Challenges of Electronics Logistics
Technology November 9, 2009
Whether your business involves consumer electronics or industrial electronics, both present unique challenges with respect to choosing a logistics provider. Challenges in electronics logistics stem from the fact that anything with memory or a processor has the shelf life of food, requires the same security as a pile of cash and needs the same protection as your dishware during a move. These are all realities of your business, and your third party logistics provider (3PL) should already have them covered. If they don't then it is likely in your best interest to move on.
Here are a couple of other factors you should consider to ensure that you and your electronics logistics provider are working together for the best results.
The Seasonality of Electronics Logistics
Probably the number one reason that any electronics provider uses a 3PL is seasonality. You need the most inventory and have the bulk of your orders around the holidays, and usually September is when things start to ramp up. If you are running your own warehouse and need 10,000 square feet of space at Christmas time then you need to have a 10,000 square warehouse to maintain all year round. A 3PL has the flexibility to provide you with the space you need only when you need it, and this can save a lot off your bottom line.
When looking for a partner in your electronics logistics, consider the maximum space you would need in any given season, and make sure they have it. Also take a look at the other clients in that warehouse and consider when the 3PL's other customers have their peak times. There is nothing worse than a logistics provider that only has clients who get busy at the same time you do. This creates staffing issues, so they may bring in temporary workers who may not know your product as well as someone who deals with it daily.
Part Numbers in Electronics Logistics
An effective electronics logistics provider knows your product and has a process to work with your part numbers to maximize your efficiency. If, however, they must match descriptions on boxes to a piece of paper, their process becomes far less effective. For example, to you, a 4GB Black MP3 player and a 2GB Red MP3 player are two completely different items that you couldn't even imagine confusing. To your logistics provider, they are two boxes with part numbers, and if two products have the same part number then you're just asking for problems. Everything that has a different component, colour, shape etc. should have a unique part number that is clear in your orders. This can save you a lot of time and headaches down the road.
Technology in Electronics Logistics
Cutting edge technology isn't something that is usually discussed when talking about warehouses, forklifts and transports. That technology is out there, but it's expensive; and with the margins on electronics as tight as they are, it is probably not in your budget. Consider what is most important to you in a logistics provider and work to those parameters, rather than what would be nice to have. Online order processing, web inventory, and EDI (Electronic Data Interchange for monitoring your product) can be more important and useful than the latest in bar-coding technology.
Find a Third Party Logistics Provider that Grows with You
Set your goals and make sure the partner you choose can work and adapt to those goals. If your end game is to be in every Best Buy across the country, then make sure that the 3PL is flexible enough to accommodate your needs, and ensure that they have experience at that level. Once you get a new contract that will be increasing your bottom line and making you a much bigger company, ask your electronics logistics provider if they adjust their rates as you grow. They love growth as much as you do as long as they can handle the volume.
