Optimizing in-house logistics is critical for a company’s competitiveness and cost efficiency. Efficient in-house logistics reduce costs, improve service quality and increase flexibility in changing market situations. In this article, we present eight ways to improve your company’s in-house logistics from our Guide to improving the efficiency of in-house logistics.
1. Understand the importance of volume fluctuations
Volume fluctuations are becoming increasingly significant and frequent due to the variability and seasonality of trade. It is important for you to recognize and understand the volume fluctuations in your company’s operations, which can be related to, for example, production volume or warehousing requirements. Accurate measurement and analysis of volume fluctuations enables timely resource allocation, which is essential for improving the efficiency of in-house logistics.
2. Find out the costs of in-house logistics
Separating in-house logistics costs from other production and overhead costs provides better clarity and helps keep costs in check. Breaking down and analyzing these costs will help a company understand to what extent costs vary by volume and whether there is room for flexibility.
By outsourcing parts of your in-house logistics, such as your fleet and WMS, you can turn fixed costs into variable costs and free up capital for your company’s core business. This can yield cost savings of up to 10–30%.
3. Identify the work processes and their fluency
Standardization of work processes is a basic prerequisite for efficient in-house logistics. Standardized processes enable continuous improvement, as even small changes can lead to significant overall improvements.
4. Evaluate the production and warehouse management systems
Modern enterprise resource planning (ERP) and warehouse management systems (WMS) are essential for efficient in-house logistics. If operations are driven solely by employee experience, flexibility will be limited and the risk of downtime will increase. Well-functioning systems support work and ensure that information flows where it is needed.
Invest in systems that support efficient ERP. Use terminals, scanners and voice control to make things easier for employees and improve the flow of work.
5. Measure performance and develop daily management
Measuring the performance of in-house logistics and making use of information in daily management are the key to efficiency. Without sufficient and real-time data, management will be difficult and decision-making slow. The most important indicators in in-house logistics include lead time and its variations, which provide valuable information on the quality of operations.
Leverage real-time data and digital daily management where data from multiple sources is collected and analyzed. This enables efficient work monitoring and quick response to changes.
6. Check the suitability of the operating environment
The smoothness of in-house logistics largely depends on the functioning of the business environment. Even small deficiencies in warehouse and production facilities, their layout or the equipment used can considerably slow down operations. Bottlenecks are likely to arise if the business environment is not designed from an in-house logistics perspective.
7. Develop the competence of personnel
Competent personnel are the cornerstone of in-house logistics. As the competence requirements of employees increase and the amount of work requiring special competence varies, it is important to invest in training and orientation. Common practices and multi-skilled personnel improve flexibility and efficiency.
8. Leverage the expertise of a logistics partner
Leveraging a strategic logistics partner can bring significant benefits to your business. A partner will help you optimize and improve the efficiency of in-house logistics and find new growth opportunities. By outsourcing your in-house logistics to a partner, you can better focus on your core business. A partner will provide you with the best solutions and expertise in the industry, freeing up resources to support the growth of your business.
Download our guide to inhouse logistics
Interested? Read more in our In-house logistics guide and start improving the efficiency of your company’s in-house logistics!