SHANGHAHI REALHONG INTERNATIONAL LOGISTICS CO., LTD.

1. Logistics cost of logistical management


Logistics costs in logistical management are like an iceberg. The visible costs are only the tip of the iceberg, while the other invisible costs or costs that are difficult to estimate by the accountant are in the majority, including: raw material logistics, distribution logistics, reverse logistics, loading and unloading costs and plant depreciation, which are closely linked with logistics costs. Although it is impossible to eliminate the huge cost, there are some methods that can be used to help companies save unnecessary costs.


2. Specific methods of logistical management


(1) Real-time production

Do not manufacture too many products in advance or to stock up before the customer places an order. Instead, produce a fixed quantity of products according to the order. Enterprises can also use the economic order quantity system (EOQ) to minimize storage costs.


(2) Instant delivery

Logistical management stores products based on historical information, instead of storing products too early at the consumption location. And they will deliver the goods from the logistics center to customers after receiving customer orders.


(3) Centralized transportation and scheduled delivery

Goods destined for the same area will be gathered together and then collectively distributed to customers, which is called logistical distribution services. Or pre-determine the delivery date with the customer before delivering. For example, if you make a reservation with the customer for the delivery of goods after a week, you can concentrate on a larger amount of transportation within this week, and then uniformly delivery the goods.


(4) Close cooperation with suppliers

Close cooperation with suppliers can help forecast the quality and quantity of raw materials clearly, and formulate accurate ordering plans for downstream customers.


(5) Cooperate with third-party logistics

Choose a third-party logistics company to deliver the goods. The  professional logistics companies can systematically integrate the goods and send them out, implement the concept of centralized transportation, and save the cost of maintaining vehicles and hiring manpower for the enterprise.