What are logistics costs?

Logistics costs include the valuated consumption of personnel, capital and material resources and all assignable imputed costs, taxes and charges. They are classified as follows:
- Capital tie-up of the inventories
- IT costs
- Costs for buying in logistics services, quality assurance and monitoring
- Costs for project management, re-engineering, process management, environmental, safety and security matters
- Space and distance costs for warehouse and other buildings
- Costs for technical equipment, loading engineering, hoisting and transportation
- Handling costs for warehouse and production
- Internal planning costs
- External planning costs
- Internal shipment costs
- External shipment costs
- Costs of logistics / production planning and control
- Packaging costs
- Shipment costs
- Costs of incoming order handling
- Costs of Supply Chain Planning
- Costs of Supply Chain Execution
Costs of Supply Chain & Compliance Monitoring
- Costs for deficient quality of the logistics tasks such as volatility costs, contract penalties, follow-up costs from bad investments, lost sales, return deliveries after complaints, non-compliances, etc.

Beaten paths are out.

Operational and managerial deficits. Market conditions have changed. Beaten paths and old magic formulas are out. What has remained in many enterprises are operational and managerial deficits such as incompatible supply chain or logistics structures, non-matching process environments, cross-corporate inefficiency, a lot of interfaces and rising logistics costs (cf. Info Box).

Business deficits. Our own experiences, which are fully endorsed by scientific studies, show that the share of logistics cost (measured against the total expenses of an average industrial business) has grown to 17 – 24 percent, with rising tendency! With logistics costs of this magnitude, the pain threshold is reached in many businesses.

Typical problems and issues. Many enterprises in central Europe have either failed to realize or underestimated the growing significance of logistics over the last years. This is reflected in many problems and issues we have encountered over the years, for instance:

unneccesary capital tie-up
excessive throughput times
no clear view of available inventories and resources
growing number of networked partners difficult to control and monitor
inadequate support by PPC in the network-based planning von quantities, capacities and times
difficult integration of partners as a result of different IT systems, IT levels and data volumes
unnecessary rerouting of information and decision-making channels as a result of decentralized added value activities
disproportionate growth in logistics costs caused by new cost drivers and cost traps

The offer of support. These and similar problems and issues prevent many businesses from realizing their true potential. 4PL Central Station Group offers pragmatic, down-to-earth support in implementing the new thinking and the new actions. We’re only a telephone call away. Use our power for your performance. We are here to help.

4PL - Excellent Logistics Solutions.

For more information on the 4PL philosophy, on the 4PL mode of work and on the business model 4PL Implants for Industry®, contact HQ of 4PL Central Station Group in Basel, Switzerland. Click “Contact” above and send us your enquiry.