4 Ways Transportation Supply Chain Management Saves You Money
As a business owner, you’re always looking for ways to reduce costs and create efficiencies. As a leading third-party logistics (3PL) provider, we know that the opportunity for cost savings most overlooked by business owners is their company’s transportation supply chain.
What is the Transportation Supply Chain?
In simplest terms, the transportation supply chain is all the steps needed to get products from their point of origin to their final destination which, in many cases, is your customers. It sounds straightforward, but it can be a fairly complex and expensive process when you look more closely. Everything from sourcing raw materials, to warehousing, to shipping products to consumers or sales channels are essential factors in the supply chain.
Why is The Transportation Supply Chain Important?
As you probably know, a large portion of any company’s supply chain costs—whether it’s a two-man shop, or a global brand—come from transportation. In fact, transportation and shipping accounts for 6% of the United States’ gross domestic product. Despite these costs being so large, many business owners don’t have a transportation management strategy in place. That means money can be leaking out the door and they don’t even realize it. When not managed properly, even small oversights in the transportation supply chain can result in inefficiencies and expenses that may cut into profit margins.
How Can The Transportation Supply Chain Help Save Money?
Many manufacturers and retailers are using supply chain management to reduce inventory costs while speeding up delivery to the end customer. Even in smaller businesses where the margins are rather low, transportation costs are still a crucial element of creating profitability. For example, with a solid transportation management strategy in place, you’ll be able to:
- Optimize sales by supplying your sales channels with the amount of product they can handle. Oversupplying a sales channel may result in lost revenue through product write-offs. On the other hand, undersupplying a retailer may mean that popular items sell out quickly and you miss out on potential sales.
- Monitor fuel costs so you can capitalize when fuel is cheap and economize when fuel prices spike.
- Maximize truck space by using state-of-the-art cargo and trucking techniques that make the best use of the truck space you have. Sending out less-than-full trucks is inefficient and wastes resources.
- Reduce warehouse space and the associated costs by getting your products off the shelves and to the end user as quickly as possible.
How Do I Put a Transportation Strategy in Place?
Transportation Supply Chain management is a lot to think about. In many companies, it’s a full-time job for a single person or even an entire department. If you don’t have the bandwidth or the manpower to tackle your transportation management then you may want to consider working with a 3PL partner like Taylored Fulfillment Services.
Taylored Fulfillment Services is a licensed transportation broker that provides local and regional ground transportation and drayage services. They can help you manage last-minute demands or work with you to create a structured transportation supply chain strategy in place.
What’s the Bottom Line?
The best transportation supply chain is one that gives your customers what they want, when they want it—with you spending as little money as possible, while maintaining quality customer service. Keep that as your guiding principle as you create your transportation strategy and you’ll succeed.
Taylored Fulfillment Services is a fully integrated third-party logistics provider specializing in wholesale, retail, and direct-to-consumer unit fulfillment. Established in 1992 and headquartered in Iselin, New Jersey, they operate 1.5 million square feet of warehouse and distribution space strategically located near the nation’s busiest ports, including Los Angeles, Long Beach, and New York. Since its humble beginnings in 1992, Taylored Fulfillment Services has grown to become a national leader in distribution, fulfillment, and warehousing.