Friday, May 20, 2011

Minimizing Transporation Cost

Transporation involves the movement of goods and raw materials. This includes shipment of raw materials to the manufacturer and movement of finished product to the customer. Transportation also includes the movements of parts to assembly areas as they are assembled. The easiest to minimize transportation cost is to eliminate unnecessary transportation. You can do this by finding closer suppliers. You can reduce transportation cost by consolidation shipment, buying partially assembled products from vendors and and reducing the number of trips needed to ship in raw materials. Having work stations within the factory close to each other minimize material transportation, which is a non-value added labor cost. Consolidating transporation service providers increases the volume each transportation firm provides and can allow for a negotiated volume discount.


No comments: