By employing a real-time cargo tracking solution, companies can manage their inventories more efficiently, and hence reduce their costs. Below, we outline how this works:
1. Reduce stock held
Any firm that stores a large volume of goods to sell, inevitably has a significant amount of capital tied up. The goal is therefore always to minimise the amount of stock kept at any given moment, while still having enough to avoid disappointing customers or losing sales. Lost sales are a real risk, especially with the growth of eCommerce. When consumers try to place an online order and see that a supplier is out of stock, they will simply scroll down to the next Google search result.
The question is, how can companies reduce the amount of stock they hold without compromising their business?
The answer is through a real-time supply chain visibility solution, which provides a continuous flow of information on the location and condition of goods in transit. Armed with this type of data, your logistics and warehouse managers can be confident that they can get the items they need when they need them. And they can confidently reduce the extra stock which might otherwise be held just in case of a late delivery or an incident en-route.
2. Reduce warehouse space
Of course, holding extra stock also means paying for extra warehouse space. This is an additional cost, on top of the capital tied up in the inventory itself. By enabling better planning and consequently a reduction in stock held, real-time tracking helps you reduce storage costs too.
3. Save staff time and costs
In the absence of full supply chain visibility, you may also be paying unnecessarily high staffing costs. For example, by having personnel deployed at the unloading bay waiting for deliveries that do not arrive as scheduled. In fact, yard management can be quite a headache for companies that don’t use real-time tracking.
By predicting delivery times, a real-time tracking solution enables smoother scheduling of incoming trucks and as a result, more effective use of staff time. This not only lowers the costs of staffing but also prevents chaos at the unloading bay.
There are also fewer queues at the terminal, which can make a huge difference when you have e.g. 700 or 800 trucks going out and coming in every week (which may have been held up by a road closure or a customs delay).
4. Predict damages
Another key reason why companies tend to overstock is that they are trying to predict the risks without fully understanding them. For example, experience may have taught them that a certain number of goods will always get damaged in transit. This is an unknown factor and the true situation does not come to light until the goods have arrived.
A tracking system with shock, tilt and temperature sensors, provide a real-time indication of the condition of your cargo, by looking at the shock and tilt data you can see if an incident has occurred (e.g. a crash or rough handling).
You can also see where incidents have occurred, and which carrier is responsible. This is useful information for managing inventory better and can also guide your choice carrier in the future.
5. Improve your bottom line
The topic of how to safely reduce inventory is constantly under discussion at all large companies. Teams of skilled logistics professionals are dedicated to the task of calculating the ‘optimal’ amount of stock to hold. It makes sense. When companies are handling millions of items worth many more millions of Euros, a reduction of just a few percentage points can make a significant difference. With so much capital tied up in stock, and all the associated storage and staffing costs, an investment in a real-time tracking system such as Visilion soon pays for itself.
Our tracking solution, Visilion does more than provide real-time data on what’s happening to your cargo. By collecting and aggregating shipment data over longer periods, it gives you insights into the performance patterns of different transport options. Based on this, you can choose the best combination of routes and providers to avoid damages and losses.
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