Optimizing Finished Goods Logistics for Manufacturers: Strategies, Challenges, and Solutions

The Importance of Efficient Finished Goods Logistics and the Vital Role of Logistics in the Supply Chain

Efficient finished goods logistics are vital for manufacturers to reduce costs, improve delivery times, and elevate customer satisfaction. With real-time visibility and control over the logistics process, manufacturers can improve their responsiveness to market changes, reduce lead times, and make more accurate forecasting decisions, all while effectively managing inventory levels and protecting cash flow.

In the supply chain of manufacturers, logistics play a crucial role in managing the movement and storage of materials and products from suppliers to manufacturers, distributors, and end customers. An optimized logistics system streamlines the flow of materials, products, and information, resulting in reduced lead times, improved delivery schedules, and increased overall efficiency. Real-time visibility into the logistics process allows manufacturers to identify and resolve any issues that may arise, empowering them to be more responsive to market changes and maintain a competitive edge in the industry.

Key Factors in Finished Goods Logistics for Manufacturers

In finished goods logistics, professionals in the manufacturing industry must consider several factors to optimize operations, improve customer service, and maximize ROI. These factors include shipping and transportation options, inventory management, quality control, lead times, and sustainability. It's important to find the right balance between speed and cost while meeting customer expectations and minimizing environmental impact.

​​​​​​Managing Transportation Costs: How to Keep them in Check

Transportation costs are a major expense for manufacturers in finished goods logistics. To keep these costs under control while ensuring on-time product delivery, manufacturers can negotiate favorable shipping rates, consolidate shipments, and use economies of scale. Utilizing transportation management systems can also help optimize shipping routes, reduce transit times, and improve logistics visibility.

Ensuring Timely Delivery: Strategies for Efficient Supply Chain

Timely delivery is crucial for customer satisfaction and supply chain efficiency. Strategies to keep the supply chain running smoothly and reduce lead times include using real-time inventory tracking, logistics management software, and transportation management systems. Building strong relationships with suppliers, carrier partners, and customers is also essential.

Managing Inventory Levels: Balancing Stock and Cash Flow

Managing inventory levels can be difficult for manufacturers. To balance having enough inventory to meet demand while avoiding overstocking, manufacturers can implement just-in-time inventory management and use inventory management systems and forecasting software.

Handling Returns and Damaged Goods: Minimizing Costs and Maintaining Customer Satisfaction

Handling returns and damaged goods is a challenge in finished goods logistics, but manufacturers can minimize costs and maintain customer satisfaction by implementing a return merchandise authorization process and working with suppliers and carrier partners to prevent damage. By taking a proactive and data-driven approach to these challenges, manufacturers can optimize customer service and supply chain efficiency while controlling costs.

Case Study: A Successful Implementation of Finished Goods Logistics

A Real-world example of Logistics Optimization in Action

BSH Hausgeräte GmbH, one of the largest manufacturers of home appliances in Europe and one of the leading companies in the sector worldwide, faced a challenge in their Russian Business Unit. The challenge emerged from their roadmap to omnichannel and the need of digitalization and optimization, especially on the utilization of resources side.

To address this challenge, BSH chose to work with ORTEC, a leading provider of logistics optimization solutions. ORTEC implemented their ORD&OLO solution, building on top of that and addressing also a pallet optimization process and a B2C process. This allowed BSH to automate and streamline their process, delivering also more optimal routes.

Lessons Learned and Best Practices

The key to BSH's success in logistics optimization was their willingness to invest in technology and to work closely with a specialized provider like ORTEC. By leveraging the expertise and knowledge of ORTEC, BSH was able to identify and address bottlenecks in their logistics process and implement solutions that improved overall efficiency. Additionally, BSH's regional decision is based in Turkey and they had a previous experience of working with ORTEC and obtained very good results, this helped in the selection process.

The impact of Logistics Optimization on the Business

The results of this logistics optimization project were significant. BSH was able to achieve an increase in utilization of at least 5%, which had a positive impact on their bottom line. Additionally, by automating and streamlining their process, BSH was able to improve delivery times and increase customer satisfaction. Overall, this logistics optimization project was a key factor in BSH's ability to compete in the global marketplace.

For the case of food products, Pladis (United Biscuits), the leading global biscuit and confectionery company with brands such as McVitie's, Jacob's, and Ulker. They faced the challenge of keeping a balance between having enough inventory to meet customer demand, and not over-stocking, which would be a burden on cash flow. To address this challenge, Pladis implemented a just-in-time inventory management system and forecasting software, allowing them to keep inventory levels in check and optimize their supply chain.

Lastly, Arçelik, a leading Turkish electronics manufacturer, had a challenge on their supply chain and logistics. By digitalizing the process and implementing a transportation management system, they were able to optimize shipping routes, reduce transit times, and improve the visibility of their logistics operations, allowing them to save cost and reduce the lead times. This helped them to improve their customer satisfaction and optimize the return on investment.

Summing up the key points

Finished goods logistics plays a crucial role in the success of manufacturing businesses. In order to achieve optimal performance, manufacturers must consider a range of factors, including shipping and transportation, inventory management, quality control and inspection, and lead times and delivery schedules. Additionally, people/managers in manufacturing should be aware of the different types of logistics systems available, including in-house logistics and third-party logistics, and the pros and cons of each.

The case study of BSH Hausgeräte GmbH, showed the benefits and value of logistics optimization, the importance of the collaboration between manufacturers and logistics providers, and the impact of data-driven approach to logistics optimization.

Future of Logistics and the role of technology in the industry

As technology continues to advance, it will play an increasingly important role in logistics operations. In the future, we can expect to see greater use of automation and artificial intelligence, which will help to improve efficiency and reduce costs. Additionally, the growing importance of e-commerce and the use of big data analytics will also have a significant impact on logistics operations.

As logistics providers, we are committed to stay updated and invest in technology to be able to offer the best solutions and services to our customers, in order to help them optimize their logistics operations and drive their business forward.