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Staying on a Logistics Budget in the Energy Sector

10 Tips for Staying on Budget and on Schedule when Sourcing a Logistics Company in the Energy Sector

Excerpt from Inbound Logistics

The demand for energy is rapidly increasing around the world. From power, nuclear to renewable energy sources, companies need to continuously innovate while delivering value to the world as demand rises. Getting the systems, infrastructure, and materials from one place to another is not an easy task, especially considering the time and budgetary limits of global energy companies. The following 10 tips will help your business stay on budget and on schedule when sourcing a logistics partner:

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1. PLAN AHEAD. Determine your predicted logistics volumes in Breakbulk, general cargo or courier. Positioning this correctly can yield significant discounts in freight costs, the outcome of which can help improve bottom line cash and competitive advantage.

2. COLLABORATE REGULARLY. Understand the essence of Sales and Operations Planning (S&OP), a strategy where all of the primary functions that impact or are impacted by the regular activities of the business (Sales, Marketing, Product Management, Manufacturing, Warehousing, Procurement, Finance, Transportation) come together to review, discuss and plan business activities.

3. GET AN EARLY START. Incubate logistics planning early in the process alongside project estimating.

4. BREAK OUT OF SILOS. Ensure all parties commit to move past functional silos. Logistics must, over time, become an ingrained component of the company’s culture.

5. BE PERFECTLY CLEAR. Ensure absolute clarity on the purpose of the logistics function in the organization. Investing in developing and clearly articulating the vision of logistics in support of the overall operation are fundamental steps in defining optimum logistics strategies.

6. AVOID OFFICE POLITICS. Don’t allow internal company politics to affect logistics. Make sure your logistics managers, whether in-house or outsourced, are on-board with how logistics supports your strategy and empowered to make decisions without asking permission.

7. SELECT PARTNERS WISELY. If you choose to outsource your logistics operations, choose an organization that will work hand-in-hand with you so you keep all your front-line carrier relationships and control.

8. EXPERIENCE COUNTS. Acquire an experienced logistician or 3PL that is well connected to the logistics/supply chain world and has a solid financial acumen.

9. ONE SIZE DOES NOT FIT ALL. Work with a logistics partner that has the flexibility and capability to develop custom IT-based solutions to meet your precise needs.

10. CULTIVATE PARTNERSHIPS. Work with an organization that doesn’t see you as a “project,” but as a “partner,” and who will share their best practices and understanding of emerging trends. This partnership-type relationship ensures success within your logistics operations.