Regardless of whether it’s mitigating the high costs of customer deliveries, reducing freight costs on incoming shipments, or merely reducing the costs on customer returns, all companies see reducing freight management costs as an essential part of improving profit. Some rely upon a strategy of using bulk shipments to drive down the per-unit freight costs on incoming shipments, while others try and use competitive bids to nail down the best possible deal. It’s a difficult pursuit and one made all the more difficult by a company’s manual processes. It’s like trying to catch lightning in a bottle; success is measured by the ability to have everything align and have absolutely nothing go wrong. Unfortunately, rarely does this happen. If something can go wrong, it will. However, there are some solutions to skyrocketing gas prices and the going concern of fuel surcharges, and they include managing freight via enterprise mobility solutions. So, what are some of the ways that your enterprise can reduce freight costs via a mobile, handheld computer?
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There isn’t a single company that doesn’t bemoan the high costs of freight. All companies would love to be able to reduce these costs, while at the same time mitigating the damages caused by delivery delays. Unfortunately, given the high costs of gas, and constant fuel surcharges, most companies seemed resigned to their fate; pay the freight bill and absorb the fuel surcharges because there’s no getting around the problem. However, is this really true? Do companies have no choice but to accept their fate, one marked by extremely high freight and the frustration that there’s little they can do to reduce the damaging effects of delivery delays? Well, the short answer is “no,” they don’t.
There are a myriad of books, courses, and training tools aimed at helping salespeople win more business. Some focus on improving B2B (business to business) customer relationships, some focus on the shorter sales cycles present in B2C (business to consumer) sales, and yet others concentrate on more complex sales, ones typically associated with large contractual agreements. However, what is the ultimate indicator of the ability for a salesperson to close a sale? Is it their “gift of gab”, their ability to turn a “no” into a “yes,” or is it simply their ability to get that customer the essential information they need to make an informed decision? Well, when you step back and take an honest look at sales, it becomes readily apparent that success often comes down to the ability to provide information in a timely manner. While not the only indicator of success, the ability of a salesperson to give accurate information does make a difference. With this in mind, a number of companies are helping their salespeople close more business via their rugged handheld computers. Salespersons today must be connected and mobile! They must be able to provide customers with immediate information, and it is this ability that often means the difference between business won and lost. So what are some of the immediate benefits of empowering your sales team with rugged mobile computers?
How much does inventory damage cost your enterprise? Have you taken the time to define these costs and their impact on your bottom line? More importantly, do you know why damage occurs so frequently within your warehouse? When answering these questions, think of the high costs of managing a supply chain with manual processes. Think of the number of data entry errors that occur as a result of managing inventory via excel spreadsheets and tables. Think not of how fragile your inventory is, but how purchasing more than needed forces your warehouse personnel to overstock shelves with huge volumes of finished goods your company has no orders for. Ultimately, think of how much more damage is likely to occur the longer you hold that excess inventory.
Interested in knowing how upgrading your manual processes to enterprise mobility hardware can help reduce inventory carrying costs for your company? Perhaps you are unaware of what these expenditures entail and how detrimental they are to your bottom line. Do you know that your inventory costs are likely driven by two main factors? One is your costs to purchase and hold inventory, while the other is your cost of losing revenue when inventory is not in your warehouse. Most enterprises assume that their carrying costs only pertain to the time it takes to purchase, hold and sell their inventory. The time it takes to complete these steps means companies must invest large amounts of capital in inventory without immediate returns. Equally impactful are the high costs associated with losing market share and sales, simply because your company does not have the right amount of inventory to fulfill customer orders. That comes from inaccurate inventory counts and tracking, which is often the result of companies that are slow to adopt best business practices with respect to how they manage their inventory. However, upgrading your warehouse management practices with enterprise mobility solutions can reduce the impact of these costs across the board. What can you expect from upgrading your inventory processes?
Does your company track the impact of lost sales on your inventory costs? Surprised to hear that lost sales is viewed by many companies as a cost of inventory? Do not be shocked! It is important to note that any cost resulting from how inventory is managed, can be seen as a cost of managing inventory. If a company loses a sale because of low inventory counts, or because of a lack of adequate inventory, then that lost sale is a direct cost of inventory. It is ultimately why some companies establish gross profit objectives for their procurement department. If the company loses a sale, then it could lose a customer and that can eventually lead to a loss of market share. So if losing a sale is a cost of inventory, what can companies do to reduce its impact? More importantly, what does it mean when a company encounters too many lost sales due to low inventory counts?
Most companies understand that inventory costs money, but few understand why inventory becomes more expensive the longer it’s held. Still, even fewer companies take the time to track the impact of the cost of money on their inventory. When thinking of the cost of money, think of your company’s costs to purchase and retain parts and raw materials for long periods. Think of your company’s financing costs, how those costs rise over time and ultimately, what drives those costs. More importantly, think of how long it takes to sell that inventory and how certain customers can increase these costs by taking too long to pay Continue reading “Understanding Your Company’s Financing Costs of Inventory” »