11 logistics myths that need to be disproved

We live surrounded by myths. That we only use 10% of our brain, that neurons cannot regenerate, that there is one hemisphere of the brain that predominates over the other and that makes us more artistic or more rational, that listening to Mozart makes us more intelligent… And all they are fake. Therefore, it is not surprising that logistics and supply chain myths also exist.

If you do not want to fall into them and avoid problems, review the eleven that we have collected in this article.

The myths of logistics

1.- We can only improve what we manage, not what we subcontract

In this typical idea hides only a half truth. It is true that we will never have the same control over the things we subcontract or the capacity for improvement and management that we have over our own processes. However, going to a supplier -be it a logistics provider or any other collaborator in our supply chain- cannot be synonymous with a lack of control or ignoring what happens there.

There are several ways to improve the performance of the processes we outsource. For example: clearly establish the conditions of service that we are going to have, create good communication channels between both companies, make sure that we maintain the traceability of our merchandise, agree on the metrics that will measure the quality of the service received, the performance information that they are going to send us, etc.

2.- Planning is expensive and I don’t have time to do it

This evil affects companies the smaller they are. The tightness of SMEs means that they do not have time to raise their heads from “now” to take a longer-term view. Which is a mistake, since what is more expensive than planning is solving the problems caused by the lack of planning.

It is necessary to raise awareness about how much time and money we can save in the long term if we manage to find that necessary space to stop for a moment and look further. Few investments will make them so profitable.

3.- The sales forecast depends on the commercial department

An automatic thought in many companies is that everything that has to do with sales belongs exclusively to the sales team. Therefore, they must be the ones in charge of preparing the company’s sales budget. This mistakenly leaves out many other departments that are vital to defining the objectives. Will there be development of new products, expansions to new markets, significant advertising actions? Without knowing this type of information, we will be asking the commercial department to guess blindly.

4.- All supply chains are looking for the same thing: speed and cost

The idea of “good, pretty and cheap” brought to the supply chain. What this logistics myth does is propagate the misconception that all supply chains have the same goals, when they don’t. Some supply chains seek to optimize costs to the extreme, while others will try to offer premium services out of pocket for the consumer.

And the options do not end here: for example, being able to meet the needs of product customization or host a wide variety of references as close as possible to our recipients are other possible goals of supply chains that go beyond the scheme ” speed and cost.

The problems that a customer has with the shipment of our product will be our problems

5.- The logistics service that my suppliers give me is not part of my product

This myth of logistics, although it is not usually pronounced out loud, still lives in some companies. It is important to make firms aware that the problems that a client has with the delivery of their product will be seen as part of the service offered by said company. And it will not matter that the recipient knows the name and surname of our logistics provider: ultimately the problem is with us and we must answer for it.

6.- The more indicators, the better

We are in the era of Big Data and nobody wants to miss this train. And so much so that we end up making virtue a defect. Measuring and controlling what happens in your company is absolutely necessary, but the facilities that technology provides today means that, in too many cases, we reach paralysis through analysis.

As important as being able to measure is knowing what we have to measure and the purpose with which we do it. Establish the fundamental metrics in such a way that they are relevant, that they really represent the operation of the company and that are, in turn, easy to collect and interpret.

Few things are more frustrating than introducing your teams to laborious processes of obtaining data only to later have the feeling that it is not used, understood or useful.

7.- The means of transport to use always depends on the distance

Another myth of logistics is the automatism when deciding which means of transport to use. If it’s close, road; if it is far, ship; If I want to get there fast, plane. It is true that if these topics have come to be established in our minds it is because, in many cases, practice shows us that they are true.

However, we will do wrong if we do not constantly analyze the options at our disposal. It is surprising to see how many times what seems like the obvious option turns out to be worse than those that require a better search among the different possibilities.

8.- The ideal is to constantly reduce stock

Once again, here the enemy is once again falling into the habit of always giving the same response to any situation that arises. For years the reduction of stocks has been one of the obsessions of logistics, and not without reason. Some of the largest companies can count the savings caused by the reduction of stocks in millions of euros.

However, we must always analyze how far we have to go with this decrease. It is possible that our stock levels have already reached their desirable minimum point, that our demand fluctuates strongly and cannot be predicted with greater precision, or that the risk of depleting our stocks further and falling into a supply break is much more serious than the cost of storing some more merchandise.

As we have already insisted before, acting automatically without considering each specific case can make us upset.

9.- The client is not willing to pay for shipments in the ecommerce

This logistics myth is easily debunked with the arrival of new ultra-express or same-day deliveries, many of which mean that the customer assumes an additional cost for delivery. In addition, even in shipments with ‘standard’ delivery periods, although shipping costs are not charged as such, the client is aware that the price of transport has to come from somewhere.

10.- We cannot sell where we are not

There are not few companies that are self-conscious when it comes to selling products in new places. But it is necessary to remember that the supply chain should not be an obstacle, but a solution that meets the needs of the company. This, however, does not mean that we have to embark on every adventure that comes our way, which could be just as detrimental.

Once again, thoroughly analyzing each situation to see if we can make a real landing in a new territory or market – weighing costs, market situation, keeping the quality of our service intact… – will be essential.

11.- My goal is to simplify the supply chain

The last of the logistics myths on our list is one of the most difficult to internalize. As a general rule, simplifying is a good thing. It makes it easier for us to understand how things work, problems are found more quickly, etc. However, we cannot make it an absolute rule.

In the case of supply chains, complexity is often more than a problem, it is a given characteristic that can hardly be renounced. The logistics of a large company, from the gestation of raw materials to the delivery of the product to the final customer, is going to be complicated practically by definition. While we certainly shouldn’t unnecessarily complicate the supply chain, often our task will not be to remove its complexity, but rather to deal with it.

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Khaterine William

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