The 7 R’s of Effective Logistics Management
The Chartered Institute of Logistics and Transport, an international organization for supply chain, logistics and transportation professionals, defines the seven R’s of logistics as “getting the right product, in the right quantity, in the right condition, at the right place, at the right time, to the right customer, at the right price.”
And, truth be told, that is the goal of logistics management.
1. Right product:
Objective #1 is delivering the product that was ordered according to specifications of color, size, brand and Next, one should also consider an automated maintenance plan where manufacturers use data to send a “just-in-time” replacement part, or something else that the customer may have not specified, but needs in stock. The ultimate goal and necessity is to be aligned with the buyers’ wants and needs regarding products.
2. Right quantity:
Let’s imagine an item can be purchased as either a single unit or in packs of 12, which can also be considered a unit. Now let’s put that same situation on a larger scale – a manufacturer may sell parts in a single box containing a few products or as a pallet of multiple boxes. Getting the quantity right the first time demands clarity in how inventory is listed as well as proper picking and packing.
3. Right condition:
New, used or refurbished, customers expect a product to function as intended; quality assurance is a must. Additionally, return shipping processes should be simple and convenient for customers.
4. Right place:
Providing tracking to ensure accurate addresses and the receipt of the items is essential in today’s hectic frenzy, and it’s actually quite simple to put in place. A package that is never received and must be replaced costs a company two times, and damages the customer’s trust and relationship with the brand.
5. Right time:
From the customer’s perspective, timing is everything. Whether it’s a consumer ordering a birthday gift or a manufacturer that needs a particular raw material to meet its schedules, late arrivals may end up costing the company or be returned as no longer needed, leading to a loss in revenue.
6. Right customer:
Order mix-ups, address errors and other mishaps communicate a lack of respect for the customer and inattention to detail. Implementing an ERP system to automate outbound logistics can minimize errors and maximize a company’s supply chain execution.
7. Right price:
Pricing is perhaps the most important part of logistics, as businesses look to make profits and customers look to make wise purchases. Make sure your pricing is competitive for the geographic area and the industry to turn your inventory regularly and at a good margin. It is also imperative to adjust pricing—up or down—according to demand. To succeed here, companies need continuous insights into profitability ratios and unit margins.
If you are interested in learning more about how logistics management could help streamline your organization and improve operational efficiency, please submit the form below to be connected with our in-house logistics experts.
Director of Marketing & Media, C.L. Services