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We’ve all been in a store or have seen news stories on when a major product recall is being announced. Imagine you are a company that has to relocate and obtain hundreds to thousands to millions of products, all the while trying not to plummet your profits or ruin your business’s reputation. Sound like a nightmare? It is. Sadly, for many companies this horror comes true, and often enough many companies struggle to find a way to survive and make it out of the business still alive.
Fortunately, there is a way to manage and survive a product recall.
Through crisis management, a strategy can be developed, tested, and implemented when needed, to help handle the logistical web of relocation, obtainment, and fixing of the product during a recall. The best part is, there isn’t an immediate need to call up and hire a full PR or HR staff. Instead, you can look towards a 3PL provider to help you get started. Often enough, they will have the technology, resources and experience to help your company through a crisis.
Like eating healthy and going to the doctor, the best way to prepare for the product recall is to simply prepare. Do your research and find a 3PL provider that can help you develop a strategy that can be implemented in the blink of an eye in case of a major crisis. Test and tweak it until you, the 3PL staff, and your employees feel comfortable if such a recall would to occur. Finally, look into investing in recall insurance. Like home and auto, it’s better to be safe than sorry. Recall insurance can potentially cover the large costs of 3PL, customer notification, shipping and the disposal of the damaged goods.
Having a tested and strong crisis management plan can be an opportunity. It could strengthen communication within your company culture, your 3PL provider and give you ease of mind knowing your company is ready for the worst-case scenario.
Overall, a 3PL service can help in receiving, shipping, and even fixing a recalled product with little to zero business interruption. All it needs is a collaborative effort from both parties to help build a strategy best for your company. As we all know, you never know what could happen tomorrow, and the best way to be prepared is to be ready for it––today.
Ever wonder how some products make it to their destination in record time? Better yet, what about the ones that arrive on time and don’t cost an arm and a leg? The Hail Mary strategies behind logistics and supply chain can vary from business to business, but often enough for retail, a major way to lower cost and raise efficiency is through a process called “cross docking”.
Let’s talk about this. More importantly, let’s discuss how it works and how your company could benefit by implementing this logistics strategy.
Cross docking is a logistics strategy where products from a supplier or manufacturer are distributed directly to a customer or retail chain transport with little to no handling time and storage. Think of cross docking as a transaction. On one end is the carrier of the product or in this case a cashier. On the other lies the recipient or retail chain that easily receives the goods without having to wait endlessly and pay for large amounts of warehouse space. Below is an image of how this process works.
Another way to think of cross docking is the wheel of a bicycle. The hub is the supplier of the goods and the spokes are the various retailers that are pulling their goods from the one supplier. This creates balance and efficiency and deletes the need for large warehouses and many distribution centers.
What are some other benefits of cross docking?
- Lower warehouse and storage costs
- Efficient supply loads
- Lower transportation costs
What about disadvantages?
- Need for technology to time and manage shipments
- Need for large fleet of trucks
- Better fit for major retailers and not small business
Within cross docking lies many tactics in how to make it all work to your benefit. If you are a retailer that sells various types of goods, cross docking can use “consolidation” which would take small shipments and compile them into one large transport. Another tactic is when a major retailer that needs to distribute a large amount of product to various stores, but orders the supply in one large bulk. You can “deconsolidate”, which would allow this large bulk of supply to be fed into many trucks at one time, thus lowering the amount of stops that would have to be made by the supplier.
In the end, cross docking is a logistical method that calls for perfect timing and procedure but reaps the benefits of lowering overhead costs and streamlining turn around time. What does this mean for you? Well, it could boost your bottom line and shorten lead-time. For your customers it could mean lower retail prices, always-stocked shelves, and shipments being on time. Overall, if your company’s warehousing, transport or distribution costs are too high or being placed completely on your plate, consider investing in a 3PL service that can help you implement a cross-dock strategy.
The words “logistics” and “supply chain management” can be confusing to those who really don’t know what they mean even though both terms affect almost every facet of our lives everyday. Simply defined, logistics means to get things where they need to be when they need to be. Time and place are major factors to logistics. On the other hand, supply chain management involves satisfying the customer and manufacturers needs by developing an organized way to manage the production and movement of goods. Most people believe that these terms are only associated with industrial equipment and factories, but in fact it applies to most everything, even something as simple as a pencil.
Look around you. If you see pens, papers, a computer, or a cup you are also looking at logistics and supply chain management. All of those items, even though simple in form, are part of a much more complex process. Take a look at the pencil. It’s made of wood, has lead, and an eraser. Each one of those aspects of the pencil has a trail of processes behind it. The wood has to be cut down, shipped, processed, shipped again, cut into a pencil, then packaged and shipped once more. All of those steps take careful organization and planning––services that logistics and supply chain companies thrive in. When these processes are well planned, it both generates profit for the manufacturer and drives cost down for you, the client. So the next time you pick up a pencil to jot down a note, think about what would happen if there wasn’t an organization involved in keeping the costs down to bring that pencil together. Hello $300.00 pencil!
Keeping things running smoothly and efficient is not just about shipping your product out on time. It’s also about keeping the business wheel balanced and alive. Businesses need to make a profit. It is all about equilibrium and supply chain management and logistic services that can help any business, big or small, achieve their company’s goals. Let Draco help you achieve those goals. Talk to us about your supply chain management processes today.