Logistics costs are too high and rising, and that’s a big business challenge. For most companies, the total cost of logistics ranges from 7 percent to 15 percent of sales when inbound, manufacturing and outbound logistics costs are included. Yet, very few executives can actually identify total logistics spending within their corporations.

      What’s more, a study by Herbert W. Davis and Company, reported at the annual Council of Logistics Management conference in 2001, shows that the cost of logistics as a percent of sales has risen every year since 1998.

      Another big challenge is that companies have too often not received the results they expect from IT-related investments, including large-scale enterprise applications. Gartner Research reported last year, for example, that upper management judged 70 percent of all customer relationship management (CRM) implementations to be failures. As a result, especially in a down economy in which every dollar of spending is closely scrutinized, executives are focusing only on investments that can clearly demonstrate measurable results with rapid ROI and minimal risk.

SCE offers assistance

      Supply chain execution (SCE) solutions have a proven ability to drive out rising logistics costs. For example, transportation management solutions can quickly deliver savings of 10 percent to 30 percent on inbound and outbound transportation costs through freight consolidation, improved carrier management and opportunities for internal and external shipment collaboration.

      Productivity management, although less well-known, enables logistics labor productivity gains of 10 percent to 25 percent, increased labor retention rates and improved quality and ...

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