Most shippers spend the majority of their time fine-tuning their outbound supply chain operations. After all, it is the outbound shipments that comprise the majority of business, right?
No, not exactly.
In fact, it is inbound logistics that generally make up for more than half of all daily tasks within the supply chain. For manufacturing-oriented supply chains that purchase new materials for daily production, this number doubles.
Regardless of the industry though, inbound logistics programs and efforts are generally dwarfed by outbound tasks. Of course, inbound logistics never go completely overlooked. Without both inbound and outbound freight, most large companies would shut down.
Yet, shippers across the globe tend to spend a larger portion of their resources trying to save money on outbound shipping. Meanwhile, they are keen to forget the impact that inbound logistics has on the overall health of their supply chain.
But the process of optimizing an inbound logistics program is actually much easier than you’d think!
What is Inbound Logistics?
While outbound logistics involves sending products from your facility to others, the inbound process is a bit more complex. Inbound logistics tasks involve receiving materials or supplies that the company will use in one way or another. Inbound logistics programs for distribution centers, for instance, receive products to later forwarded to retailers. Likewise, the retailer depends on the inbound process to replenish their inventory.
Inbound logistics depends on the collaboration of suppliers, vendors, carriers, distributors, and other partners. Each type of business has specific needs that are impacted based on the efficiency of its inbound logistics program.
The sales process at retail businesses across the globe begins with the manufacturing of commodities. For the manufacturer, ensuring that their raw materials are delivered without delays isn't optional.
For example, if a manufacturer expects to produce 1,000 units per week, they need to ensure they have an ample supply of raw materials on-hand at all times.
To be proactive, most manufacturers plan or 'budget' their inventory levels to ensure they stay ahead of production. However, this is entirely dependent upon the type of product that they manufacturer. If they deal with perishable supplies, it is even more critical that this timing is perfect.
Overall, the inbound logistics process involves working with suppliers (to procure raw materials), carriers (to ensure those raw materials arrive on-time), and a receiving department (to ensure everything is correctly inventoried).
Why It’s Important to Optimize Inbound Logistics
Whether you’re a manufacturer or a retailer, maintaining an ample inventory level is the key to success.
Without supplies or raw materials, the manufacturer will have problems keeping up with production. This, of course, reduces bulk deliveries to the retailer, and thus – directly impacts sales.
As you can see, the inbound logistics process is the first, vital cog within the supply chain wheel.
There are several ways that a shipper can improve their inbound logistics program...
Work with Reliable Suppliers
While it’s attractive to choose the lowest price, this often comes with some inefficiencies. One of the most common is inconsistency with deliveries. Instead of choosing the lowest priced supplier, work with one that will be consistent with delivering inventory, to ensure you stay on track.
Choose Dependable Carriers
The supplier is typically the company that sets up delivery of their commodities to a business. However, it is well within your rights to request carriers that have a proven delivery service level that is on time and with reduced damage claims. Since the recipient typically pays for the shipping anyway, choose carriers that are solid.
Work with a 3PL Company
Using the right suppliers and carriers is just the tip of the iceberg with regards to optimizing the inbound logistics process. A third-party logistics company like Redwood Logistics can help any business discover opportunities for improvement within their complete supply chain operations, including the crucial inbound process.