Logistics Best Practices
Operational and technical best practices for shipment management, warehouse optimisation, logistics digitisation and risk management. Each practice includes a rationale and a concrete do/don't example.
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1. Implement Event-Driven, Per-Event Tracking
Rationale: Real-time visibility on every shipment - not just GPS position but every significant event (pickup, hub arrival, hub departure, out for delivery, delivered, failed) - reduces WISMO ("Where Is My Order?") customer contacts, enables proactive exception management and feeds predictive ETA models.
Do: Record every shipment status change as an immutable event with timestamp, location, actor and event type. Expose events via a tracking API with webhooks for push notifications to downstream systems.
Don't: Update only a "current status" field in a mutable record. Without an event history you cannot analyse carrier performance, identify bottlenecks or calculate SLA accuracy.
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2. Adopt Dynamic Routing in Hub-and-Spoke Networks
Rationale: Static routing (fixed hub→spoke assignments) does not adapt to volume peaks, demand shifts or infrastructure failures. Dynamic routing assigns shipments to hubs based on real-time capacity, reducing processing time and distributing load equitably.
Do: Integrate the TMS with hub WMS systems to receive available capacity in real time and recalculate routing every N minutes. Maintain failover rules: if the primary hub is saturated, automatically reroute to alternative hubs in the network.
Don't: Assign sortation hubs manually or on a static geographic basis. During peak periods (e.g., Q4 e-commerce peak) this rigidity creates cascade delays and bottlenecks.
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3. Use GS1-128 SSCCs for Unit-Level Traceability
Rationale: Identifying every logistics unit (pallet, parcel) with a unique SSCC encoded in a GS1-128 barcode (or GS1 DataMatrix) enables automatic reading throughout the supply chain, reduces receiving errors and enables EDI integration via DESADV/ASN with customers.
Do: Generate SSCCs at packing time in the WMS, print GS1-128 labels compliant with GS1 specifications (Application Identifier 00), send DESADV/ASN to the consignee before dispatch with the SSCC detail.
Don't: Use proprietary non-standard codes. Every supply chain partner would use a different system, making automated inter-organisational traceability impossible.
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4. Design Last-Mile with Active Pre-Delivery Notification
Rationale: The primary cause of first consignment failure (FCF) is consignee absence. Notifying the consignee in advance (SMS/email + self-service rescheduling link) before delivery reduces FCF from a typical 20-30% to 5-10%, substantially lowering re-delivery and hold costs.
Do: Send notification the day before with a 2-3 hour window ("tomorrow morning between 9 and 12"). Offer a self-service link to reschedule or choose an alternative pickup point. Send a second alert 30 minutes before estimated arrival.
Don't: Deliver without notice, especially for B2C. The consignee will not be home, generating re-delivery costs that erode operational margins.
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5. Implement Automated Freight Audit
Rationale: Transport invoices contain errors in 5-15% of cases: incorrect tariffs, non-contracted surcharges, duplicates, weight/volume errors. Manual freight audit is unsustainable at scale; automated audit integrated in the TMS recovers 2-5% of freight costs with ROI typically under 6 months.
Do: Configure all contracted tariff rates in the TMS (including all accessorials). Automatically compare every invoice against the contract, generate disputes for non-conforming items and approve only "clean" invoices. Track error rate per carrier.
Don't: Approve transport invoices without validation. Even the best carriers apply obsolete surcharges or incorrect rates due to system errors.
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6. Separate Inbound and Outbound Logistics in the WMS
Rationale: Inbound logistics (receiving from suppliers) and outbound logistics (shipping to customers) have different processes, priorities, resources and KPIs. Mixing them in a single flow causes resource conflicts, loss of visibility and difficulty in performance monitoring.
Do: Configure dedicated zones, docks and resources for inbound and outbound in the WMS. Define separate SLAs: "receiving within 4 hours of arrival" for inbound, "pick and pack within 2 hours of order" for outbound.
Don't: Use the same docks and operators for receiving and shipping without coordination. During peak periods, receiving activities delay urgent outbound shipments.
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7. Apply FEFO for Products with Expiry Dates
Rationale: For goods with expiry dates (food, pharmaceuticals, cosmetics), FEFO (First Expired First Out) ensures products with the nearest expiry date are picked first, reducing obsoletes and regulatory non-conformances. FIFO (First In First Out) is insufficient when different batches have different expiry dates.
Do: Record the expiry date (and batch number) for every logistics unit at receiving in the WMS. Configure FEFO picking for expiry-managed SKUs. Generate alerts when average inventory age approaches a risk threshold.
Don't: Use FIFO as the sole picking rule for perishable goods. A batch received earlier but with a long expiry will be picked before a more recent batch with a short expiry, leaving near-expiry stock.
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8. Define Delivery SLAs per Service Tier and Contractualise Them
Rationale: Vague SLAs ("delivery in 3-5 business days") generate ambiguity, misaligned expectations and disputes. Precise SLAs per service tier (standard, express, same-day) with defined penalties hold carriers and 3PLs accountable and set correct customer expectations.
Do: Define SLAs per lane (e.g., "North Italy → Central Italy: +1 business day for express"), include penalties (% of freight rate per day of delay), measure OTIF per carrier/lane and communicate results in the monthly business review.
Don't: Accept generic SLAs from carriers without specifying the applicable territory and exclusion conditions. Every uncontracted exception becomes grounds for dispute.
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9. Monitor Logistics Exceptions with Real-Time Dashboards
Rationale: Reactive exception management (responding when the customer calls) is costly and damages customer experience. Proactive management - identifying at-risk shipments before they become problems - reduces re-delivery costs and escalations.
Do: Configure automated alerts in the TMS for: shipments with ETA overdue by more than 20%, shipments stuck in customs more than 24h, shipments with 2+ failed delivery attempts, weight discrepancies at hub (possible damage). Assign a dedicated operator for exception management.
Don't: Monitor only aggregate KPIs (OTIF%, cost per shipment) without visibility into individual anomalies in progress. Unresolved issues become formal claims or customer churn.
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10. Integrate WMS and TMS in Real Time for Dock Scheduling
Rationale: Without coordination between the WMS (when goods are ready for carrier pickup) and the TMS (when the carrier arrives for pickup), queues form at docks, vehicles idle and shipments are delayed. Integrated dock scheduling optimises dock utilisation and reduces dwell time.
Do: Implement a dock scheduling module (integrated or standalone) that books dock slots based on vehicle ETAs (inbound) and packing completion times (outbound). Share the appointment time with carriers via portal or EDI.
Don't: Manage docks with paper and pen or whiteboards. In warehouses with more than 10 docks and 50+ daily movements, manual management inevitably generates conflicts and waste.
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11. Document Customs Classification (HS Code) and Keep It Updated
Rationale: An incorrect HS Code generates customs delays, penalties, undue duties or withheld goods. Classification must be reviewed when product characteristics change or tariff dispositions are updated (annual updates to the EU Combined Nomenclature).
Do: Maintain an HS Code classification database for each SKU in the ERP. Request a Binding Tariff Information (BTI) from customs authorities for borderline products. Review classification at every CN update (published annually in the EU Official Journal).
Don't: Reuse "sector standard" HS codes without verifying conformance to the specific product. Multi-purpose products (e.g., integrated software-hardware) have complex classifications requiring case-by-case analysis.
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12. Design Returns (Reverse Logistics) from Day One of Outbound Process Design
Rationale: Reverse logistics is often an afterthought that generates high costs and poor customer experience. Designing it together with the outbound flow - with standardised processes, pre-printed return labels and defined acceptance rules - reduces costs by 20-40% and improves restocking speed.
Do: Include a pre-printed return label or a QR code for self-service return generation in every parcel. Define return categories (defective, size exchange, change of mind) with different routing (restock, quarantine, disposal). Measure average cost per return and restock rate.
Don't: Handle returns as manual exceptions without a standardised process. In e-commerce with return rates above 20%, this choice creates warehouse bottlenecks and loss of recoverable products.