Have you ever noticed that it's the simplest questions that are the most difficult to answer? I suppose that's because they force us to question all those assumptions we normally take for granted.
And here's one of those killer questions in logistics: - just how is all this money we're spending on logistics adding value to our business? All this money we're spending on the warehouse, on transport, on inventory control systems - what's the payback?
Certainly, I've been faced with this question more than once. And although it seems obvious that we must be adding value, it's surprisingly difficult to explain where - or how much.
Well, next Monday is a really good example of how logistics adds value to - or, if you get it wrong, subtracts value from - your business.
Why next Monday? It's because December 5 is CyberMonday - that is, the busiest day of the year for online shopping. And here are three CyberMonday reasons that show why getting your logistics right is integral to the success of your business - and not just an add-on.
REASON #1: "Companies that increased their on time delivery to over 90% saw their
customer churn rates reduce by 50%."
Or, to put it another way, if you can't get your order fulfilment right, you'll lose customers.
REASON #2: "The biggest failure of any e-commerce site comes when they stop answering emails... [and the way to solve this] comes by reducing the number of questions."
And you can be sure that a large number of these questions are chasing up an order that's been placed but hasn't arrived. So once again, making sure your logistics is working is a vital part of getting your business right.
REASON #3: "Having information about stock availability can make the difference between gaining and losing the sale."
That means knowing what you've got in stock, how many you've got - and if you haven't got it right now, how long before it's back in stock.
You can't answer these questions unless you're really on top of your inventory management. Your stock records have to be accurate, you need to know when to re-order, and you need to know when your suppliers will deliver.
Once more, all these things are part of managing your logistics.
So now you can see three concrete examples of how logistics adds value. If you don't get your logistics right, quite simply your customers will walk away - and in the long run that means no business at all. (By the way, these quotes come from a book called "7 Habits Of Successful E-Commerce Companies". If you'd like a copy, just go to www.imano.com and click on "About" then "Our Books".)
So next time you're asked the question - here's the answer. It doesn't matter how good your marketing and sales are at attracting new customers - if you don't get your logistics right, you won't be able to keep them. So if you want to grow your business, or protect what you've got, logistics can really help you. Just give me a call, or email me at stephen.errey@lucidea.co.uk and I'll show you where to start. Just think about this way - your logistics adds the value of all those future sales to your business - and that gives a pretty good payback in anyone's money.
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