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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
Fortunately, answers exist for both of these business
challenges.
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 customer service.
Warehouse management systems and newer areas such as supply
chain visibility are also delivering high ROI and rapid payback.
New approaches to value delivery can ensure companies achieve
the ...
...Continued
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