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Recently, we took a look at what a routing guide is and how it can benefit your business. If you haven't read through that blog post yet, check it out here first.
As we talked about in that previous blog post, a routing guide is a great device for information when undertaking logistical operations. Its usefulness has been proven time and time again throughout different industries, as it has strengthened the supplier/buyer business relationship. Considering all the benefits of having a routing guide in place (cost reduction, shipping visibility, etc.), it is a wise move to begin creating a routing guide for your business if you aren't already utilizing one.
Here are 10 steps to help you get it started...
The very first step toward creating a routing guide is to understand the history of your inbound shipments. There are a few things that you need to determine right off the bat:
Once you understand the what, then you can move on to selecting the "who" – which types of carriers will be best for moving your freight.
Will employees determine this or will this be handled by a professional freight management company? This should be detailed in your routing guide, indicating specific carriers for each mode of transportation that you utilize, with the respective weight criterion in place. If you aren’t utilizing advanced TMS software, you may benefit from outsourcing transportation management needs to a 3PL such as Redwood in order to handle it for you.
Who pays for what? Are shipments collect, third-party billing, or do you require your suppliers to pay for freight to your dock?
When giving instructions about payment and possession, don’t forget to include details about insurance. If your supplier is to carry insurance, the details regarding their coverage should also be listed on the routing guide.
When receiving goods internationally, it is not as straight-forward as it is with domestic shipments. There are additional steps and fees that you will need to consider. Unless your shipment is traveling within the same continent, you will be bound to use an air or ocean freight carrier and this is all handled a bit differently than over-the-road shipments. You will likewise need to account for the possibility that you will likely be relying on multimodal transportation for international shipments versus a single mode.
Once the shipment reaches the border, the formality of customs clearance will ensue. Outlining how international shipments will clear customs is certainly something that should also be included in your routing guide if your supply chain handles international movements.
Another important section included in just about every of every routing guide is the details about the standards and protocol that your business follows. This includes loading and unloading hours, any PPE requirements, driver check-in policy, and any other information that may be valuable for assigned delivery drivers and dispatch personnel. Make sure to list this information so that everyone is well prepared.
Instructing your suppliers on how to package and label your packaging is another critical step in the process, as this is the way to enhance inbound receiving functions, including sorting for outbound distribution lanes and stocking shelves for order fulfillment.
Your routing guide should detail any labels or special markings required for easier inbound acceptance. This includes PO numbers, ASN numbers, and barcoding. If you are against stacked pallets unless shrink-wrapped, then make sure to list this specifically.
Specific information that must be noted on the bill of lading (BOL), hazmat shipping documents, or international airway bill can be designated in the routing guide. These details can also be accompanied by a template that users, both experienced and inexperienced, can use in an effort to reduce errors.
Think of this part of the process as a way to recoup financial losses due to incorrect labeling, damages, and other logistical nonconformities. You should list responsibilities for internal employees when they encounter unauthorized exceptions to the routing guide.
You should also advise of chargebacks for actions and occurrences outside of the scope and guidelines of the routing guide.
Upon completion of the routing guide, it is best to train all internal stakeholders and users on the process. This will enable all involved to ask questions and gain clarity on the procedures prescribed on the routing guide. This will also allow daily users to provide input before sending it out externally.
The final step in the creation of a routing guide is to publish it. This may mean sending an electronic copy to all suppliers or uploading the document into a supplier portal where the supplier must acknowledge receipt. Supplier acknowledgment is essential, expressly when assigning chargebacks for non-compliance.
Creating a routing guide can seem like a daunting assignment, especially when there is a diverse amount of information that must be gathered from various sources. However, having this guide in place not only creates consistency in your logistics operations but also garners tangible cost savings when used effectively.
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