Prevent over- and undercapacity and save transportation costs
As a logistics manager or engineer, you are probably often told to cut back on transportation costs. Of course, you've already taken advantage of the "quick wins" and the most obvious improvement actions. In short, saving even more is easier said than done.
Your first reaction may have been to look again at the rates charged by logistics providers. In addition, you may have looked at load factor optimization to minimize the number of transport units. After all, that’s low-hanging fruit! But when the maximum is reached here, what then?
Looking beyond rates and load factor
Did you know that if you know in time the volume, number of shipping units and weight that will be transported, you can make significant savings in transportation costs? We proved this once again when we took a close look at the packaging management of one of our customers – a supplier of baggage handling systems. We discovered that creating predictability in their logistics flow was the key to saving on their transportation costs.
Our client on the improvements:
“I planned my transportation based on order size and historical orders. During loading, my employees often found out that more or less space was needed than expected. So 8 trucks were regularly booked just to be sure, but often only 7 turned out to be needed. A waste of money!
Ideally, I want to know how many boxes, pallets or containers are needed to prepare the order as early as the planning stage. That way I can reserve the right amount of cargo space and also inform the customer early on about the transportation costs that will be passed on. I can do that now and it saves a lot of stress and costs.”
The effects of overcapacity and undercapacity
Both undercapacity and overcapacity negatively affect your efficiency and costs:
Overcapacity: you book too many trucks that have to be canceled last-minute. This involves unnecessary costs.
Undercapacity: You book too few trucks, so another (urgent) transport has to be arranged last-minute. Not only is this more expensive, but it also causes stress and disruption to your process. Your employees spend extra (and valuable) time trying to solve the problem.
Software that helps you prevent under- and overcapacity
This is where we at Faes have developed a smart solution; namely StackAssist®. This is a SaaS system (Software as a Service) that makes it very easy to instantly calculate the optimal stacking and loading method, which is then visually displayed on the screen. The advantage is also that you immediately know how much space a particular order takes up and thus how many trucks are needed to get your shipments out the door.
Also stacking and loading smarter?
How can StackAssist help you stack and load your customer orders more efficiently? We’d love to tell you more about it. Leave your comment or question in the form below or contact us directly.