Pictured: Grant Marshbank, chief operations officer at VSc Solutions

With the fuel price now at its highest level in South Africa, logistics costs for companies are set to rocket.

This will inevitably put pressure on companies to find cheaper ways of doing business. Supply chain technology and consulting solutions company, VSc Solutions, suggests five ways in which companies can start reducing their logistic costs immediately – and negate a substantial portion of the fuel price increase.

Grant Marshbank, chief operations officer at VSc Solutions says, “The key to securing savings of anywhere from 10-25% on logistics costs – savings that will endure long after the fuel price drops – is to focus on greater efficiencies in terms of distribution.”

“There are five focus areas for companies to pay attention to and these include applying smarter strategies, optimising routes, ensuring proper execution, automating the process and then integrate the systems.”

“Applying smarter strategy through network modelling allows one to determine the most efficient way of doing business. This exercise is vital for determining whether one’s current operation is optimised, and if going after certain new business will be profitable.”

“Ensuring that the least number of vehicles drive the least amount of kilometres is the goal of route optimisation.”

“Next a company needs to ensure efficient routes are being used.”

“Companies then need to automate the processes which will not directly decrease fuel costs but removes inefficiencies that result in cost and time savings. By integrating data from a company’s ordering system with a driver’s smartphone, acceptance of goods can be automated and an electronic proof of delivery sent immediately, enabling invoicing to take place that much faster.”

“Lastly a company needs to integrate its reporting systems so they can transfer data seamlessly, enabling more effective reporting that gives complete visibility of the entire supply chain in real time. “

Concludes Marshbank, ”The typical savings when adopting the aforementioned concepts are between 10% and 25%.   Most of these solutions can be implemented quickly and this will result in a favourable return on investment for your company from the very first month.”