One of the pillars of a successful business is inseparably linked to the productivity of its logistics operations.
Productivity is a vital business measurement which is determined by the ratio of what the business is able to generate from what it has put in.
The ‘output versus input’ definition involves various factors such as the performance of the workforce, use of equipment, manufacturing time and return on capital.
According to a 2014 survey by Deloitte, 79% of companies with high-performing supply chains achieve revenue growth greater than the average within their industries. This leads us to understand how essential it is to improve productivity in logistics.
Here are the five vital factors which need to be taken into consideration for a more productive logistics operation:
Communication with employees is a crucial element to any organization. It’s imperative to have the right tactics and tools in order to ensure efficient internal communication.
Weekly meetings that include collaborative problem-solving and brainstorming can also be very beneficial because logistics employees will be able to enhance their critical reasoning ability.
Also, fostering open and transparent communication between employees and business leaders via regular meetings ensures that everyone has the same viewpoint about productivity.
2. Clear Procedure Standards.
Establishing clear process controls is important to achieve operational efficiency and avoid unforeseen expenditures due to misaligned procedures and output.
Customer satisfaction should drive all key personnel associated to supply chain and logistics. Thus they should always ensure full-adherence to quality codes and standards to optimize productivity and deliver value to their clients.
Typical logistic functions requiring strong compliance in relation to quality include:
- receiving and shipping schedule;
- picking and packing;
- shift scheduling;
- quality control;
- facilities management;
- and tracking.
3. Key Performance Indicators.
Knowing the key areas of improvement is crucial to maximising logistics productivity. When the management focuses on things that matter the most, it will be able to avoid wasting of valuable resources.
For those new in the business, identify and focus on 5-7 most critical areas that drive the business, and directly assign a Key Performance Indicator for each so it can be tracked and measured.
Some of the top Key performance indicators surrounding logistics and supply chain businesses include, but not limited to:
- Service Delivery
- Inventory Accuracy/Turns,
- Employee Productivity
- Cost per Unit/ Total Landed Cost
- Product Damage/Claims
- Customer Satisfaction
4. Workforce Motivation.
A motivated workforce is the backbone of a successful organization. To ensure that every employee is engaged, their core skills should be identified and aligned with the tasks where they can excel the most. Doing so helps maximize the potential of each employee and result in a continuous increase of productivity.
Here are other considerations to ensure a motivated workforce:
- Equip them with the right tools and systems they need for their day-to-day job. This will help complete their tasks at hand much faster and more effectively, thus boosting their morale.
- Create rewards and recognition system.
- Add variety to work schedules and shifts. By enabling your staff to revolve tasks periodically, you also gain the benefit of a multi-skilled workforce, allowing you to adjust your workforce level if someone gets sick or demand-specific activity hits a peak.
5. Employee Training Program.
Implementing a robust training program will keep your workforce updated with the latest tactics and tools used in the logistics operations, which is important if you want to stay relevant in your competition.
Here are the guidelines for establishing a training program for your employees:
- Create a comprehensive plan which details specific business goals.
- Identify the most important skills required to improve efficiency and effectiveness of each of the team member in your logistics operation.
- Use an external training company or hire certified professional as in-house trainers.
- Consider online training courses and packs so that your employees can still access them whilst on the go or offsite.
- Create a schedule that enables all relevant employees to benefit as soon as possible, without affecting the workforce level of your operations.
- Make sure to gather feedback from employees regularly via employee surveys.
- Create an action plan with goals and measurements indicating how well they apply the skills in which they have been trained on their actual jobs.
These are the five secrets to achieving maximum productivity in your logistics operations.