If you're a product-based business, you need to know these
In today’s fast-paced society, understanding logistics is crucial for ensuring operations run smoothly and customers are kept satisfied. Whether you’re an e-commerce store, physical shop or wholesale distribution company, logistics affects your bottom line.
If you’re not clued up in the world of logistics and its terminology, you may well struggle to provide the best service for your customers. To help navigate the complexities, here are six essential logistics terms every business owner should know.
1. Supply Chain
The supply chain is the entire journey involved in producing and delivering a product. From raw materials to the end customer. This includes manufacturers, suppliers, transporters, warehouses, packers, retailers, and more along the way.
So, why does it matter? Understanding your own unique supply chain helps you spot any inefficiencies. You’re then able to take action to reduce costs and improve the customer experience.
2. Freight Forwarder
A freight forwarder is an intermediary who arranges the transportation of goods from A-B on behalf of a business. They take on the responsibility of secure and trackable transportation, administrative paperwork, customer liaison, any international requirements and coordination with carriers.
So, why does it matter? They simplify international shipping, as well as domestic, for the business, helping to avoid delays, hiccups and compliance issues, while reducing stress and workload for the business owner.
3. 3PL (Third-Party Logistics)
One step up from Freight Forwarders are 3PL providers who provide a more comprehensive, outsourced logistics package with additional services including warehousing, transportation, and fulfilment.
So, why does it matter? Working with a 3PL can saves time while reducing costs, allowing companies to scale their operations without investing heavily in new infrastructure. It allows business owners and employees to focus on the areas of their business that are specific to them and their strengths, as opposed to all of the basic tasks that need to be ticked off daily.
4. Last-Mile Delivery
We think this one is slightly misleading to be honest… Essentially, ‘last-mile delivery’ refers to transporting the product from the warehouse to the end customer (which could well be hundreds of miles!). This is the final step of the entire delivery process, and where the end customer comes into play. This is the moment they will receive the email and/or notification to say “It’s left our depot!”
So, why does it matter? It may well be the final step, but it’s often the most expensive and complex part of the delivery process. It also directly impacts customer satisfaction, and what most customer reviews focus on, good and bad.
5. Lead Time
The lead time is the amount of time it will take for a product to be manufactured and delivered to the customer once it’s been ordered. The customer is very interested in the expected length of this, especially those last-minute shoppers!
So, why does it matter? Knowing your current lead times helps you to manage your inventory and set realistic customer expectations. It’s always best to underpromise, then overdeliver!
6. Reverse Logistics
You’ve got it, reverse logistics explains the return of goods. From the customer back to the seller or manufacturer. Returns, repairs, upgrading or recycling are all included in this process.
So, why does it matter? A solid, reliable reverse logistics process improves the overall customer experience and your brand reputation. If they know a return would be simple to implement, and settle financially, the trust in the brand increases. It also helps businesses recover value from returned products.
Final Thoughts
Understanding these industry terms can empower you to make better decisions for your business, negotiate smarter partnerships, and amend your supply chain for optimum efficiency. As and when your business expands, ensuring you have a solid logistics strategy, and the vocabulary to support it, will be vital to staying competitive.
If there are gaps in your logistics process or if you’d like to know where you could be making improvements, get in touch with our team today. Call us on: 01603 408143 or send an email to: info@concordetransport.co.uk
