How to optimize your logistics operations with QuickBooks

As the logistics industry faces increasing disruption and customer expectations, a growing priority for executives is to gain more visibility into their operations. 

Logistics operations encompass any movement of goods or materials from company facilities to the final customer. It plays a major role in a company’s overall supply chain and is responsible for fulfilling orders as efficiently as possible.

The best way to keep track of all the moving parts is with an order management solution that monitors every step and provides end-to-end visibility across the supply chain process. 

What are logistics operations?

Logistics operations refer to all the processes that take place when moving goods from the point of origin, such as a manufacturer or production center, to the final customer. 

Logistics typically include warehousing, inventory control, order fulfillment, and shipping. Depending on the company, logistics can also involve identifying suppliers or distributors needed to complete the company’s supply chain. 

At its core, logistics operations ensure a company’s resources are best used to deliver the right quantity and quality of goods to the customer according to schedule.

5 key functions of logistics operations

The entire logistics system entails many teams, processes, and functions that work in unison. Here are the five key functions of logistics operations:

Coordinating and monitoring suppliers 

Logistics starts with making sure all the goods sold to customers meet quality, budget, and delivery schedule requirements. 

Whether a company needs raw materials for production or finished goods for sale, sourcing from dependable suppliers sets the stage for the rest of the logistics operations. 

While another team (such as purchasing or procurement) may be tasked with initially finding suppliers, logistics is responsible for coordinating deliveries and assuring product quality.

Warehousing on-hand inventory 

Warehouses and other storage facilities lie at the center of logistics operations as the locations where all physical goods are stored before being sold.

Warehouse management systems are a complex process in itself, and involve designing layouts, streamlining workflows, and tracking on-hand inventory.

Optimal warehousing enables all inventory to be easily monitored and located, greatly speeding up the logistics process.

Managing and tracking inventory 

Inventory management is one of the core functions of logistics operations. While logistics is more concerned with inbound and outbound deliveries, inventory management maintains sufficient stock levels and reorder points. The latter also looks at finance allocation, sales trends, and customer demand.

Logistics and inventory management are interdependent processes that share a common objective—order and stock enough on-hand inventory to consistently meet customer demand.

Packaging products for fulfillment 

At first, packaging may not seem like it falls under logistics as it doesn’t involve moving any products. However, there are several reasons why packaging is critical to a logistics manager.

Secure packaging protects the product during delivery, saving a company from the significant and unnecessary costs of sending a replacement and even potentially losing a customer. 

In some cases, particularly in global logistics, packaging must meet strict guidelines and include additional information for fragile, temperature-sensitive products or specific material handling.

In addition, sales orders can be fulfilled faster with pick, pick, and ship instructions via mobile barcode scanners.

Optimizing the transportation process 

Transportation systems are a concern for many logistics teams, as it usually demands the highest financial investment. Whether goods are delivered via road, rail, air, or maritime, there are associated fuel costs and shipper handling fees. If a company operates its own mode of transportation, it will also pay vehicle operation and maintenance costs. 

To help reduce expenses, logistics operations managers can look at route optimization, order consolidation, or outsourcing to third-party logistics companies. 

Best practices for optimizing supply chain logistics

With all the products and processes that run through logistics operations, implementing a few proven practices can effectively streamline the supply chain. Here are five best practices for optimizing supply chain management:

Set and monitor your supply chain KPIs

To know how logistics operations are performing, a company should first set specific KPIs. Examples of supply chain KPIs are inventory turnover, order accuracy, return on investment, or customer order cycle time. 

The process of setting KPIs requires a company to break down critical areas of logistics services, and set clear quantifiable measures of performance. 

Once KPIs are set, they act as benchmarks against how well the team is meeting its targets, while also revealing any areas for improvement. 

Prioritize customer demand and expectations 

The end goal of logistics operations is getting goods to the hands of the end user. As such, it’s important to understand any changes in customer demand and their expectations when it comes to shipments. 

This helps logistics managers optimize their operations to have a positive impact on customers. An example of how logistics can increase customer satisfaction was shown in a recent study, where more than55% of retailerssaw improvements in customer experience by sending real-time tracking updates. 

Maintain clear communication across teams

The more available data and communication is shared between teams, the less chances of error and wasted human resources. Sharing relevant information across teams enables them to make better forecasts and come up with new strategies to improve their area of operations.

A recommended way to increase communication and transparency is through an all-in-one business management solution like QuickBooks Enterprise that enables all teams to access timely data and reports and boost productivity. 

Build valuable relationships with suppliers and third-party providers 

Outsourcing specific roles to third-party service providers can help a company streamline its supply chain, reduce capital expense, and scale operations at a faster rate. 

Some commonly outsourced steps are the manufacturing of products or working with a distribution center for last-mile order fulfillment. 

It’s important to find third-party providers with expertise, responsive communication, and ideally, the technical capabilities that align with the company’s existing systems.

Use automation to optimize operations

Modern supply chains have been able to streamline their logistics network thanks to automation. What was once a very labor-intensive process can now be streamlined with order processing solutions.

For example, software can be used to monitor real-time inventory levels, as well as track the exact location of customer orders as they move along the supply chain. 

To best optimize the logistics process, it’s becoming more important to integrate new information technologies and automation across the supply chain. 

How QuickBooks automates logistics operations

Logistics and supply chain operations have never needed to deal with more data metrics. From supplier shipments to tracking outbound logistics, QuickBooks Enterprise provides all the tools needed to optimize the entire logistics operations on one dashboard.

QuickBooks monitors every item in inventory across multiple warehouses so companies can easily identify inventory turnover rates and set accurate reorder points. Companies can further sync the software with warehouse mobile barcode scanners to automatically update product details and prices in real-time. 

Access to all this data through anall-in-one management solutiongives companies greater visibility to control logistics costs, uncover areas of opportunity, and develop new strategies to build a more efficient and cost-effective supply chain.

Final thoughts

As a key function in the supply chain, logistics strategy is critical to a company’s growth and competitive advantage in the market. The ability to streamline shipments, quickly locate inventory, and track customer orders in real-time all rests on having efficient logistics operations.

With the right inventory and order management software, a company can gain greater visibility and access the real-time data it needs to optimize its supply chain operations.