More companies are finding that logistics software can help them streamline many of their processes and can help their production cycle run more smoothly. Logistics software essentially is a program designed to help businesses manage the multitude of elements that go into the production process, including arranging for the delivery of raw materials to shipping finished products to consumer outlets. Just as with other software related to supply chain management, the overall goals of logistics software are to boost profit margins and reduce cycle time in order to give the business a competitive advantage in the market.
Logistics software's focus is on transportation, which can be one of the most costly aspects of running a business, particularly with increases in shipping and gasoline prices. The software allows businesses to automate the management of mass quantities of transportation-related data so that it can be analyzed and so that the company can make informed decisions based on that analysis. For example, if one trucking company can make a delivery in three days but charges more than the a second trucking company that would take five days for delivery, the software can determine for the business which trucking company would be the best to use. Doing those same type of calculations manually could be time-consuming and frustrating endeavors.
There is a wide range of benefits achieved simply by using logistics software. First, it can help manufacturers get their products out to the public faster. By improving the delivery speed of necessary goods and by assisting in the selection of the most efficient shipping service, logistics software can cut days and even weeks off of the production cycle and delivery times. Additionally, logistics software prevents human error. Completing the complicated calculations that were once necessary to analyze transportation data was not only time-consuming but was also all too frequently subject to human mistakes that often ended up costing the company a great deal of money. Since those calculations are now completely handled by the software, those problems are no longer an issue. Furthermore, logistics software can help businesses save money. They can compare the rates of a plethora of delivery agents and shipping services to help businesses locate the most cost efficient based on more factors than price alone. Plus, the software help businesses determine which method of transportation will be most efficient in terms of price and time for their products.
Although these benefits are possible for all businesses that want to use logistics software as part of their overall supply chain management strategy, companies are adding this software to their strategic vision in different ways. Some companies have chosen either to develop their own logistics software with the assistance of skilled IT personnel who understand the complex algorithms involved in the analysis of the data. Obviously, the benefit of this approach is that the company can create a software program that is designed specifically to fit their needs instead of having to conform their needs to a pre-designed program. A drawback of this approach, however, is cost and time. Developing a logistics program requires top minds and lots of patience; none of which comes cheap. For those reasons, the average company is content with purchasing software from a vendor and implementing it into their current system. While this can often be difficult and time-consuming as well, it is less expensive than developing the software in-house.
On the other hand, other businesses have chosen to outsource their logistics software needs to third parties that specialize in managing transportation and related needs. For these companies, they find it more cost efficient to turn this aspect of the supply chain over to an outside firm instead of managing it in-house. One reason for that preference is that many third-party logistics software providers can also offer other value-added services, such as warehouse operations and logistics accountability.