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Logistics costs: definition & important aspects for buyers
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Logistics costs in a nutshell:
Logistics costs include all expenses for transportation, storage, handling and administrative processes in the supply chain. The systematic recording and optimization of these costs is essential for purchasing, as they often account for 10-15% of total procurement costs and offer considerable savings potential.
Example: A medium-sized company reduces its annual logistics costs by 15% from 450,000 euros to 382,500 euros by consolidating supplier locations and optimizing transport routes, whereby the main savings are achieved by reducing transport trips from daily to twice weekly.
Contents
What are logistics costs?
Logistics costs include all expenses incurred in connection with the planning, control and implementation of material, goods and information flows. These include costs for transportation, warehousing, handling, packaging and information processing. They are a major component of a company's total costs and have a significant influence on its competitiveness on the market.
Core elements of logistics costs
Importance of logistics costs in purchasing
In purchasing, logistics costs play a decisive role in the overall assessment of supplier evaluation and offers. By specifically analyzing and optimizing these costs, companies can achieve considerable savings. A deep understanding of logistics costs enables purchasers to adopt better negotiating positions, make supply chains more efficient and thus increase the company's competitiveness.
Logistics costs: from manual cost control to digital cost management
Based on the theoretical understanding of logistics costs, it is clear that their effective management is crucial to a company's competitiveness. In practice, inefficient logistics cost management leads to higher overall costs and lower profitability. Traditional methods are reaching their limits, which is why a shift towards digital solutions is necessary.
Old: Manual cost control
Traditional approach: In the past, logistics costs were often recorded and analyzed manually. Companies used spreadsheets and paper-based systems to track costs for transportation, warehousing and packaging. This method was time-consuming and error-prone, as data had to be entered and updated manually. There was also a lack of real-time information, which limited the ability to react to market changes and made it difficult to identify potential savings.
New: Digital Cost Management
Digital Cost Management: The modern approach relies on digital technologies to optimize logistics costs. By using ERP systems, automated data collection and analysis tools, companies can monitor cost data in real time. AI in purchasing and machine learning enable precise forecasts and the identification of cost drivers. This leads to greater transparency, faster decision-making and a significant reduction in logistics costs of up to 20%.
Practical example: Use in the consumer goods industry
An international consumer goods manufacturer implemented a digital cost management system that integrated all logistics cost points. Real-time analysis of transportation routes enabled unprofitable routes to be identified and adjusted, resulting in a 15% reduction in transportation costs. In addition, automated inventory control enabled a 10% reduction in warehousing costs. Overall, the company increased its profitability and significantly improved its ability to deliver.
Conclusion on the optimization of logistics costs
Logistics costs are a decisive factor for the competitiveness of companies and must be considered holistically when making procurement decisions. Focusing solely on purchase prices is not enough - only by analyzing all cost components such as transport, storage and customs duties is it possible to make well-founded strategic decisions. Digital tools and systematic process optimization enable companies to manage their logistics costs effectively and achieve sustainable savings. The key to success lies in the continuous adaptation of procurement strategies to changing market conditions and new technological possibilities.
