As a manufacturer, it is important to make the right logistics decisions to ensure optimal efficiency and cost savings for your business. Making the wrong decisions when it comes to transportation logistics can have severe impacts down the road. Today, we will discuss a common issue in logistics planning: consolidation vs. deconsolidation. Consolidation and deconsolidation are both important tactics in logistics – either one you leverage will depend on the specific needs of your company.
Consolidation is the logistics technique in which shipments from various manufacturers are combined onto one truck. This is extremely efficient for many manufacturers because they are only paying for the space they are actually using on a truck. As a result, consolidation decreases the number of trucks on the road, saves money on labor costs, and creates an overall more proficient delivery process.
Consolidating shipments is ideal for those that have smaller shipments and would like to benefit from reduced costs and greater efficiency in the shipping process. Rather than going the traditional route of moving forward with a shipment and paying for space that is not used, consolidation allows for several small shipments to be combined and delivered using the most effective delivery route.
Deconsolidation is essentially the opposite of consolidation. It is the logistics technique of breaking down an inbound shipment into multiple shipments so that they can be distributed to a retailer through the outbound vehicle. This allows manufacturers to send goods to multiple locations more efficiently and in a more cost-effective manner.
Deconsolidating shipments are perfect for manufacturers that require quicker speed to market. It is also ideal for those that have freight going to several different places. Additionally, deconsolidation allows for easy off-loading of imports when an inbound truck arrives at a facility, permitting an even quicker redistribution. Other benefits include greater inventory management and faster speed to market.
Consolidation and deconsolidation are both innovations in the logistics industry that have allowed for greater efficiency and cost savings. National Retail Systems is a leader in consolidation and deconsolidation and can help you decide what direction will be the most efficient for your logistic needs. As a third party logistics provider, we will evaluate the specific needs of your business to come up with a logistics management strategy that streamlines your distribution and saves you money in the process. Contact us today to start a discussion.
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