An effective logistics strategy ensures customers’ expectations are met and that they receive a positive brand experience. This is done by ensuring reliable, consistent deliveries at affordable costs. We provide tips on how to create one.
Having a sound global distribution strategy in place will ensure your customers based overseas receive the products they order at the right time and in good condition. By offering international delivery, you can expand your customer base across the world.
The transportation, handling, and storage of raw materials and finished goods are vital elements of supply chain management, and how these activities are conducted can affect the quality of the products and the end customer experience.
Strategic logistics planning ensures that the end-user receives their product at the estimated time and at an affordable rate. With improved service delivery, you will also achieve greater customer satisfaction.
What is a logistics strategy?
A logistics strategy encompasses strategic, operational, and tactical levels of logistical planning. The supply chain strategy should include warehouse facility locations, customer service levels, and inventory and transportation decision-making.
How do you create an effective logistics strategy?
There is nothing more important than your customers. Ensure that your logistics planning focuses on your commitment to making deliveries reliable and consistent.
1. Identify and track KPIs of delivery time, inventory management, and order accuracy
Building trust over time with your customer base is vital to customer brand loyalty. In order to achieve this, reliable on-time delivery, and order accuracy is essential. Key performance indicators (KPIs) help to assess, analyse, and track manufacturing processes. Start by first identifying the KPIs you can use to track your performance. This could be a combination of a few metrics, including inventory accuracy, customer order cycles, transportation and warehousing costs or number of shipments.
By measuring these KPIs, you can evaluate your long-term performance and your progress, maintain high standards and identify weak areas. This way, you can continually improve your company operations, productivity and performance. When customers are happy with your delivery service, they will order your products again.
2. Leverage digital technologies
Supply Chain Visibility (SCV) provides technology that offers real-time data. With Internet of Things (IoT) sensor technology, cloud services, artificial intelligence, robotics and analytics, you can track shipments, and inventory movements in warehouses. Digitalisation, firstly, automates the data gathering and entering process, and so removes the effort, time and cost involved in manually needing to do so.
These digital technologies also allow you to link and combine data from different sources across the supply chain in order to be able to extract insights, identify systemic issues, find solutions to these problems and modify existing strategies. With advanced analytics, you can also accurately forecast demand and gather the resources required to meet these demands.
With digital systems, it is now possible to track and trace items as they make their way across the globe. And this lets you provide your customer with real-time updates – for example, when their product is first mailed from the store or when it arrives in the port of their country. This increases transparency with your customers, fostering trust in your brand.
3. Improve supply chain transparency and traceability
Supply chain transparency focuses on mapping the whole supply chain while traceability looks at the individual purchase orders progressing through the supply chain. With real-time data, you are immediately made aware of any disruptions along the supply chain – which improves efficiency. Both transparency and traceability enhances trust in the company and its product, ensuring customer loyalty. Inspiring consumer trust by sharing and explaining relevant procedures for delivering their products is also of great importance.
4. Prioritise customer satisfaction to build a strong reputation
Satisfied customers will become loyal customers, and they become your company’s biggest promoters. They attract new customers with referrals and recommendations. Customer satisfaction will also let you stand out from your competitors, help you make better product decisions and ultimately, increase sales.
Use surveys to find out what your customers want, and manage their expectations. Allow your customers to interact with you on social media platforms. By answering queries, addressing any issues and making customer service an effortless process – you incrementally build a positive brand experience for your customers.
5. Outsource logistics to maximise efficiency
When first starting out and orders are small, you might carry out the logistics in-house, or on your own. As your order numbers increase and your company scales up, it may not be feasible to continue with this arrangement. When you outsource your logistics, you can save time, deliver goods in a cost-efficient manner and gain access to expertise.
By outsourcing your logistics to a third-party logistics provider, you can also free up your resources to focus on other functions, like marketing and branding, or expanding overseas – in order to further propel your business.
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