10 Tips to Optimize Inbound Logistics from #1 Ranked MSU

Increasingly, firms are buying more while making and doing less. This trend to source with third parties is evident everywhere. Today, third party suppliers dominate both inbound and outbound logistics. Furthermore, while such things as longer and more complicated supply networks, lean manufacturing, just-in time inventory, pull manufacturing, supplier rationalization, SKU proliferation and fewer distribution assets can reduce total supply costs, they can also add supply risk. And, where there is risk, there is usually opportunity to find ways to differentiate your firm that can deliver competitive advantage.

1. Understand Total Cost of Ownership. Service costs can dwarf pricing on inbound sourcing. What good are low shipping rates if you shut down your manufacturing operations? Develop a robust carrier performance measurement system that not only enhances on-time delivery and reduces/eliminates damage, but also incents and rewards innovation.

2. Unbundle Your Purchase Orders. You can't manage what you don't understand. Supplier offerings should break out transportation costs and options in order for you to determine the best alternatives. Who has a better deal – you or your supplier?

3. Leverage Your Volume. Consolidate your inbound logistics sources to make your transportation buy more attractive to carriers. Establish a core carrier program the same way you'd go about creating key supplier segmentation strategies. And, don't forget to include your outbound freight in the mix. Can a carrier make both a delivery and a pickup on one trip to your facility?

4. Think Like the Old Milk Delivery Driver. Investigate options to consolidate routine shipments from clustered suppliers into efficient and effective scheduled pick-ups and deliveries. Get really creative (like the furniture manufacturers in western Michigan, USA) and consolidate shipments from common suppliers.

5. Be Accurate. Ensure the correct rates and weights apply and that all import compliance requirements are met. This requires systems, diligence, superior carrier relations and talent.

6. Be Attractive. Increase carrier retention, service levels and benevolent pricing by improving relations, sharing risks and rewards, paying on time (and quicker?), and generally reducing your carrier's cost to serve you.

7. Delight Your Customers. Improving internal customer satisfaction is the best way to ensure on-going support for carrier improvement initiatives.

8. Automate. Exemplars eliminate costly manual processes and verifications.

9. Manage Assets You Don't Own. Improving your supplier and carrier asset utilization not only reduces their costs to serve you (which should be shared), but simultaneously reduces overall network inventory and allows for seamless tracking.

10. A Carrier Can Do More Than Move Stuff. Creatively investigate ways carriers or carrier/supplier combinations can add value by providing services such as staging, inspecting, queuing and sub-assembly.

Stay connected to Inbound Logistics:

PRIVACY INFORMATION

Inbound Logistics respects your privacy. If you wish to discontinue this newsletter, click below to unsubscribe. Our privacy policy is available for your review online at www.inboundlogistics.com/privacy.shtml.