How to run your own Logistics Business - Kotak Bank
  • Personal
  • Business
  • Corporate
  • Private Banking
  • Privy League
  • NRI Services
  • Investors
  • Personal
  • Business
  • Corporate
  • Private Banking
  • Privy League
  • NRI Services
  • Investors

Over 50 million people are employed by the Logistics industry in India. It is believed that a lot of businesses can perk up their earnings simply by cutting costs and reducing their turnaround time (by having in place a well oiled logistics network). While logistics in India has a huge scope for growth, there are challenges associated with running it — one arising on account of the scale of business management required, and the other, because India predominantly is a cash economy. So it is key to have a strategy in place, which also provides a window for improvisation and need-based adjustments.

Here are a few tips that can help your logistics business be more effective:


Figure out an efficient logistics strategy
Good coordination and management is key to running a successful logistics business. Here are a few techniques to adapt if you haven't already done so, to increase the productivity and reduce the risks in your business:

  • Demand-driven supply chain - More and more industries are following the demand-driven supply chain as it reduces the risks and increases the sales volume. The way it works is, unlike the built-to-forecast strategy, the customer demands from the retailer, who in turn demands from the wholesaler, who demands from the manufacturer, who reorders the raw material. This way, the waste is minimal and there is a guaranteed sale.

  • Leverage - Predictive or real - The concept of leveraging your predictive volumes to reduce price seems to be contradictory with the above, but if you look closely, they are actually very much in sync, especially in logistics industry. If you cater to demand, then you minimize waste: but if you restrict yourself to just delivering basis demand and take orders in small amounts, then your cost shoots up. So, in order to reduce the cost, take a leverage (which may be predictive in nature) from your suppliers and vendors. Once you have purchase orders, you can easily manage your inventory according to the demand. Many of the industry's successful players have been using this technique.

  • Hire the right people - Your people will generate business for you at the ground level. And in logistics business, since building relationships is more critical than the technical aspects, your communication skills could actually earn you greater business. So hire the right people, who will along with building a reputation for your brand, earn you good faith and more business.
     

Read Also: How to Finance your business

Sales and Operations Planning
This is perhaps the most basic of things, but overlooked the most, when it comes to logistics. Sales and Operations planning or S&OP basically means a setting where all primary functions of a team come together to discuss, review and plan their business activities. These primary functions include sales, marketing, product management, manufacturing, warehousing, finance and transport. It is imperative for the team to collaborate and have a communication channel — either physical or through digital platforms—because, in logistics, the whole game is around communication.


Like in any business, in logistics too, there are chances of loss occurring. It could be in terms of money or wastage of products. It is important to manage these negative outcomes, adjust to the market when required, and keep patience. Because sustainable businesses are not built overnight.

Read Also: How to grow Healthcare and Pharma business

Latest Comments

Leave a Comment

200 Characters


Read Next
how-to-run-manufacturing-business-seamlessly

How to run your Manufacturing Business - Kotak Bank

Sustainability is essential but difficult when the industry is as old as manufacturing. You can probably be ahead of the curve.

how-to-grow-your-manufacturing-business

What to keep in mind while growing your Manufacturing Business - Kotak Bank

Don't know how to expand the heavy duty manufacturing factories ?

how-to-start-your-own-manufacturing-business

How to start a Manufacturing business

Is Manufacturing your forte, but cannot wrap your head around the business aspect of it?

Load More

Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.