How to Improve Freight Visibility in Your Supply Chain
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.
In this blog post, we'll explore what inbound logistics is, why it matters, and how you can optimize your inbound logistics program.
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 be 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—often using a just-in-time approach—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 Modern 4PL
Using the right suppliers and carriers is just the tip of the iceberg with regards to optimizing the inbound logistics process. Redwood's Modern 4PL approach can help any business discover opportunities for improvement within their complete supply chain operations, including the crucial inbound process.
Final Thoughts
If you'd like to learn more about how you can integrate an inbound and outbound logistics program, it's as easy as a click away. Contact Redwood's Modern 4PL team today!
FAQs
What is an inbound logistics program?
An inbound logistics program is the process of moving materials or supplies into a business so they can be received, inventoried, and used in operations. It typically involves suppliers, carriers, distributors, and a receiving department working together to keep inventory flowing on time. For manufacturers, it ensures raw materials arrive without delaying production; for retailers, it helps replenish stock.
Why does inbound logistics matter more than many shippers realize?
Inbound logistics matters because it is the first vital step in the supply chain. If raw materials or inventory do not arrive on time, manufacturers cannot produce at full capacity and retailers cannot keep shelves stocked. The article notes that inbound work can make up more than half of daily supply chain tasks, and even more in manufacturing-heavy operations.
How do you optimize an inbound logistics program?
You optimize an inbound logistics program by focusing on three areas: working with reliable suppliers, choosing dependable carriers, and using a modern 4PL approach to identify improvement opportunities across the supply chain. The goal is to reduce delivery inconsistency, keep inventory levels stable, and improve the flow of materials into the business.
Why should you choose reliable suppliers instead of the lowest-cost option?
Reliable suppliers are often the better choice because the lowest price can come with inconsistent deliveries. Inbound logistics depends on materials arriving when expected, so supplier consistency has a direct effect on production schedules and inventory stability. A dependable supplier helps reduce the risk of delays that can ripple through the rest of the supply chain.
What should you look for when choosing carriers for inbound freight?
For inbound freight, look for carriers with a proven record of on-time delivery and fewer damage claims. Since the recipient usually pays for the shipping, choosing a solid carrier can have a direct cost and service impact. Carrier reliability matters because delays or damaged goods can interrupt inventory planning and production schedules.
How does inbound logistics affect manufacturers and retailers differently?
For manufacturers, inbound logistics keeps raw materials moving in so production can continue without interruption. For retailers and distribution centers, it supports inventory replenishment and the flow of goods to the next destination. In both cases, inbound performance affects whether the business can meet demand, but the specific pressure point is production for manufacturers and stock availability for retailers.
What is the role of a modern 4PL in inbound logistics?
A modern 4PL helps identify opportunities to improve the full supply chain, including the inbound process. Rather than managing only one shipment or lane, a 4PL looks across suppliers, carriers, and receiving operations to find inefficiencies and coordination gaps. That broader view can make inbound logistics easier to manage and more effective over time.
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