The Covid-19 pandemic came with numerous lessons learnt. Notable of these lessons is that the supply chain is brittle.
If there is a disruption in the smooth flow of raw materials and parts to where they are needed, manufacturing factories grind to a halt. Unfulfilled orders are experienced as a resultant effect which ultimately leads to customers dissatisfaction, and of course, the bottom line suffers.
The effects of pandemics on businesses are not what can be adequately planned against, but the fact remains that disruptions can, and sure happen.
One sure way trade-reliant companies can attack the risks of critical shortages is by taking good control of their inbound logistics. The following are some benefits derived from doing so.
QUALITY CONTROL EFFICIENCY: If effectiveness and efficiency are considered crucial to your operations, so also is inbound logistics management. Effectively managing inbound logistics will help avoid delays and shortages of critical items.
With a clear understanding of the cycle time between order and arrival, you can then balance the needs of just-in-time and just-in-case supply chain tactics. This enables improved and better inventory management as there is no understocking of critical goods or overstocking less important goods.
IMPORT FLOW PREDICTABILITY: At the point when you have solid control over the inbound movements of goods, visibility and efficiency are enhanced. It implies your suppliers will send you shipments using your account with your chosen carrier at whatever service level you decide. Based on this, you can track exactly where your goods are and when they will arrive.
When the selection of carrier is determined by your vendors, you have little control over when goods are delivered, your vendor will almost definitely use the carrier and service level that suits them and not you.
Technology also plays a critical role in simplifying this process, a solution for transport execution will allow you to manage inbound shipments almost the same way you manage outbound shipments. Transportation execution solutions equally make it possible to manage or consolidate different shipments coming from various vendors that are based in the same region.
VISIBILITY ENHANCEMENT: Sometimes, delays are inevitable, accidents and storms happen, ships even get stuck in canals sometimes, disrupting trade and negatively impacting the supply chain for a long while.
Organizations that use comprehensive transport execution are able to effectively track inbound and also outbound shipments the same way, and this can be done centrally from a portal.
Although visibility in itself is not enough, however, “exception management” is the key here. There would be a notification you get should a shipment be at risk of missing its deadline for delivery, and this would aid you to take proactive measures towards solving this.
COST REDUCTION: In multiple ways, it is easier for businesses to purchase goods on prepaid or delivery terms, however, there are chances you may be paying for this inconvenience. The responsibility of managing and containing your freight has been outsourced by you to your vendor, and almost definitely, your supplier has added markup to this, in return, turning their transport cost into a revenue generation stream.
VOLUME DISCOUNTS LEVERAGING: One very good reason to also manage inbound and outbound logistics is that it puts you in an advantageous position to bargain with your carriers to obtain volume discounts. The more the volume you are to ship with any carrier, the better you can negotiate more favourable terms.
There are many costs that can significantly add up to your shipping cost, for example, surcharges and accessorial fees, controlling inbound logistics will give leverage to negotiate these costs. This should be core when negotiating with your carriers.
TRUST, BUT ALWAYS VERIFY: Many companies have an information base. Your logistics and supply chain unit may have negotiated good rates with the carrier, however, because the invoice is not checked for accuracy when it arrives, your organization might be paying for services not received or surcharges wrongly added.
Software solutions that audit freight bills, will allow you to automatically reconcile carrier invoices for both inbound and outbound shipments. In the event that inconsistency is noticed, relevant personnel will be notified.
Freight auditing is critical and an integral part of effectively managing your logistics costs, high volume shippers who pay freight bills without double-checking for accuracy are most possibly overpaying.
In conclusion, it is important to note that the effective management of inbound logistics positively and measurably impacts your supply chain efficiency.
Be sure to contact AMG Logistics for all your logistics needs.