Teemu Luovila: Transaction-based pricing motivates companies to genuinely improve

Spring has finally arrived, and the sunlight uncovers a lively industrial Finland. Industrial production graphs continue to climb upwards, which means we are slowly catching up to many other countries who are much more competent in work expenses.

However, even under pressure, we have succeeded in adapting to the circumstances by improving other aspects to make up for what is lacking. Efficiency, quality, innovative operation models and automatization have all been significant variables to give us a competitive edge internationally.

In industrial production, trading, and many other lines of business, logistics is a necessary function. The difference efficient or inefficient logistics makes can be significant and either bring a great advantage or a major loss.

As monitoring and reportage requirements of various stakeholders further develop, the expectations of the predictability of business have grown. Negative surprises should be avoided at the very least. To elevate the ability to predict, the pricing model of logistics operations must be agreed on by both parties.

The quite common pricing models which make predicting difficult have recently been a hot topic in the industry. Even if using these models is done on purpose at times by one of the parties, to achieve better efficiency and goal-directed thinking, different transaction-based methods of pricing usually motivate companies to genuinely improve their operations.

Logistikas is very familiar with the topic. We have used transaction-based pricing for most of our services for years, which in turn has made the cost accounting of our customers easier and the entire logistics process more predictable. For example, it is much easier for a company to import rainboots and predict the sales margin if the entire cost of the logistics chain is a standard despite the possible obstacles faced during the operation.

The author is a cabinet member of Logistikas Ltd, Teemu Luovila

Logistikas Oy:n hallituksen jäsen Teemu Luovila