By Gary Whittle, LinQ Alliance
The logistics and transport industry has felt the brunt of the credit crunch with a continuing downturn in manufacturing and retail as well as a tailing off in the importation and exportation of goods. As company failures in the sector increase, the name of the game is to stay afloat until the recession abates and a more stable outlook prevails.
Periods of recession usually bring nothing but bad news to companies and organisations, both large and small. Leaders and managers have to think and act fast in order to try and minimise the harmful effects of the economic downturn on their organisation. Measuring delivery performance and cost efficiency during financial recession is one of those actions that can spell the difference between decline and growth.
In times of boom, companies do not focus so much on cost, but are more worried about getting their products to market. However they begin examining their expenditure when a downturn occurs and pressure is placed on cutting costs. The supply chain has therefore come under the microscope for process refinement, productivity, and the reduction of operating costs. Streamlining and optimisation become the operative words as manufacturers and retailers search around to save on transportation costs without sacrificing quality and expertise. In addition, as the logistics sector becomes increasingly unstable, businesses need to make sure that their supply chain is as secure as possible.
Until recently, medium sized logistics companies worked independently relying on their own commercial acumen to ensure a steady flow of orders. Now as demand slows, sharing information and facilities is proving a lifeline for companies struggling to compete in a reducing marketplace.
The formation of companies, such as LinQ Alliance, has totally altered the approach of the medium sized logistic company to winning new and retaining existing business. As LinQ Alliance has clearly illustrated, individual businesses can successfully form themselves into a reputable 3PL company with its own board of directors, premises and staff. The concept of individual businesses holding operational meetings and sharing information and resources would have been impossible to imagine only a few years ago. Now, it is proving a productive and positive alliance.
Collaboration between medium sized companies not only guarantees the security of the supply chain but also ensures the customer reaps the rewards of optimised fleet efficiency. Ensuring that vehicles are used to their full potential through efficient planning and real-time visibility of fleet activity can all make a significant difference to the bottom line.
Linking operations through the effective use of IT, such as transport management systems, provide the planning and monitoring tools to ensure a vehicle’s efficiency, both in terms of load and time.
Such systems give customers greater control of stock levels and transactions and can provide customers with daily, weekly or monthly reports to provide them with stock levels and movement figures over the Internet. Detailed, real-time, data makes it much easier for companies to read trends and patterns, which is especially important during a recession.
Utilising a 3PL provider, like LinQ Alliance, means that companies do not require a variety of different transport planning and implementation solutions to save costs. A single solution, customised to meet specific requirements, can help monitor every aspect of a company’s operation from planning, vehicle tracking and performance or proof of delivery.
Large 3PL organisations have the reputation of complicated management structures and impersonal call centres, which is why companies have sometimes been reluctant to contract out their logistics requirements to them. However, with medium size logistics companies working together, this impersonal approach is not a factor. Instead, companies like LinQ Alliance operate a local management team and are able to pass on cost savings from reduced administration overheads as well as providing efficient decision making in an appropriate reaction time. This approach also allows for synergies between multiple fleets and services to be identified, offering a single, integrated solution.
In a recent pole 58% of 350 companies stated that logistics would be a main source of cost saving during 2009 and 40% saw outsourcing logistics as a means of cutting costs in the recession. 3PL organisations that can offer competitive rates, innovative solutions and value-added services are well placed to take advantage of these cost-cutting measures.
Organisations shouldn’t see the recession as a short-term situation, but instead as a complete change in the way things are done – supply chain operators need to ensure they update their strategies in order to remain relevant. 3PL providers, such as LinQ Alliance, are placing an added importance on cost reduction in their efforts to serve customers in these tough economic times. Companies that make headway now with strategic supply chain improvements will be much better positioned to pull away from competition when the economic tide begins to rise.
LinQ Alliance Ltd
Tel: 01332 666663
E: john.mccune@linqalliance.com
www.linqalliance.com
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