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Three Common Distribution Mistakes Most RetailACers Make

In this guest post on Logistics Viewpoints, Chris Merritt lists three common mistakes in distribution that retailers are prone to make. The first (and probably the most prevalent) is using last year’s cost metrics to predict next year’s cost. As Merritt explains, basing the future on the past (at least in our economic environment) is no way to do business. Rising fuel costs, mandates for cleaner, more efficient engines, and staggering transportation costs must all be accounted for in future planning: The best way to circumvent the problem? First, allocate more money to transportation costs going forward. Second, look for creative ways to offset rising transportation costs. One way is to zero in on your distribution network. While transportation costs are spiraling upwards, distribution costs are expected to remain flat or grow at the pace of inflation. Think about where your distribution centers are located. Are too many located too far from stores? If so, consider repositioning them to minimize driving distances. Model an ideal distribution network and allocate enough funds for accelerating fuel, wage and equipment costs. Failing to factor the rising costs of transportation into budgets can add more pressure to already-squeezed margins. Merritt also explains how thinking that the jam-packed shipping method (putting as much product into as few shipping containers/ships as possible) is the best way can lead companies to lose money, and how creating a single order process can save millions.

About Matthew Kabik

Matthew Kabik is the former Editor of Computer Aid's Accelerating IT Success. He worked at Computer Aid, Inc. from 2008 to 2014 in the Harrisburg offices, where he was a copywriter, swordsman, social media consultant, and trainer before moving into editorial.

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