Today’s supply chains suffer from egocentric mindsets. Organizations are always looking out for number one, and while that remains vital to success, failure to work with other parts of your supply chain will lead to severe consequences. These consequences include higher freight spend, poor dock scheduling, increased carrying cost of inventory and more.
Although finding ways to work with carriers might seem like the ideal solution, the real answer lies in improving inbound freight collaboration with shippers, vendors and even customers. In other words, everyone in the supply chain needs to have access to the data within the system. Customers don’t need the same type of access, just the ability to see shipping costs and timelines. Thus, deployment and integration of the TMS are crucial aspects of building harmony and profitability through inbound freight collaboration.
Subpar Communication Within the Supply Chain Leads to Exacerbation of Problems
For instance, many companies believe vendors are responsible for inbound freight. Such actions leave wide margins of error for inbound freight scheduling and planning which compounds when shippers assume vendors work together to schedule deliveries. The burden rests on the shoulders of the shipper to let vendors know when shipments are acceptable, keeping in mind the two-hour delivery window most vendors and carriers follow.
The Uses and Substantial Benefits of Transportation Management Systems
The Undisputed Value of a TMS
The use of a TMS is essential to managing outbound freight and ensuring customers have the lowest shipping pricing available, if not free. However, shippers may not be using a TMS to its fullest potential, leveraging it to manage inbound freight, as well as outbound freight. The basic premise of a TMS is to control the shipping process from its origin to destination, and since your dock is the destination, it is a useful tool to optimize inbound freight.
The value of using a TMS for inbound freight management derives from collaboration. If your inbound freight routing guide specifies the use of different carriers to reduce inbound freight costs, it represents an added time drain for your business and vendors. However, a TMS could follow pre-set rules for determining inbound freight carriers, scheduling deliveries and more.
The TMS also allows for inventory reductions through improved confidence in your vendors supporting the customer service side of business-to-business transactions. Remember your organization is the customer for suppliers. Eliminating manual processes and getting everyone on the same page through the system of record offers significant benefits for your organization, such as reduced inventory, improved cash flow and more.
Ways a TMS Enhances Supply Chain Inbound Freight Collaboration
There are many ways a TMS enhances collaboration and communication within the supply chain. Considering inbound logistics, the primary impacts of TMS deployment include:
- Reduces documentation inconsistencies. Documentation inaccuracies, including incorrect data, may result in delays in inbound freight scheduling, shipping, and delivery.
- Uses artificial intelligence and big data to make informed decisions. Using big data, shippers can understand inbound freight costs and use artificial intelligence to make more cost-effective decisions. Furthermore, applications of the TMS may automate the inbound freight scheduling and management process.
- Provides a snapshot of costs for different carriers, enabling continuous review of freight issues. Problems may occur, and a TMS serves as a dashboard and collaboration tool to review the potential issues and identify how to prevent their recurrence.
- Improves opportunities for inbound freight consolidation and access more capacity by working together, not in silos. Supply chain executives have reported an increased interest in working with other companies to share the road, so to speak, as to reduce the number of empty miles and avoid lost opportunities for capacity, says Jeff Berman via Logistics Management.
- Lowers risk of detention time for drivers. Decreased risk of detention time reduces the costs of inbound freight and improves the likelihood of gaining shipper-of-choice status, which may open the doors to lower freight costs, avoiding missed pickups and expanding your network.
- Streamlines freight claims processes for damaged goods or inability to deliver shipments to your facility on-time. When damage does occur, third-party logistics providers (3PLs) may offer additional services, including freight claims auditing and management, for companies using a set TMS, such as the Cerasis Rater.
The Importance of Inbound Logistics in Effective Freight Management
Put the Power of a Dedicated TMS to Work in Your Inbound Freight Management Program
A dedicated TMS is an effective way to lower outbound freight costs and gain control over inbound freight management simultaneously resulting in improved communication and collaboration among all parties, improving customer service along the way. Fortunately, companies that take the time to understand the risks and potential benefits of enhanced inbound freight management can work together to save money, boost profitability and reduce risks.
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