Ensuring that your customer is delivered the right product at the right price, at the right time, and in perfect condition, can mean success or failure for your business. So many elements make up the supply chain, from production to shipments delivered to an efficient warehousing operation through to the final delivery to your customer. All of these elements are dependent on the others for smooth operation, so it is critical that each element and the link between them work effectively in order to deliver overall success. Having the right warehousing services as part of your supply chain is as critical as any other part of the process.
Whether you’re supplying industrial products for B2B customers or consumables for a B2C ecommerce business, the principles for successful delivery are the same. In this article we’ll be covering which key factors you need to consider when choosing the right warehousing, within the context of an effective supply chain, to help ensure success for your business.
The Right Supply Chain Model for Your Business
Before choosing the right warehousing solution, it’s essential that you’re clear on which supply chain model works best for your business. In order to identify this, you need to first ask whether you should opt for a single or multiple logistics provider, supply chain model.
According to your business structure and strategic plan, you might be best suited to selecting logistics providers based on playing them to their strengths, i.e. a standalone warehousing operation that excels in storage, fulfilment and distribution or one as part of an integrated provider that can offer a seamless service throughout the entire supply chain.
Multiple Logistics Provider Model
Using multiple logistics providers is to employ a variety of third party organisations, selected upon the main focus of their activities or as a result of a recommendation.
On the plus side, having multiple providers can minimise the risk to your business should one company be unable to manage your requirements, and you can scrutinise costs between them for each part of the supply chain so that you feel that you’re benefiting from cost saving along the way.
The flip side of this approach is dealing with multiple contacts, managing quote comparisons each time and can mean using a variety of 3rd party systems. Keeping track of all of this can be extremely time consuming and a headache.
Overall the most challenging and critically important aspect of this approach is maintaining control. Management of this activity can be costly in terms of time and resource, and focus could be lost on other key areas of your business. However, if you are fixed on playing each party to their perceived strengths regardless of the added workload undertaken by you, then this model could be the right fit.
Single Logistics Provider Model
This is where you could choose to work with one logistics provider and consider them to be your ‘logistics department’. This approach would be an integrated approach to your supply chain management and would encompass all stages of the process, from point of origin, to destination warehouse, through to delivered to the end customer and all managed by one entity on your behalf.
The benefits of working in this way are touched on above and include the following sections:
Opportunities to enhance efficiencies in relation to your logistics operation are plentiful and include:
- Significant savings can be made on employment costs as there is less or no requirement for an internal logistics department or training needed for this. Consider also the long term effects of this model in terms of scaling up your business as it grows, you won’t need to invest in the way that you would with an internal logistics department.
- Working with a partner that offers a warehousing solution will also save you the expense of renting or purchasing your own storage facility and the benefits of this are considerable, as you would not be responsible for:
- Renting or purchasing equipment like forklifts and vehicles
- Health and safety of employees and visitors
- Keeping your space at capacity in order to justify the cost of the facility
- Flexing labour costs, so that you are not wasting money on labour that you don’t need
- If your partner’s warehousing facility is located centrally in the country with easy access to main road networks and airports, you will save on the cost of transport.
- The cost of logistics services like sea, air and road freight can be positively impacted using a single provider due to them being able to make an overall viable profit from all parts of the supply chain rather than just one area.
- Efficiencies can be gained in your business by using one system that belongs to your logistics partner as opposed to having to log in to several systems across multiple providers. This can save huge amounts of time, giving you control and absolute visibility of your supply chain, which in turn can help you make important decisions swiftly and more easily.
- Long-term relationships can be nurtured through this model and bring huge benefits including stability, trust, shared values and efficiencies through knowing each-others processes inside and out.
PO Management (or ‘purchase order management’) is an extremely valuable asset to have as part of managing your supply chain, if your logistics provider offers this.
An on-line portal is made available by your logistics provider for you and your supplier in order to give all 3 parties visibility, and give you control of purchase orders in process. Benefits of using this system include:
- You will be able to issue purchase orders to your supplier via the PO Management System. Your PO will be sent directly from your ERP (enterprise resource planning) system to the PO management system, which your supplier will be able to receive. This cuts out less efficient processes like email and ensures visibility for all parties at all times.
- The supplier will be able to let you know when the goods are ready in line with collectively planned ready dates, all via the system.
- Your supplier can also issue photos of the finished product and you can manage PTS (permission to ship) using the system, which gives you complete control.
- Your logistics provider will also be able to view all of this information in order to schedule the right transport solution and alert and book delivery slots with their warehouse ahead of delivery, helping the warehouse to plan and manage space and labour effectively.
- All this saves you immeasurable time and helps all 3 parties to seamlessly manage the entire process.
Diagram of the PO Management System in Principle:
Live Shipment Tracking
From activating PTS at the point of origin to ETA at your designated warehouse, live tracking provided by your logistics partner gives you complete visibility of the movement of your goods via air, sea or road transportation.
Benefits of live tracking include:
- 24/7 access to an on-line portal giving you visibility of all live and past shipments.
- Automated event notifications to keep you updated of any changes / delays to your planned shipping schedule.
- Upload and/or view shipping documents.
- Schedule reports directly from the system to your inbox.
Warehouse System Integration
Having the right warehousing solution with system capabilities as a part of your supply chain can really pay dividends and includes the below benefits:
- Access live stock reporting. Having your finger on the pulse to live stock located at a 3rd party facility is crucial to a successful supply chain and key to choosing the right warehousing solution. Having access to live stock data ensures that you have accurate information to fulfil your customer orders (whether they’re B2B or B2C) and gives you sight of your inventory to effectively manage your suppliers with future purchase orders.
- Integration of your ERP system with your logistics partners WMS (warehouse management system) means that you can upload customer orders to be picked, approve orders for dispatch and cut out endless emails and paperwork, which in turn will massively reduce the chance of potential errors.
- Integrate your ecommerce platforms. Live integration between the WMS and your website and/or Amazon or eBay store can ensure that your advertised on-line stock levels are accurate, giving your customer the right information every time.
- Live tracking of dispatched customer orders. Once your customer orders have been dispatched, live tracking information can be made available through system integration for both you and your customer, leaving no doubt as to where the goods are during this critical last stage.
Bespoke Warehousing Solutions
Businesses that supply goods often have different requirements when it comes to storage and distribution, so finding a flexible and bespoke warehousing solution is paramount to making sure that this part of your supply chain is effective and fit for purpose.
Warehouse and fulfilment solutions can be found in the form of specialists in one industry, i.e. fashion & apparel (hanging garments, preparing goods for specific retailers in line with their requirements) to general industries, handling a variety of different products.
Regardless of which form of warehousing solution you go for, your specific needs will likely differ from that of others in terms of space required for storage, type of re-working required for your products, product turn around, hours of labour required and added value elements like; customer service managed by the warehouse on your behalf.
Therefore you will need to choose a warehouse partner that is flexible and capable of providing a specific package that meets your individual needs as a business. Not paying attention to this could cost you in terms of process efficiencies and actual monetary costs.
Selecting Your Warehousing Solution
Whether you choose to employ a single or multiple logistics provider model, these features should be considered when choosing your warehousing solution:
- PO management & live tracking from manufacturer to warehouse – Does your logistics provider(s) offer these solutions to help drive efficiencies and give visibility up until point of delivery to your warehouse?
- Seamless transitions throughout the supply chain – How will the warehouse receive information regarding deliveries to them and can they be flexible to accommodate changes due to unavoidable delays in the supply chain?
- System integration – What system(s) does the warehouse use? Can they integrate with your ERP and on-line platforms?
- Bespoke warehousing – Can they build a bespoke package fit for your purpose, guaranteeing you space and labour as and when you need it? Can they effectively manage your value added requirements like re-working of products to your specific customer requirements?
- Live tracking of dispatches – Which carriers/couriers does the warehouse have contracts with and do they offer the service levels and live tracking capabilities that can give you visibility of customer deliveries, and in turn can you offer this to your customers?
- Distribution cost savings – Does your warehouse frequently use certain carriers/couriers and could you therefore benefit from better rates by using their account?
Good luck in choosing the right warehousing to support a successful supply chain for your business.
For more information on warehousing and supply chain solutions, visit our warehousing page here www.pinnaclefreight.com or for more personalised advice and guidance on this subject, feel free to contact us our UK team +44 845 6216 111 / firstname.lastname@example.org or US team +1 757 306 1211 email@example.com