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Data-Driven Planning blog 1-08-21

January 8, 2021

Data-Driven Planning and Logistics Help Businesses Avoid Common Mistakes


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When building a business based on physical goods, mistakes can be costly. Many threats to a new business, like competition, demand patterns, or technical problems, are external. But some pitfalls can be controlled—and avoided.

In a recent webinar, Flexport talked with Marcy Alstott, Managing Director at On Tap Consulting, to explore how to avoid common missteps and enable rapid growth.

Mistakes and Solutions

Alstott identified three areas of supply chain management where young companies can falter:

  • Product complexity
  • Lack of rollout planning
  • Poor cash control

Product Complexity

Predicting demand can be tricky, especially prior to a product launch. Companies might develop too many of one variant or not enough of the most popular ones. When this happens, companies can undergo losses or miss sales opportunities.

Recommendation: Postpone product differentiation until data is available. Once companies can gain visibility into SKU-level data, they’re in a better position to expand colors, power options, or other variables.

Rollout Planning

Recommendation: Alstott asserts that deep planning is required. From material lead times to various geographic regulations, a variety of factors can stall product rollouts—or drain coffers before the goods are even out the door. The more businesses can set up real-time communication with suppliers, the lower the risk.

Recommendation: Use a centralized platform to support communication and share documents. Doing so can streamline workflows and make it easy for companies to find opportunities for negotiating better terms.

Cash Control

When rollout planning is taken for granted, companies risk incurring logistics expenses—for example, when demand is in a different geography than inventory.

Another mistake is leaving logistics planning until too late. Rushed shipments can cause inaccurate cost models across the business. This becomes especially significant if a company suddenly has to cover expenses like expedited airfreight.

Recommendation: Instead of racing for space, start early, using historic shipment data to plan cost and timing. Use landed cost analyses, available in the Flexport platform, to refine strategies quickly after launches or expansion.

In some instances, inexperience can take a toll. For example, some companies fail to account for details, like carton or pallet specs, or unexpected delays, like rolled cargo. But by bringing in expertise and technology, businesses can safeguard against costly mistakes. To gain deeper insights, watch the full webinar, Logistics Launchpad: Skip the Classic Mistakes and Embrace Growth, on demand.

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