What is the Logistics Nightmare in the Business?

. 6 min read
What is the Logistics Nightmare in the Business?

Logistical Nightmare Examples

  1. Owning and running a business in a competitive environment could prove to be a tedious and challenging task.
  2. In the current scenario, challenges in running a business could include potential staff issues, financial moves, business management, etc.
  3. Plus, many small-scale companies face logistical challenges.
  4. Before small businesses make promises to suppliers, they need to make sure they have everything that the customer wants.
  5. For small businesses, control of inventory is the way.
  6. Further, it needs processes to audit, verify and place to count its inventory.
  7. Excellent customer service ensures that the customer gets what they want and when they want it.
  8. This gives a competitive advantage and streamlined logistic pipelines.
  9. However, poor customer service would put a dent in your profits and operations.
  10. What if goods are being purchased and not being actioned by staff appropriately?
  11. What if your customer service is not up to the mark?
  12. The key here is effective order tracking.
  13. Many consumers don’t buy anything from a company with just one bad experience.
  14. So, focus on meeting the customers’ expectations.
  15. Further, are you adequately educating the on-board staff?
  16. This could lead to stalling in the buying process.
  17. Being a small business organisation could be a costly nightmare of products’ logistic movements safely from one place to another.
  18. Unfortunately, small businesses learn it the difficult way that logistics is not a laughing matter.
  19. It could turn out to be costly, stressful and might prove a risk to the business and its reputation.
  20. There could be a miscalculation in cost, a considerable cut in the profit margin, or transportation that led to damaging goods.
  21. There are many logistical challenges faced by the small business.

Here is a list of some of those challenges:

Supply Chain Issues

Supply chain management is an essential aspect of any kind of business. The small-scale businesses are hugely affected in the supply chain management when it comes to gaining access to the supplier. This happens because of the enormous competition in the market. There are various reasons why supply chain management issues arise like selling products or services on a credit basis. So, in the undisturbed supply chain, you can run business regularly. We have listed down some common supply chain issues:

  • Increased cost: Profit margins become low because of high cost throughout the supply chain. There are various contributors to increased cost, and these include:
  • The price rise of fuels to transport goods by sea, air or road.
  • The high cost of labourers from manufacturers and suppliers.
  • Increase in commodity price that raises the cost of the raw materials.
  • Complex international logistics that leads to higher storage charges, management of products and transfer.
  • Complexity in the supply chain: There are multiple channels across which consumers buy products, and as the market increases, the supply chain has to adapt. Supply chain managers have to manage multiple supply chains, other organisations and third parties for a good customer experience. Thus, supply chain managers have to do variations for addressing each channel:
  • E-commerce websites that sell directly to consumers need local logistics and fast delivery.
  • Drop-shipping retailers need fast international services to ensure the consumer receives goods quickly.
  • Large storage location for wholesalers and traditional retailers.  
  • Speedy improved service to meet consumer demands: Now consumers have more choices. Thus, each small business needs to ensure providing excellent-quality products and services. Speed and quality are equally important as pricing because:
  • Consumers need immediate retail and online goods.
  • Quality requirements should be matched in products ordered by consumers.
  • Environmental sourcing of goods is essential to ethically aware consumers.
  • Raw materials, finished products and goods must meet safety and other regulations mandated by law.
  • Supply chain risks create pressure: Various reasons could put pressure on the supply chain like international complexities, economic pressures, environmental changes and trade disputes. This might cause significant problems like:
  • More steps in supply chains lead to complexities for downstream and upstream partners.
  • Regulations, quality management, and compliance in the supply chain demand strong agreements and controls in supply chain organisations.
  • Suppliers, logistics, manufacturers, customers and clients require full coordination and management.

Delivery Challenges

  1. To ensure that the customer is happy, the appropriate delivery process would be a good start.
  2. Many customers love to have a real-time response and are looking forward to knowing about their service providers’ order status.
  3. Some crises would make it worse when small scale businesses do not have delivery people to send goods.
  4. It is easy to miss out the potential customers when there is no strong impression.
  5. Without proper logistic providers, it becomes difficult to deliver the goods with all the safety measures professionally.

Cost Controlling

  • Is there any necessity to check on cost?
  • It is possible to track costs and know the amount of money being spent on each logistic chain.
  • Because if you don't control cost, you will struggle to manage it.
  • To minimise the expenditure, it is better to team up with others in the business network, mainly sharing logistic costs such as shipping.
  • This is important because when you share the cost, you share responsibility and workload.

Inventory Shortage

  1. Being a small business owner, the demand of products might not be in your control.
  2. For instance, you might be busier in December than February.
  3. However, demand changes are predictable sometimes only.
  4. For example, you own a cafe and suddenly if there comes a study linking that coffee leads to heart diseases.
  5. In this case, your demand would fall but would you let go of your staff or wait for the situation to be in your favour?
  6. Businesses with high inventory costs might be a problem in this kind of scenario.
  7. Effective inventory control would ensure that you are never out of seasonal inventory, and at the same time, no excess stock is left when there is no demand.
  8. Further, effective forecasting of demand gives a guard against fluctuations such as using subcontractors for heavy demand and hours and employees would work.
  9. Logistic problems if not corrected on time, can become business problems. So, it is essential to take care of it.
  10. We have listed down a few tips that might solve your logistic troubles:

Third-Party Logistics Service

  • You can hire a third party logistic service provider if you have any budget for it.
  • Depending on your market, you can connect with a logistic company to deliver your products in that particular area.
  • Further, you can go for outsourcing to ensure your business's entire logistic needs can be taken care of, and you can grow your business in your free time.

Small Business Logistics Service

  1. If you are not willing to spend a lot of money on logistics because of your business's size and warrant, you can explore some of the shipping and transportation providers.
  2. Various transportation providers will cater services to small scale businesses.
  3. There are few reliable options like FedEx, UPS and DSL, which could be viable for the business.

Teaming up with Partners

  • In small scale business, logistics could turn out to be a nightmare because of budget constraints.
  • In this case scenario, you can network with other business persons who are facing the same problem.
  • Many logistic companies set prices based on the volume of goods, and another business partner could prove to be a cost-effective method.
  • Before opting for this option, you must thoroughly explore a few aspects like the business partner's needs and specific details about the logistic company.
  • It is true that logistics could be a nightmare but to be more efficient, weigh the pros and cons when considering the business logistics needs plan.
  • There are various factors that you could consider.
  • However, it is essential to view all the elements to find a cost-effective and most efficient option for your business.
  • After all, good logistic service makes your customers happy and is a stepping stone towards the business's growth!

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