Guest Commentary: Logistics Management Challenges for SMBs

With Memorial Day only a few weeks away, and summer fast approaching, many companies will begin finalizing plans for enhancements or changes to their supply chain to better prepare for the holiday season. The current supply chain challenges aren’t limited to large enterprise organizations – small and midsize businesses (SMBs) are also feeling the pressure to ensure they can manage inventory and ship product in a way that meets customer expectations and satisfaction, while keeping costs at bay.

But in a recent survey of SMBs, only about 25 percent are using some type of transportation management solution to help with their parcel or freight process. Many believe the solutions currently available are only for larger enterprises looking to enhance their supply chain with integration to WMS and OMS; many believe their carrier provided system is giving them all they need; and others just don’t have the time to look for new solutions that may require a change in process. But to remain competitive in the market, incorporating a shipping management solution isn’t just a “nice to have” – it could be the deciding factor for growth and success in 2013.

We work with many SMB companies, but one retailer in particular is a great example in how to tackle supply chain challenges. This retailer has five locations and it wanted to grow its online presence while optimizing its inventory and in-store sales. The retailer implemented a multi-carrier shipping management solution in 2011 and the results can serve as a blueprint of best practices and questions to ask for optimizing logistics management for all SMBs.

1. Is my company “growing as one?”
Growth is a great thing for small and midsize companies, but you need to make sure the logistics management for all of your departments, locations or stores are growing together, not apart. While it’s always best to identify and plan for this early, most times you don’t realize it until you’re in the middle of some costly, confusing process. Our retail customer, for example, was manually shipping from each of its stores to customers – each store doing it separately with no defined process or centralized visibility, and working only with the inventory available in that store. Realizing the costs incurred by this huge process gap, the retailer invested in a shipping management solution that allowed it to fulfill orders from any store, optimizing the inventory and reducing carrying costs.

2. Can I take automation to the next level?
You may be currently using a carrier provided system to print shipping labels, or an inventory management system to give you visibility to your product availability. That’s a great start with automation, but can you take it to the next level? Can you integrate your systems to remove a manual entry step? Can you automate address corrections to save up to $10 per shipment for incorrect addresses? Our successful retailer improved reporting, automated label generation and integrated all the shipping data from its operations into a single database for easy tracking and history review – with an unplanned benefit of more happy customers. Which leads to the next question….

3. What are my customers’ biggest pain points?
Many SMBs in the retail space rely solely on e-commerce and online orders, while others may have a brick and mortar operation as well. It’s critical that you understand the key pain points for your customers based on your business and your position in the market – and balance addressing those pain points with the cost of doing so. For our retail client, many customers were looking for products that weren’t carried in the local store and would be frustrated by the amount of time it took for the product to get to them. The shipping management solution it employed not only helped optimize the inventory it carried, but also allowed for quick and easy shipping from store to customer, along with tracking information to keep the customer informed on shipment status.

4. Am I really shipping the most cost-effective way possible?
Parcel shipping can be a confusing and complex operation. With the changes in rates, numerous accessorials, and varying service levels, it’s no wonder many SMB’s stick to one way of doing things – either one carrier or service – and ship from there. But there’s significant money to be saved by going the extra step. Multi-carrier shipping management solutions can present carrier and service options for choosing the best option and flag accessorials prior to shipment. Our retail client, for example, went from using a single carrier for all shipments, to a multi-carrier solution that allowed it to choose the right carrier for the service level required – and saw an ROI within the first six months.

These questions may seem pretty simple, but we all know that in our day-to-day operations, SMBs often don’t have the time to step back and really look at these shipping management opportunities. But as evidenced above, an SMB can realize significant benefits — in cost reduction and revenue increase — by  taking some action. It’s worth the time.

Karen D’Andrea is the Director of Marketing, Logistics Solutions and Services for Pitney Bowes. Karen has been with Pitney Bowes for 16 years in various product management and product marketing roles. She is currently responsible for the SendSuite™ portfolio of outbound shipping management and inbound tracking solutions, including SendSuiteLive™ Global Logistics Management Solution.