Question

if a business looking to increase the responsiveness instead of efficiency and they want to increase the facilities. how inbound and outbound cost are going to be effected?How transportation cost can be optimized?

Answer 1

In order to increase the responsiveness of a business which is basically how quickly you respond to your customers and how quickly you provide them with their desired product. Responsiveness is the most important part of a business as in order to get a goodwill in a particular sector. For making the business more responsive logistics system has to be updated with technology like ARP (autonomous replenishment system), POS, SAP these technologies which helps in fulfilling the customer requirement a lot.

Logistics basically consist of inbound and outbound. Inbound logistics is all about movement of raw materials in order to manufacture a product in a factory and outbound logistics is all about delivering the finished product to the direct consumer. If we talk about inbound logistics manufacturing process should be done at faster rate considering the demand of the product so that maximum inventory can be stored in the warehouse. For this cost of labor will increase as more manpower will be required. So, this will increase the cost of inbound logistics. These technologies SAP and ARS will instantly get the message from the respective store where the product reaches the safety point which means that 80% of the product present in the stores is sold so replenishment has to be done. This will help increasing the turnover as lead time will decrease and inventory will reach on time to the stores which will help in winning customer satisfaction. Outbound logistics cost will also increase as for improving the responsiveness for a business more vehicles with the delivery man will be required so that products can be delivered to the customer at the right time and at the right place.