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International negotiation


Jhonatan Ortiz Montaña

Learning Activity 12

Evidence1: Writing and Essay About logistics costs

Bogotá DC

Advantages and disadvantages of international physical distribution costs

In any company that has plans to export must take into account transport and
international distribution to the target market, these two fundamental variables
must be properly handled by the company this so that the product or products that
will be sending arrive on time and correct from the factory to the consumer.

One of the most important things for entrepreneurs is the distribution this is an
issue that must face that usually is very difficult to deal with because costs are
usually high and this creates additional costs in the product and therefore raising
the price of the product for the consumer. And this business activate a productive
chain, which, in any error or problem in one of the stages of the product distribution
process will be suspended.

For this there was created and international physical distribution, being the
logistical process that allows us to export products is carried out. Its main objective
is to reduce costs, time and risks when transporting products from their origin to
their destination.

It is important to expanding and seeking opportunities in a company, so this should

be kept in mind that investments of time, effort and money are made to be sure
that these investments are safe should have a good logistics can reduce costs
products to make them more accessible to consumers and so the company has a
higher profit. The evaluation of the logistics department within a company is the
satisfaction of the customer, fluency in internal monitoring processes, production
and transportation. If all these above points are positive the company will benefit.

If the logistics company is good and reduced costs can invest resources in many
more things as boost productivity and improve competitiveness, the same can
improve the management of the company and likewise can expand markets
access to products and thus significantly increase customers.

Some strategies to reduce costs include:

"one. Optimize orders
There's something you should keep in mind is that if there are fewer orders, higher
logistics costs. To resolve this problem should try to consolidate your orders,
optimize the transport type or leverage other charging options. In addition, it is
advisable to analyze the number of weekly orders, volume and delivery addresses.

2. Using mobile technologies

It is very important to know what kind of benefits can offer the technology used, so
we describe them below:
Use technology allows all the information needed by the operator, that no matter
what is playing area.
Improves processing times of orders in distribution centers, since there is no need
of a barcode reader; something that makes the difference when it comes to
picking, as the operator already knows how to "take" to fill an order.
Moreover, it takes into account that technology provides freedom of movement,
which benefits greatly productivity.

<< Why the big data is an ally in logistics? >>

3. Minimizes waiting times

As simple as it is: if the waiting time is much greater the logistical cost.

To resolve this problem should monitor average waiting times your carriers to
identify distribution centers with high service costs.

4. Avoid excess inventory obsolescence

A canning merchandise not sold, does not always keep its value. In some cases it
might be more profitable to donate to keep it. A correct analysis helps making
these decisions.

5. Use of active
Remember maximize the use of company assets to avoid further expense renting
machinery and spaces which are not needed. An analysis of the stock will give you
an idea of saving opportunities.

6. Strategy assortment
When you have more choice, higher the cost per item; the necessary storage
spaces require larger, causing the logistics more complex. Therefore, you must
find the balance between range and cost to increase your profits.

7. Traceability
This is the series of processes that track the evolution of the product at each stage.
This way, you meet the requirement of customers control the growing volume of
information about products and services. The important thing here is to keep track
to meet real-time location of your products. "
(GrupoEI, 2019)

But if you do not have good control over costs can generate operational risks that
go hand in hand with economic and political risks of the company that can trigger
many more negative effects affecting demand for the company and therefore can
damage or miss in inventories to meet the needs of the market, which would be
very damaging for the company

In conclusion we can say that the international physical distribution must have
certain characteristics such as capacity building to generate support for the
internationalization of their product and market without forgetting that corporate
success is not measured today in quantitative or qualitative being this a important
factor in competitiveness and improve the profitability of import operations.