these things out before you make deals with vendors, and don’t forget to haggle for better prices.

Using AI for Automation

Logistics can be incredibly complicated to manage and there are a lot of opportunities for errors and mistakes to creep in.

The problem with a supply chain is that a small problem can easily snowball into a much bigger problem, leading to bottlenecks and other issues.

One way to save time and money is to look for ways to introduce AI tools. AI can work very well for automation, allowing repetitive tasks to be completed quickly and accurately. This means that you can use your workforce more efficiently, while you know that data entry tasks and other jobs that don’t require a lot of imagination can be sorted.

Of course, AI is only as good as the operator using it.

So, when using AI in your business, whether for automated tasks or other things, make sure that it’s being used correctly and that there is always a human providing a measure of oversight and quality control.

Outsourcing Logistics

Another way to make sure that your supply chain is always handled properly is to delegate it to a professional.

As a small or medium-sized business, you might not have the resources to run a dedicated logistics team, and it probably wouldn’t be necessary either. However, your logistics might be complicated enough that it’s too much to handle yourself, especially when you’re also doing other things with your business.

In this case, outsourcing to a logistics company might be ideal for your business.

When you outsource, you essentially pay to access more significant resources as and when you need them. So, when outsourcing to a logistics specialist, they can set up a system that will work and then monitor it, without needing to have a full-time job only managing the logistics of your small business.

Managing Your Fleet

One of the most important parts of a logistics and supply chain system is the fleet.

A fleet can take up a number of shapes and sizes, ranging from a few company cars that service providers use to get around and see customers, to trucks, ships, and even planes that ship supplies and goods across the country.

No matter what kind of fleet your company needs, you need to look after it.

Poor maintenance reflects badly on your company, as the vehicles are seen as an extension of the company itself. If your drivers have shabby cars, then people might assume that your services are just as poor in quality.

Managing your small business fleets also involves knowing where the vehicles are, where you need them, and how many you need. You also need to store them safely when they're not being used and make sure that they have fuel when they need it. 

Running a fleet does add to your business costs, but it can be incredibly helpful for your company.

Whether you own vehicles or hire them on an as-needed basis, it's important to take care of them. 

Warehouse Management

One of the most important parts of your logistics system is your warehouses and storage solutions.

You can't keep everything on the road or in production all of the time, and warehouses can help prevent bottlenecks. 

Make sure that your warehouse is near your production facilities so that you can keep your materials and goods nearby. 

You should also use a flexible storage system.

Rather than having a massive excess of products and materials in storage, you should only keep what you need on hand. Storage costs money, and larger warehouses are much more difficult to run and keep safe. 

Instead, keep enough on hand that you can restock as needed, and always keep track of what gets sold, what you're short on, and what has been sitting in storage for a long time. This will help you understand what needs to be stored in large amounts and what you can have less of. 

You can either buy a warehouse, rent a building, or if you have a smaller company, even rent part of a storage unit or space. This keeps your costs low, while also allowing you to expand in the future.