CeMAT Insider

Retrieving lost revenue from your supply chain

Posted by CeMAT Team on 13-Jul-2016 13:58:08


Reducing lost revenue and gaining productivity is a challenge for carrier companies, and according to Jean-Michel Maclou, Industry Sales Manager for Intralogistics and Transport at SICK Sensor Intelligence the issue lies in the ability to accurately weight loads.

SICK is one of the worlds leading manufactures of sensors and sensor solutions for industrial applications and Jean focused his presentation on the challenges carriers are experiencing when trying to optimise throughput. 

Jean Michel states that logistics is an incredibly significant part of the Australia economy, and failing to properly measure has trickle on effects.

“The transport and logistics industry is worth $150 billion to the nations economy, that’s approximately 14% of Australia’s GDP. Every year in Australia over $400bn worth of goods are sold on the basis of measurement. 

According the Jean-Michel, inaccuracy in volume measurement can be incredibly costly to businesses.

“If you look at it on a case by case basis, you probably wouldn’t notice a difference. But if you measure it over months or years it would certainly make sense to try and improve accuracy.”

Below we look at dimensioning and weighing your parcels by today’s best practice to ensure you can recover lost revenue and drive efficiencies in your supply chain.


Why dimensioning and weighing parcels is so important

The accurate measurement of products can help to increase throughput by ensuring you can deliver on time in peak times.

Knowing the exact load allows carrier companies to optimise their loads and in turn reduce costs. Jean-Michel explains how:

“It’s important to understand that in history the cost of freight was typically done by the actual weight, whereas today it’s done by actual weight and volume weight.

The difference between the two is quite significant and this is where you can recover some of the lost profit if you’ve not adopted a system to measure volume weight.” 

According to Jean-Michel, you should be able to identify weight and dimensions your products, because getting the correct volume weight is incredibly significant.

“Because of the inaccuracy of the way we currently do the dimensioning of our freight, if you are using a carrier to send your freight, a lot of the information that is passed onto the customer is incorrect.”

If you’re transporting small amounts of goods, the return on investment will take you a long time to recover costs.

There is a lot of complexity in the process form inbound to outbound in most distribution centres, but even something as simple as inbound scanning can help you ensure you know what’s in your warehouse, at what time, and when it will be shipped out.

Jean-Michel states states there are a lot of solutions out there that can help you gain more accurate measurements on your products, but it’s more important to find a solution that meets your needs.

If you’re a carrier, Jean-Michel states that not dimensioning and weighing effectively creates too many unknown variables in your operations to control revenue loss.

“Relying on customer declared weight that are incorrect makes it difficult to capture the correct weight and charge accordingly.”

Some final tips on dimensioning/weighing products

Dimensioning/weighing your goods can be tricky if you don’t have the know how to do it. Here are some simple tips to remember if you’re starting off:

  • Don’t overlook the identification process. Accurate identification is important to understand which product is in your facility and what time it is going out through the outbound system.
  • The types of material that are being transported is also important to understand because there are still some limitations with technology.
  • Each country also has their own way of calculating freight charges so it’s important to understand this process.
  • Whichever is greater of the two weighing metrics is what you’ll be charged on, so it’s important to gain measurements on the two. 

Topics: Supply Chain Management, Logistics Automation