Reducing logistics costs is crucial for businesses aiming for long-term success and sustainable growth. Companies can streamline their operations by adopting strategies that optimize logistics expenses, enhancing efficiency and profitability. But before attempting to optimize it, getting an accurate picture of the cost for every customer and channel is critical. And unfortunately, not many companies are still doing it right. Some still rely on the older and more static KPI of Cost of Goods Sold (COGS). Companies that really understand their operations and costs have moved to a more dynamic and realistic metric, cost-to-serve. Here, we'll dive into how innovative logistics strategies can trim the cost-to-serve, making your supply chain leaner and agiler.
First, let's dive into Cost-to-Serve (CTS) in logistics with an easy-to-understand, everyday example. Think about planning a big backyard barbecue. It's not just about the cost of burgers and buns. You've got to think about everything – the food, decorations, music, and even those extra chairs you might need. Each of these adds to the total cost.
Now, in logistics, CTS is also like that. It's all about the complete view cost of getting your product into the customer's hands. This means looking at not just the shipping but also storage, handling, and all the little details like special packaging and long-distance deliveries that add up. Getting a handle on these costs sets your business apart and unveils many unknowns.
Now, let's jump into some of the strategies that can keep your CTS in check.
Now that we understand the importance of CTS better let's get to the juicy part. Here are the top 7 strategies that you can use to improve cost-to-serve and be more profitable in turn:
Understanding and implementing these strategies can really transform how you handle logistics, making your operations more profitable and efficient. It's all about being proactive and staying ahead of the game.
Let's talk about how Holocene can be your partner in making these strategies real-life success for your company. Here's what you get with Holocene:
Streamlining logistics isn't just about saving a few bucks. It's about being clever, quick on your feet, and a little bit tech-smart. And with Holocene by your side, you're all set to face these challenges.
Think about it – you're not just improving your logistics but transforming it into something extraordinary and future-ready. Reach out to Holocene today and start your journey towards a more efficient, cost-effective supply chain. Let's make things happen together!