Inbound logistics refers to a network of transportation that brings goods or materials from suppliers to your business. If you are a manufacturer, inbound logistics will involve procurement of raw materials to make a finished product that you will eventually sell. Inbound logistics should work like a well-oiled machine because the network must be tailored according to the production cycle and warehousing capacity of a company. This will ensure that there isn’t a surplus of any material when it is not required. Basically, it should adhere to the ‘Just in Time’ methodology.
Current state of inbound logistics in the US
The United States is among the leading logistics markets based on the Logistics Performance Index. The logistics industry in the US is a highly integrated supply chain network that links producers and consumers through multi-modal transportation.
Inbound vs outbound logistics
Logistics involves detailed organization and implementation of a complex operation of moving goods from point A to B. It can be classified into inbound and outbound logistics. Inbound logistics refers to the things that you bring into the business, while outbound logistics is about the process of supplying the end product to the consumer. A fall out will affect all the links set in place. An efficient inbound logistics program can result in higher quality product, cost savings, and increased sales. It will also enable the business to avail to best carrier rates, and get control over stock inventory.
Why do you need an inbound logistics program?
Businesses without an effective inbound logistics program face many challenges. Let’s take a look at some of them -
Manual dependencies and lack of automation - Most manufacturing businesses often face shortages of raw material because they rely on outdated methods to keep track of their supplies. Also, a lack of automation in data management prevent businesses from improving and gathering information for critical decision-making. Easy availability of information would be helpful in charting out various cost-effective strategies, and providing proper logistics visibility.
Lack of visibility - A research by American Shipper reveals that almost 75 percent of supply chain management stakeholders cite visibility of freight chain as one of the most challenging aspects, second only to rising operational costs.
OTIF non-compliance - Manufacturing business is also unable to meet the on-time and in-full (OTIF) expectations due to lack of proper inbound logistics. OTIF measures the extent to which shipments are delivered to their destination, according to both the quantity and time schedule specified on the order.
Poor productivity - Customers expect nothing less than timely, cost-effective and safe deliveries every single time. To keep up with the rising demands of customers, companies have to adapt quickly to customized solutions for satisfactory deliveries. It can also help in arresting cost concerns arising out of inefficient logistics operations. Achieving customer satisfaction and loyalty can be hard when businesses also have to consider their profit margins, costs, resource utilization, and numerous other factors. An inbound logistics platform would provide the company with predictive visibility, optimized delivery operations, and mitigate risk factors. It will further allow companies to ensure that they can promise realistic and real-time estimated time of arrivals (ETA) to customers.
Why you need to embrace the inbound logistics program?
An advanced inbound logistics platform will provide businesses increased visibility, production control and logistics clarity. For all these benefits, now is the time for business to embrace an advanced inbound logistics platform.