Basic strategy to reduce freight costs

Basic strategy to reduce freight costs

1. Hybrid strategy. A hybrid strategy means that part of the distribution business is done by the company itself. The basic idea of ​​this strategy is that although a pure strategy (that is, the delivery activities are all completed by the enterprise itself or completely outsourced to the third-party logistics), it is easy to form a certain scale economy and simplify management, but the variety of products is variable. Different specifications, sales volume, etc., using a purely strategic distribution method beyond a certain degree can not only achieve economies of scale, but also cause scale uneconomic. The use of a hybrid strategy to rationally arrange the delivery and outsourcing of the company's own delivery to the third-party logistics, can make the distribution cost lower.

For example, a dry goods manufacturing company in the United States has built six warehouses and has its own fleet to meet the distribution needs of 1,000 chain stores throughout the United States. With the development of the business, the company decided to expand the distribution system and plans to invest 70 million US dollars in Chicago to build a new warehouse with a new material handling system. When the plan was submitted to the board of directors for discussion, it was found that this was not only costly, but even if the warehouse was built, it could not meet the needs. As a result, the company turned its attention to renting public warehouses and found that if the company rented public warehouses nearby, added some necessary equipment, and added the original storage facilities, the storage space required by the company would be sufficient, but the total investment only needed. 200,000 yuan equipment purchase fee, 100,000 yuan outsourcing freight, plus rent, is far less than 7 million yuan.

2. Differentiation strategies. The guiding ideology of the differentiation strategy is: product characteristics are different, and customer service levels are also different.

When a company has multiple product lines, it cannot be delivered to all products according to the same standard customer service level. Instead, different stocks, different transportation methods, and different storage locations should be set according to product characteristics and sales levels. Neglecting product differentiation increases unnecessary distribution costs. For example, a company that produces chemical additives is classified according to the proportion of sales of various products in order to reduce costs: sales of Class A products account for more than 70% of total sales, and Class B products account for about 20%, Class C. The product is about 10%. For Class A products, the company has stocks at all sales outlets. Class B products are only stocked in regional distribution centers and are not stocked at each sales outlet. Class C products do not have inventory in regional distribution centers. The warehouse of the factory is in stock. After a period of operation, it turned out that this method was successful, and the total distribution cost of the company dropped by as much as 20%.

3. Consolidation strategy. The merger strategy consists of two levels, one is the consolidation of the distribution method; the other is the common distribution.

Merger on the delivery method. When the company arranges the vehicle to complete the distribution task, it makes full use of the volume and load capacity of the vehicle to achieve full load, which is an important way to reduce costs. Due to the wide variety of products, not only the packaging form, storage and transportation performance are different, but also in terms of bulk density, they often fall far apart. If only a large cargo is loaded in a car, the load is often reached, but the volume is much more empty. The only thing with a small weight is the opposite. It seems that the car is full and does not actually reach the vehicle load. Both of these situations actually caused waste. The implementation of reasonable light and heavy fittings and different sizes of goods combined with loading, can not only achieve full load in terms of load, but also make full use of the effective volume of the vehicle to achieve better results. It is better to use computer to calculate the better solution of cargo distribution.

Co-delivery. Co-delivery is a kind of sharing at the level of property rights, also known as centralized collaborative distribution. It is a combination of several enterprises that collects a large amount of the same distribution facilities. The standard operation mode is: under the unified command and dispatch of the central organization, each distribution entity is jointly operated by business activities (or with assets as a link). Actions, coordinate operations within a larger geographic area, and provide a series of delivery services to one or several customers. There are two kinds of such distributions: First, small and medium-sized production and retail enterprises work together to implement common distribution, that is, in the same industry or small and medium-sized production and retail enterprises in the same area, the transportation volume is small and the efficiency is low. Joint distribution can not only reduce the company's distribution costs, but also ensure the distribution capacity is complementary, and it is beneficial to alleviate urban traffic congestion and improve the utilization rate of distribution vehicles. The second is the combination of several small and medium-sized distribution centers. Users in the region, due to the small amount of materials allocated to each distribution center and low utilization rate of vehicles, several distribution centers will collect the materials required by users and distribute them together.

4. Delay strategy. In the traditional distribution planning, most of the inventory is set according to the forecast of future market demand, so there is a forecast risk. When the forecast quantity does not match the actual demand, there will be too much or too little inventory. , thereby increasing distribution costs. The basic idea of ​​the delay strategy is that the appearance, shape and production, assembly and distribution of the product should be postponed as much as possible after receiving the customer's order. Once you receive an order, you need to react quickly, so a basic premise of adopting a delay strategy is that information transfer is very fast. Generally speaking, enterprises that implement the delay strategy should have the following basic conditions: 1 Product characteristics: high modularity, high product value density, specific shape, easy to describe product features, and can change the volume or weight of the product after customization. 2 production technology features: modular product design, high degree of equipment intelligence, custom process and basic process are not much different; 3 market characteristics: short product life cycle, large sales volatility, price competition, market changes, product Short lead time

There are two ways to implement the delay strategy: production delay (or delay formation) and logistics delay (or time delay), and there are often processing activities in the distribution, so the implementation of the delivery delay strategy can be either delayed or Time delay is used. In the specific operation, it often occurs in areas such as labeling (forming delay), packaging (forming delay), assembly (forming delay), and transmission (time delay).

A US company that produces canned tuna has reduced its inventory levels by adopting a delay strategy to change its distribution. Historically, this company has designed several labels for different markets in order to increase market share. After the products are produced, they are shipped to distribution warehouses in various places for storage. Due to different customer preferences, the same product of several brands often appears to be out of stock for a certain brand, while others are slow-moving. In order to understand this problem, the company changed its previous practice and shipped it to the distribution centers without labeling it when it leaves the factory. When it receives the specific order requirements from each sales outlet, it will be labeled according to the brand logo designated by each outlet. The label, which effectively solves this contradiction, thus reducing inventory.

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