LOGISTICS COSTS GUIDE: Plan easier with logistics simulation
The types of cost attached to a goods flow or to internal goods handling may vary from company to company and may also be expressed in many ways. The various types of cost are expressed and collected as a single logistics cost, consisting of: Buildings; Storage equipment; Materials handling equipment (MHE); Personnel; Administration; Capital cost (stock value) and External transport.
These types of cost cover the items which are attributable to and directly affect the internal goods flow. It is easy to get trapped into only focusing on the cost-of-acquisition of MHE, commonly known as the price. Doing this means that the real total cost of operation (TCO) impact is not considered. Such analysis can be difficult without the right tools. The acquisition cost (price) of equipment can represent less than 10% of the TCO. The breakdown of logistics costs gives a practical basis for obtaining input data for simulation and analyses.
Analysing your operation – cost reduction
The logistics price is the measure which reveals the productivity of the warehouse. By building, testing, and making adjustments to the warehouse in the computer, optimum solutions can be obtained. Different storage systems can be compared. Types of truck can be tested. Rates of turnover and utilisation of capacity can be varied. In brief, the real situation with regard to the work of the warehouse and the goods flow can be analysed. The UniCarriers Logistics Analyser is a tool which gives invaluable information on which to base decisions concerning changes and new investments.
If you are planning a new warehouse, or thinking about making changes to an existing one, it’s possible to use some basic figures about the operation to make an analysis of how effective the solution will be. Using the Logistics Analyser, our sales team are able to work with you to design and simulate an optimal warehouse layout, taking into account your building size, workflows and business demands, before any investment is made.
Download your free PDF guide ‘The benefits of logistics simulation’ here. It’s completely free and will tell you a lot more about the deep insights warehouse simulation software can provide, and how to take your next steps if you’re interested in using it.