SMEs account for 99.9% of all companies in Spain. With more than three million SMEs, according to the Ministry of Industry, it is easy to see that they are the industrial heart of the country. However, this does not prevent them from having to fight every day to overcome their difficulties. As logistics operators, today we wanted to focus on the most frequent problems that SMEs encounter when managing their logistics.
Common logistical failures and problems in SMEs
Lack of stock control
Many of the difficulties that we are going to see are directly related to the lack of resources. Fortunately, advances in technology are making solutions such as warehouse management and control software more affordable for SMEs.
Despite this, there are still many who keep track of their stocks in a non-professionalized manner. There are even those who simply entrust themselves to good fortune so that their lack of stock control does not cause them problems due to losses, lack of merchandise to send to customers, etc. Or they resign themselves to searching by heart where the products their customers have just bought from them are located in the store.
Not giving the importance it deserves to transport
Most SMEs treat their product with the greatest of care. They perfect it down to the last detail to have their customers completely satisfied and spare nothing to achieve it. However, sometimes they forget the importance that transport and logistics have for their customers, who understand that they are part of the product itself, identifying its quality with the quality of the brand itself. If our transport provider fails, it will be our brand that is failing.
Even if your company has less time to dedicate to its logistics and is not part of the central core of its business, you must be clear about the importance it has both for your clients and for your own internal functioning.
Underestimating the cost of not planning
Not taking transport into account sufficiently affects this new problem. If we do not spend enough time planning our logistics, our costs will surely be affected. We will pay for urgent services due to lack of time, we will incur unnecessary storage costs for our needs -or for the needs that we would have with fine-tuned logistics-, etc. In this case, what you save in time by not planning, you will pay for in cost.
External and internal traceability
Many SMBs have precarious control over the location of their products, materials or orders. Both before leaving your facilities and after doing so. Having this information accurately will allow you to better serve your customers and avoid disappointment.
SMEs certainly don’t have money to spare. That’s why they often try to cover all possible tasks to tighten their belts. And to avoid subcontracting a logistics operator -although it could be the right solution- they end up assuming their work.
In the case of the warehouse, it is not only the lack of software, personnel or equipment that can put us in a bind. It is not uncommon to see how companies allocate spaces that are too small or poorly prepared for their storage tasks and instead of locating the merchandise efficiently, they end up stacking it precariously and inefficiently.
Once again, financial straits sometimes take their toll. It is not uncommon to see workers who dedicate most of their day to a task and are also “the logistics” or “the one who deals with the shipments”. It is easy to understand that these people cannot specialize at the same level as a person who dedicates all day to these tasks and, therefore, they are more likely to get the job done than to really optimize our company’s logistics.
Competitiveness problems due to lack of scale
The more volume we have, the easier it is to be efficient in our processes. A fact that is accentuated when we talk about secondary processes in our companies, as logistics is usually for an SME. For this reason, an easy way to gain competitiveness through economies of scale is outsourcing, since the logistics operator we choose will make us benefit indirectly from its volumes.
As logistics operators, it is easier for us to invest in personnel, machinery, software and facilities so that our clients can take advantage of it, avoiding large outlays that they could not allocate to their logistics.
Lack of quality indicators
“What is not measured can not be improved”. There’s a good reason this phrase is one of the most used in logistics conversations: it’s true. Without indicators to measure what we are doing, our attempts to improve will go blind. Or, even worse, we won’t even know we have to improve it.
Are we efficient in the preparation of our orders? How much merchandise do we lose? What percentage of shipments are delivered on time by our transportation provider? What if we start counting the time since we received the order? In which part of the two is the problem, in our tasks or in those of the supplier? Interestingly, there are also many high-volume companies that don’t track their own performance in depth either. Despite this, it continues to be a more common problem in SMEs.
Another of the most difficult leaps for SMEs: professionalization when it comes to forecasting their volumes. Introducing systems that help us have a fine-tuned prediction of our movements will prevent us from facing real nightmares for our logistics: shortages for us or our clients, lack of personnel, excessive workload, etc.
In order to calculate our demand with greater certainty, we cannot limit ourselves to looking at last year’s demand and increasing the percentage that we would like to grow. Something, unfortunately, more common than it seems. How is our sector this year? What influences can increase or decrease sales this season? Have we launched any product or advertising campaign that makes us anticipate more demand?
Information management and systems integration
Traceability, stock control, demand forecasting, order management… If some of these tasks sometimes get stuck for SMEs, they suffer even more when integrating them with each other. We need to correctly manage the flow of information and facilitate it from order entry to delivery, so that it can be known by the different departments and by the people affected.
Automatically choose the most expensive or the cheapest option
“We want to give the best service to our customers, so we will always use the fastest pallet shipping option.” This type of reasoning is very common in companies, and even more so in SMEs that do not find the time to analyze their logistics but are clear that they want to provide quality to their buyers.
Choosing the fastest or cheapest option must always depend on the specific needs of each shipment: what we send, where, when we really need it to be there, how long it will take to put it in the hands of our logistics… If each client is world, each shipment is too.