When it comes to managing shipping costs, organizations tend to over-look the inbound supply chain. Effectively controlling and managing inbound freight can be a difficult process without a solid structure to hold vendors accountable. Below are our top three tips to help reduce inbound logistics costs.
1. Create Routing Guides and Implement Vendor Compliance Programs
The first step to successfully managing inbound freight is the creation of personalized routing guides and the implementation of a vendor compliance program.
Routing guides can be developed manually, but more commonly in the 21st century, through the use of transportation technology. Routing guides include instructions such as acceptable modes of transportation, carriers to use for specific lanes, delivery or receiving hours, shipment notification procedures and exception protocol for shipments that will not meet the designated delivery window.
Vendor compliance programs outline the exact requirements between the receiver of the freight and the shipper if routing guides are not followed. If the shipper does not comply with standard operating procedures, the vendor compliance program outlines who is responsible for what payments or actions. Additionally, expectations are understood by both parties, reducing variability in procedures and avoiding unnecessary costs.
2. Leverage Technology to Increase Visibility & Control
Leveraging technology within supply chain management seems like a common sense but even in today’s world, some businesses are still manually managing shipments. Managing shipments without technology can drastically reduce visibility due to the lag time of manual updates.
With the power of a Transportation Management System (TMS) technology, shippers have 24/7 real time access to shipment information. Instead of managing shipments via excel or other programs, shipment updates from the carrier can be viewed nearly instantaneously thanks to EDI (electronic data interchange) and online portals.
Additionally, businesses have the ability to see if vendors have chosen incorrect routing or a more expensive mode of transportation for a given shipment. This immediately increases the accountability and effectiveness of the vendor compliance program. Control over vendors allows companies to manage relationships more proactively as well as introduce a charge back compliance program to vendors that routinely do not follow routing instructions.
When utilizing technology to host routing guides, companies also have the ability to instantly update routing guides based on changes in the industry or with a specific carrier. In an ever-changing environment, web-based routing guides enable companies to make swift changes to capitalize on potential savings.
3. Find a Partner Who Wants to Understand Your Business
A strong partner with a knowledgeable team will help guide shippers to make proactive improvements instead of making changes retroactively due to a particular problem. Expert guidance from industry professionals that truly understands the business can save clients a considerable amount of time and resources.
Ascent Global Logistics provides clients with comprehensive Vendor Inbound Management programs within its Domestic Freight Management solutions. From receiving inbound products to drop shipping directly from distributor to customer, the Ascent Global Logistics team recognizes that coordination is key, working with clients each step of the way.
Our team specializes in working with clients to understand their business and overall goals to then collaborate on procedures and execution. Due to a deep understanding of the fine details and nuisances in an inbound supply chain Ascent Global Logistics can help clients develop routing guides and automated programs to ensure shipments are executed in the most cost-effective way.
To learn more about how we help clients with vendor compliance programs, routing guides, visibility or control contact our team today.