Improving supply chain visibility is a goal of most organizations, but inbound freight is much more than simple dock scheduling. Shippers were faced with the need to understand the cost, transit, purchase order associations, carrier selections, vendor requirements, specifications within the inbound freight routing guide and much more. Unfortunately, many different issues resulted in shippers giving up, leaving control in the hands of suppliers and avoiding inbound freight visibility. However, it is still possible for shippers to gain inbound logistics visibility and become shipper-of-choice for carriers, provided they understand its value and why visibility is so important.
Causes of Poor Inbound Logistics Visibility
According to Logistics Viewpoints, the notion of better inbound logistics visibility has been around for some time, and many companies have routinely relied on electronic data interchange (EDI) to manage inbound freight. Unfortunately, these systems are often limited in capability, and shippers may lack the financial resources to invest in such systems which are especially true among smaller and mid-sized shippers.
Some causes of poor inbound logistics visibility include:
- Increased demand for faster delivery. All customers want a quicker delivery, but in inbound logistics, faster delivery may not necessarily amount to better inbound delivery and management. As a result, it is essential for shippers to understand this delicate balance and work with suppliers and vendors to ensure proper delivery.
- The growth of e-commerce. The growth of e-commerce is also causing poor logistics visibility, resulting from a rapid increase in the number of inbound shipments, especially those on a smaller scale and sizes, such as LTL and parcels.
- SKU proliferation. A diverse product group is excellent for business, but it presents additional challenges in managing inbound freight. As the number of SKUs has increased, shippers must expand their operations and capabilities to ensure they can track inbound SKUs and avoid unnecessary carrying costs.
- Decreased accountability of suppliers and vendors.
In addition, a survey of supply chain leaders found additional challenges, reports Logistics Management, including lack of data analysis and decision support, inability to gauge market conditions, lack of KPIs to increase performance, failure to understand international trade regulations, and a simple unwillingness to work with shippers to maintain compliance with the inbound freight routing guide.
How to Drive Inbound Freight Savings thru Improved Vendor Compliance Management
How Visibility Contributes to Shipper-of-Choice Eligibility
Increasing visibility in inbound logistics improves eligibility for shipper-of-choice status, a result of shippers using more technology and systems to ensure a seamless, error-free inbound freight management process. Since that shippers are less likely to experience delays and inefficiencies when loading or unloading trucks, they are more likely to receive the designation from carriers. Most importantly, gaining shipper-of-choice eligibility ensures freight is rated at the lowest possible rate, and suppliers and vendors are more likely to work with carriers to ensure shippers need are met.
Best Practices for Increasing Inbound Logistics Visibility
Shippers that want to increase inbound logistics visibility should follow these tips:
- Implement a transportation management system (TMS) that includes inbound logistics capabilities.
- Develop and deploy a dynamic routing guide for inbound logistics to ensure shippers and suppliers understand which carriers are to be used for all possible inbound shipments.
- Hold suppliers accountable for failure to comply with specifications within the inbound freight routing guide.
- Recognize the accomplishment of suppliers and vendors that do adhere to your requirement through ongoing communication and collaboration to refine inbound logistics further.
- Take advantage of new technology as it becomes available, including the use of blockchain and other systems designed to reduce the risk of errors and issues within inbound logistics.
Gain End-to-End Visibility in Your Entire Supply Chain Now
The goal of any effective supply chain is to reduce costs and offer the best customer service and experience possible. Unfortunately, inbound logistics is often overlooked is shippers work to improve outbound freight. However, those that understand the causes of poor inbound logistics visibility, how visibility contributes to shipper-of-choice eligibility and the best practices for increasing inbound logistics visibility can work to reduce overall costs and improve customer service levels.
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