3 Questions Featured

8:00pm EDT April 25, 2009

George Hynes is president of Logistic Edge LLC, a third-party logistics company based in Southern California. He focuses on delivering logistics services to retail suppliers through the efficient use of technology. Prior to founding Logistic Edge, Hynes spent more than 10 years managing supply chain operations and information technology for a nationally recognized manufacturing company. He focuses on cost-effective and efficient warehousing to assist customers in achieving high vendor compliance rates for their retail customers, such as Wal-Mart, Staples and Sport Chalet.

 

Q. How can transportation technology improve a business’s bottom line?

When Web-based software is used in logistics, customer service is improved and sales go up. Web-based software means customers can view inventory online that is housed at another company’s warehouse. They can also place orders and see where their goods are in the transportation cycle. This is an efficient and less costly method to monitor goods than doing it all in-house and purchasing your own software.

Q. What can a company add or eliminate to its transportation strategy to save money?

If you warehouse your goods with the company responsible for ensuring shipping, you will reduce lead time due to efficiency. This allows the goods to enter the retail chain as soon as possible or reach their destination faster. When you leverage the expertise of a third-party logistics firm, you can put the responsibilities of vendor regulations in their hands and out of yours. This can also turn fixed costs, such as the costs involved in operating a warehouse, into variable costs. If you have seasonal merchandise, you don’t need to fill 40,000 square feet year round, you only need 5,000 — and then you only pay for what you use with warehousing with a third-party logistics firm or outside warehouse.

Q. What advice can you provide other companies looking to reassess their in-house shipping process?

A company should see if they are effectively controlling their costs. Investigate whether a third-party logistics firm would be in their best interest in helping them do this. Consider the demographics of where they are located and where their customers are located. If you need to have your goods close to customers to reduce shipping fees, housing them with an outside firm will allow you to do that without incurring the expense of purchasing real estate yourself.