Supply chain management is a crucial element of any modern business. Organisations investing in their supply chains achieve superior growth than their industry's standard. By investing in your supply chains you can create cost savings, boost productivity, and improve your brands’ reputation.
With that said, optimising your businesses supply chain can be a complex process. Businesses dealing with physical goods need both inbound and outbound logistics processes. It's essential to understand the difference between Inbound and Outbound logistics as well as how you can optimise each.
The Difference Between Inbound And Outbound Logistics
The primary difference between inbound and outbound logistics is who the goods are delivered to. For inbound logistics, goods are sent from a supplier to the business's warehouse. In comparison, the products are sent to the end customer for outbound logistics. Generally, inbound logistics concerns receiving raw materials and tools. Outbound logistics is about delivering the final product to customers.
Both inbound and outbound logistics processes are fundamental to quality supply chain management. Learning to optimise each will set up your business for success and growth.
Groups like WTA can streamline your logistic processes into one platform. Granting you precision and transparency by offering comprehensive digital solutions.
How to optimise your Inbound Logistics
Experts will call inbound logistics "the final frontier" of reducing transportation costs. Streamlining this process is usually easier said than done. It requires effort and coordination between warehouse operators and supply chain managers. That said, here are some of the ways you can work to optimise your inbound logistics process:
Build Strong Relationships With Your Suppliers
By developing strong supplier partnerships you can open up new opportunities. This can include reduced lead times, better terms, a sense of security, and overall cost savings.
You should start by investigating your optimal supply route. Then work with your suppliers to create a mutually beneficial implementation. You can also establish an inbound routing guide. The guide should include relevant information such as carriers. This can help your partnership progress smoothly.
By prioritising this relationship, you help your supplier understand your business better. This can allow them to put in place plans that suit your needs.
Developing Vendor Inbound Compliance Standards (VICS)
Issues such as damaged products, late deliveries, and a lack of proper notifications can cause a lot of complications. This can make it difficult for you to upkeep your business. You can help prevent this by developing Vendor Inbound Compliance Standards (VICS). By having your suppliers agree to them before they begin working with you, you can help to avert these issues before they arise.
It's important not to install VICS to "punish" your supplier. You don't want to damage your relationship. Instead, have all the goal-posts in your VICS program be straightforward and measurable. This way, at the start of the contract, everyone involved is keenly aware of the expectations. This Streamlines the process for all involved parties.
Consolidating Inbound Freight Deliveries
If you are moving your goods via sea make sure you are utilising your container, don’t ship with empty space. If you cannot fill a container, look to use a provider that has a consolidation service, whereby your goods will be consolidated at a warehouse and you only pay for the space you are using.
If you are moving your cargo via road then A less-than-truckload (LTL) is when you only pay for the part of the truck trailer while other cargo fills the unoccupied space. While this can seem appealing, LTL shipments can lead to extra costs as well as increased delays. Companies that unload 10 or more LTL shipments will spend five times as much as unloading a single truckload.
Some complications can come with consolidating shipments. Availability of the driver, delivery times, and handling requirements can all be issues. There are also more complex issues, such as refrigeration for food products.
Third-party logistics providers like WTA can help, acting as your international freight expert. With experience transporting goods across the world with a network of global partners. WTA can give you a completely personalised experience. Helping you to streamline your supply chain and reduce overall costs.
Optimising Outbound Logistics
Optimising inbound logistics is primarily about having a solid relationship with your suppliers. Similarly, optimising your outbound logistics is about improving the relationship with your customers. This process can seem more straightforward than inbound logistics at first glance. Key elements such as processing orders and managing inventory must be considered. When looking to optimise outbound logistics, here are some of the things you should consider:
Lowering Your Inventory Costs
Outbound logistics is primarily about getting products to customers on time. Because of this, ensuring that you can quickly respond as demand fluctuates is one of the best ways to optimise the process. Many companies will attempt to do this by ordering some extra stock to be kept on hand for future use. However, this can increase costs as you need to rent more space and hire employees to inspect and count inventory.
Instead, it would be best to focus on having a steady supply of inventory that matches your demand. You want only to hold stock that you're ready to sell. Instead, you should work on attaining a high inventory turnover rate.
Building and improving partner relationships.
Try working closely with your customers and freight providers. You may be able to get valuable insights into their complex supply chains. Then you can integrate them with your outbound logistics.
With the right customer relationship, they might be able to share data on how your products are selling. This can allow you to adapt your production process and supply chain.
Cross-docking can be an effective way of limiting the time that goods spend in your warehouse. Employees sort through incoming goods and then transfer them to an outbound truck. These trucks then distribute them directly to the customer. This can make the need for handling or storage time minimal.
You should first consider if cross-docking is best for your business before implementation. But it can be a highly effective method of minimising costs. Additionally, cross-docking can reduce the number of returns and improve customer satisfaction.
If you need help deciding if cross-docking is correct for your company, WTA can help. At WTA, we're international freight experts. We develop solutions that fit your individual needs regardless of your supply chain's complexity.
Understanding the differences between your inbound and outbound logistics processes is essential. Inbound and outbound logistics are both necessary for modern businesses. Ideally, you want to optimise both your networks to maximise efficiencies. This can be a complex process. You may also want to consider using a logistics partner to optimise the process for you. WTA can help shippers utilise the most efficient and cost-effective shipping solutions.