With more and more countries introducing community lockdowns and social distancing measures, retail businesses have to rethink their business strategy to survive. Entire cities are at a standstill, and business owners can no longer rely on regular foot traffic. Instead, they might have to bring their products to their customers. And that requires a proper logistics system.
In your case, a logistics system allows you to get a product safely, quickly, and efficiently from your warehouse to the customer’s home while minimizing cost. There are many types of logistics, starting from procurement to a reverse logistics program, and you will have to find the best one for your business needs. It involves different aspects of your operation and might even require multiple systems in place.
To rationalize the system, you need a logistics strategy.
1. Formalize your metrics
If you are new to logistics planning, then the first thing you should do is to identify your key metrics or performance indicators. It’s the only way you will be able to know if your logistics strategy is working for your business.
Some of the metrics you should measure include inventory levels, customer order cycles, and the total logistics cost. Do you want to focus on speed or price? Getting orders out fast can cost you a lot of money, while cutting corners might displease your customers. Strike a balance that best serves your business model.
2. Embrace automation
Small retail operations can get away with manual logistics handling as they only need to fulfill a few orders on any given day. But as businesses increase in size and complexity, they will have to minimize human input in the logistics chains to keep things as smooth and efficient as possible. If they want to reduce human error, they need to invest in automation.
Automating allows you to free up valuable human resources for other aspects of your operation. There are different tools and software that can handle high-volume or mundane parts of logistics, and you get to assign people to where they are needed the most.
3. Start small
You do not need an overly complicated logistics chain if your operation is simple. With retail locations closed, you can simplify the logistics chain to getting a product from the warehouse to the destination. A shorter chain translates to lower costs and faster delivery time.
4. Outsource
You do not have to do everything yourself. If your business is focused on making food or selling electronics, you do not have to learn how to run a courier business or start an in-house delivery team.
You can outsource the final stages of the logistics chain to a third-party provider who can do the job faster, cheaper, and better than you can. That way, you can focus on what you do best and let others worry about the delivery.
These four guidelines will allow you to craft a logistics strategy for your business. Keeping a business afloat during a pandemic is exceptionally challenging, which is why business owners have to adapt quickly or risk bankruptcy. With more and more people staying at home, it makes financial sense to transform your retail-focused business into one that allows home deliveries.
