Inbound logistics is a critical part of every business. If you’re not receiving your goods and raw materials efficiently, your warehouse operations and distribution can begin to suffer. That’s why we’ve compiled some tips that can help improve your inbound logistics.
Key takeaways:
We’re going to provide detailed information on the methods you can use to improve your inbound logistics.
In simple terms, inbound logistics describes the process of getting raw materials or goods from a supplier to a business. The products themselves may change depending on what kind of business you have, but the intent remains the same.
Important aspects of inbound logistics include:
To show the significance of inbound logistics, consider some data that I’ve provided about the industry on a global scale.
Let’s use an example that shows inbound logistics at work. Consider the kind of materials a food processing plant that makes and packages cornmeal might need.
Actual corn needs to be shipped in, paper or plastic containers need to be set up, and labor needs to be organized. All these things make up inbound logistics.
Perhaps your company doesn’t do any kind of manufacturing, like an eCommerce store that sells athletic wear. Inbound logistics are still needed to ensure you have inventory available when a dozen people decide they require the new sneakers you just posted on your site.
Related: Retail Logistics
If your business produces anything, from cupcakes to cupholders, any interruptions in your inbound logistics can bring things to a stop.
Forgot to renew your deal with the flour supplier? No cupcakes today unless you spend more money to get things delivered last minute. Now you’re potentially impacting your bottom line and slowing down production.
On the flip side of things, an optimized inbound system can help your business earn more and spend less. Inbound logistics optimization is going to be a factor in determining the speed, or lead time, at which your finished goods are made and distributed.
Let's consider the example of a cupcake shop. Among the basic staples are flour, eggs, butter, and milk. If you order too little, getting more shipped in on short notice would be expensive and time-consuming. If you order too much, you risk the supplies going bad because you weren’t able to use them in time.
Optimizing your inbound logistics can allow you to adjust shipping processes so that your materials arrive in just the right quantities to match your output. You get to reduce costs and increase profits. Customer experience in your cupcake shop increases because lead times are consistent and cupcakes are readily available.
Want to know more? Check out our article on procurement vs logistics.
If your inbound logistics operations are falling behind, then you’ll need to make a change. Fortunately, there are multiples methods you can use to improve this important business function.
In the following sections, we’ll get into the details of each of these methods and how they can help.
You may realize inbound logistics are struggling, but not be able to pinpoint where the biggest problems are. That’s why you should take the time to analyze the performance of different inbound processes to narrow down the major issues.
Inefficiencies you should be on the lookout for include:
The best way to assess your current inbound logistics process is to collect data on the inefficiencies that I’ve listed. This will reveal significant insights that you can address.
A reliable supplier is essential for inbound logistics. Without one, you won’t be receiving a consistent flow of goods, or you may be receiving poor quality ones. This will make maintaining production schedules and meeting the demands of your customers increasingly difficult.
That’s why you should carefully vet each supplier you come across before making the decision to hire one. If you want to implement dual sourcing into your supply chain, you’ll need to complete this same process a second time.
You should also try to strengthen the relationship with your suppliers as well. Doing so will lead to a variety of benefits.
This includes:
To strengthen your relationship with your suppliers, you can do a few simple things.
Fostering an honest and collaborative relationship with your supplier may lead them to favor your business over other clients.
Negotiating more favorable carrier rates can improve your inbound logistics by bringing down your expenses. A carrier will be more likely to work out a deal the more you use their services because they’ll see you as a loyal (consistent) customer whose business provides steady revenue.
If you have a large volume of LTL shipments coming to your warehouse, a good option might be to pool multiple orders together. Most carriers will offer cheaper rates for this type of transportation service. They also offer volume discounts that will make shipping cheaper for larger orders.
It’s one thing to have the capacity to receive and store large quantities of freight. You’ll also need to have the capacity to manage all your incoming freight as well. Fortunately, there are a few resources you can use to achieve this.
TMSs can be used to manage and optimize your freight operations. It can compare carrier rates, track incoming shipments, and analyze the performance of your carriers.
Once your freight arrives at your facility, you can use a WMS to better manage the unloading and storage of your raw materials or goods. There are various WMS that you can use for your facility.
Implementing SOPs will teach your workers how to perform their operations correctly and efficiently. Creating good guidelines for your workers to follow will complement the benefits provided by TMS and WMS.
Demand planning is beneficial for both inbound and outbound logistics. For the purpose of inbound logistics, you can use it to determine order quantities based on likely future demand.
Demand planning takes into consideration various factors, such as economic shifts, labor force changes, and the spending habits of your consumers. As a result, you’ll never end up with too much or too little of goods and materials.
As a business owner, your knowledge of inbound logistics could be limited, or you may lack the infrastructure to receive and house your incoming shipments. A third-party logistics (3PL) can fill in the gaps.
Not only do they have warehouses, they typically have a network of carries they can use to transport your goods. Leveraging their resources can make your overall logistics operations even more efficient.
The work isn’t over after you’ve implemented these methods. You’ll need to monitor certain key performance indicators (KPI) to ensure your changes are making a difference.
This includes:
If you don’t notice any positive changes in these KPIs, you might need to rethink the adjustments you’ve made. With some slight modification, you’ll be able to get your inbound logistics where you want it.
Fulfillment and Distribution has the resources to improve your inbound logistics. Our company is directed by a leadership with 80+ years of experience in the industry. With their leadership, our warehouse workers can perform the services your business requires. We also have a variety of warehouses all across the United States that you can utilize to maximize your reach.
Some locations include:
Get started with one of our services today by filling out your Fulfillment and Distribution quote. If you require supply chain advice, then call us at (866) 989-3082 to book a consulting session with one of our specialists.