Inbound transportation management is complex and requires a lot of attention. It often leaves shippers at a loss for proper strategy and tools. Inbound supply chain processes usually suffer because of a lack of control and poor visibility, compared to outbound transportation initiatives. According to an Aberdeen survey, 90% of shippers say they are not prepared to manage inbound freight. Deploying effective inbound management improves transportation efficiency, reduces cycle time and leads to cost reduction.
The most common mistakes in inbound vendor management are:
- Leaving decision making to vendors
- The first step to improve inbound freight management is to gain control over inbound freight. When vendors choose carriers and set up the shipping schedule, poor quality and timing can result in higher costs being passed down the supply chain.
- Scattered inbound process
- As the supply chain becomes more complicated, inbound freight purchases and control often lack collaboration among departments. Proper inbound management brings together data and process visibility to create inbound consistency.
- Lack of planning
- Relying on manual track and trace processes provides less predictability, which leads to shipping disruptions, excess inventory and supply chain dysfunction. It’s difficult to control inbound freight shipping without a clear and reliable plan.
Lack of control over inbound freight results in increased transportation costs, poor visibility of product flow and inadequate planning. To avoid these problems, shippers should recognize these 4 methods for efficient and controlled inbound freight management:
1) Use a TMS with detailed reporting capabilities for visibility. TMS software provides a collaborative space between shipper, vendors and suppliers where reliable data and performance analytics run through a single system and are shared by those with overlapping supply chains. A TMS helps automate manual tracking processes and paper work, and makes collaboration much more efficient.
2) Create a vendor compliance program. A vendor compliance program lets shippers find the right measurement methods and reporting on inbound freight performance. It proves to be the most effective method for consistency and reliability in vendor management.
3) Direct shipment control. E-commerce orders are often shipped directly from a vendor, which raises delivery quality issues for a company. The shipper must take control over delivery time and quality, since the vendor’s delivery quality represents the shipper’s brand.
4) Hire an expert partner. Using years of experience and proved solutions, a third party logistics provider will employ a custom inbound freight strategy, designed to improve performance and reduce costs.
Assessing inbound strategy creates better planning and effective use of technology, which help a shipper gain control over shipments and costs, and leads to substantial operational improvements and increased profitability.
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