Management and Administration of Logistics, It’s Importance

The correct management and administration of logistics SMEs acquires a fundamental role for those merchants who want to be successful in current and future market demands. On the one hand, SMEs have a great weight in the business world. In fact, in Chile, SMEs represent 96.6% of market sales . But on the other hand, this same situation makes the level of competitiveness for small and medium-sized companies increasingly demanding. 

For this reason, it is necessary to become aware of the importance of the management and administration of SMEs , and how to carry them out in the most strategic way possible, both to optimize traditional logistics and eLogistics .

Importance of the management and administration of SMEs

According to data from the United National Trade Union Confederation of Micro, Small and Medium Enterprises, Services and Crafts (CONUPIA), more than 200 thousand SMEs were going bankrupt in June 2020 in Chile. This is mainly due to the high risk factors for SMEs in the face of the global crisis that we have been experiencing due to the COVID-19 pandemic.

So, taking into account that SMEs represent 70% of the labor market , the correct management of these businesses is something that directly influences society at the level of economy and employment. 

In this panorama, and going into more detail, the main importance of the management and administration of SMEs has to do with the fact that only by making good strategic decisions is it possible to make the most vulnerable businesses (small and medium-sized ones) survive against possible new crises such as the one we are experiencing today, as well as those that develop greater business competitiveness in the market, improve their levels of productivity and profitability, and thus may continue to be the main source of employment in the different countries. 

That said, in terms of logistics companies , the importance of the management and administration of SMEs is even much more related to the market, since logistics decision-making is something that can directly influence the habits of customers. consumers and in taking advantage of the company’s opportunities .

Good management and administration of logistics SMEs can increase sales levels and demand for critical services such as home delivery, in the case of e-business .

Management and administration of the Logistics to satisfy the client

When it comes to optimizing the management and administration of logistics SMEs to ensure customer satisfaction, reference is made to the application of customer-centric business strategies . In other words, the company must focus all its efforts on improving the consumer’s shopping experience, since by doing so it manages to boost sales and loyalty levels.

Keep in mind that, according to the PwC Experience is everything study , one in three customers may leave the relationship with the brand after an unsatisfactory experience. That is why some key elements that you should always consider in the management and administration of the SME are:

  • Customer service available at all times.
  • Reduction of uncertainty about the order.
  • Punctuality in the delivery of the products.

Fortunately, there are technological tools that make it possible to improve the management and administration of the SME regarding its relationship with the client.You can search internet for logistics management tool,there are number of good tools available.

Management and administration of the SME to control staff

On the other hand, the management and administration of the logistics SME to maintain good control over its personnel has to do with identifying and overcoming any problem that may affect the performance of carriers. Ie the driver being the only person who has direct physical contact with the customer, there is a risk that poor management can generate an uncomfortable experience for the customer. 

In this sense, the ideal within the management and administration of the SME is to develop training programs for carriers, with the aim of making them the best representatives of the brand by offering excellent quality customer service and attention. Similarly, the company must measure the performance, efficiency and commitment of each of the drivers.

Keep in mind that the inefficiency in the management and administration of the SME can be expressed with the following symptoms:

  • Delays in completing the routes.
  • Unauthorized stops.
  • Use of transportation for personal purposes.
  • Unplanned detours.

To improve the efficiency in the management and administration of the SME in terms of its staff, the company can also use the LastMile software , since this platform is capable of monitoring drivers in real time, thanks to its satellite tracking functionality that it performs through the GPS microsensor that is built into smartphones that are used by carriers.

In this way, as a logistics manager you can be aware of the performance, efficiency and responsibility of the driver. 

Management and administration of the SME to reduce costs

When a small or medium-sized business works to reduce costs, they often forget about hidden costs. For this reason, in the management and administration of the SME you must identify those processes that, however minimal they may seem, unnecessarily consume the capital of the company. 

Some examples are:

  • Fuel consumption costs when traveling longer than necessary routes.
  • Costs for shipping exceptions or failed deliveries.
  • Costs due to lack of monitoring on the use of transport units.
  • Costs for resolution of contingencies that were not foreseen.

Each of these are factors that may be increasing the cost of the service for both the client and the company; either because of routes that consume a lot of time and fuel, because of a badly calculated direction or because of the lack of contingency plans. All this puts the quality of the service at risk and is a consequence of poor management and administration of the SME. 

So, to improve the management and administration of the SME on cost reduction , the company can rely on these tools . This is a system specialized in the planning and optimization of delivery routes, whose objective is to guarantee fast shipments, identifying the best available routes and anticipating possible difficulties that may arise during the delivery processes.

In this way, with the use of PlannerPro you can properly manage and administer the costs associated with fuel consumption, vehicle wear and tear, shipping times, among others.

Management and administration of the SME to improve processes

Finally, the management and administration of the SME to streamline its processes is a task that consists of using different mechanisms that allow identifying and solving any operational weakness.

For example, when it comes to electronic commerce , the Study on online sales in Mexico indicates that 84% of buyers prefer home delivery. This means that within the management and administration of the SME you must identify those elements that prevent you from making 100% successful deliveries. 

In other words, with systems like LastMile and PlannerPro, digital companies can improve the management and administration of delivery routes to guarantee:

  • Faster deliveries.
  • Increase in staff productivity.
  • Better resource management .
  • More satisfactory experience for the customer.

In conclusion, optimizing the management and administration of the logistics SME requires technological resources that contribute to a better relationship with the client, a monitoring of the driver’s performance, as well as better planning of resources and strategies in the event of any contingency.

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