The current economic environment is challenging for many Australian companies. According to IBIS World, industries such as Pharmaceuticals, Wholesale Trade are facing decreasing profit margins with increased competition from the consolidation of major players.
In this environment, managing Transport & Logistics costs has become essential for improving margins and profitability.
Major industry players invest considerable funds in Transport & Logistics technology. These investments allow those companies to become even more competitive and, as a result, allow them to acquire higher market share from smaller players.
To win the battle with huge enterprise and keep or gain market share, Australian small and mid-size businesses need to review more frequently the effectives of their Transport & Logistics processes, and invest in simple technology solutions where processes could be improved.
However, companies face several challenges to implementing these actions. Among those challenges are:
Resource shortages – developing and implementing systems are perceived to be expensive and time consuming preventing small/medium companies from investing in development.
Unwillingness to adopt new technologies – in some industries, management may not be ready to adapt to the changing technological environment. Some companies continue to use manual processes for managing Transport & Logistics processes where technology solutions can help . Implementing technology often this means changing employee habits which can be difficult.
Inability to compare and chose the best service – experience shows that majority of companies can’t monitor their Transport & Logistics costs or are locked into contracts or systems that prevent them from choosing the best providers for particular needs or destinations. It’s not surprising – with mountains of data from numerous shipments, and without the right skills in the team, it’s hard to analyse the data, the options and take the appropriate action.
The industrial revolution has been replaced with the technology revolution. To be competitive and win future market share, companies must be part of this revolution. The first step is to recognise that there are barriers to overcome for small/medium businesses and start examining the options to be more cost effective and efficient.
This post is an introduction to a series of articles designed to help small to medium sized businesses to identify where their Transport & Logistics processes and systems can improve, so that they are able to compete more effectively for business.
By Yury Popov