The #1 tip on how companies can reduce logistics costs is…
“One could argue that carrying safety stock will increase ones warehouse costs. Yes. But, consider the alternative and how money, time and relationships can actually be saved:
* You are NOT spending hours per day trying to figure out which retailers are going to receive your limited goods and which ones are not. Thus, you are saving time by NOT having to contact your retailers to try and justify why you are not sending them their desired quantities and asking for them to re-issue POs with new delivery dates.
* You are NOT jeopardizing relationships with your buyers – and risking them terminating their business with you.
* You are NOT incurring retailers noncompliance fees for undeliverable POs.
* You are NOT having to expedite shipments to your warehouse from your manufacturer at costly air freight prices because you have the goods on hand.
* You are NOT having to expedite shipments from your warehouse to your retailers at costly 2- or 3-day shipment rates vs standard Ground rates. ”