As your business grows and becomes more dynamic, so does your supply chain. While your strengths lie in earning new business, marketing, and/or operations, it is difficult to dedicate the proper time to your supply chain. Growth is a time to reevaluate your current logistics process and find opportunities to streamline and save. But where do you begin this process? What type of evaluation is required to determine what the best fitting solution for your needs?
Before you begin talking to vendors or implementing changes, it’s important to gain full visibility of how your supply chain operates today and determine costs involved, both hard and soft. Below are 3 steps to take to determine the current state of your supply chain.
1. Identify your shipments
Although this may seem like an obvious first step, it’s easy to overlook your inbound and drop shipments. Things like raw materials, supplies, retooling, and returns are real costs that affect transportation but are often overlooked during the evaluation. Begin by identifying all of your outbound shipments including frequency, quantity and lanes. Next, create a list of all your inbound and/or drop shipments, again including the frequency and quantity. Make sure to reach out to all departments when creating your inventory to find additional streamlining opportunities. Once all shipments have been identified, you are a step closer to gaining full visibility into your supply chain.
2. How are you shipping?
The next step is to record how you are shipping and receiving. Identify what modes and carriers you are utilizing for your current shipments. Are you mostly shipping small packages to residences or truckload quantities? It is important to focus on your specific needs and not a large portfolio of services and vendors that don’t fit your needs. If possible, also note any shipments that required additional support or did not go as planned. The more detail you have on your current logistics process, the better you can put proactive solutions in place to prevent these complexities from arising unexpectedly.
3. Capture the Cost Involved
The last step in evaluating your current supply chain is to capture the associated costs involved. This includes shipment level details, as well as, the internal cost of negotiation, quoting, shipping, exception management and freight bill audit and payment. As you identify the parties involved it is helpful to ask how much time per week or month they spend on these items to evaluate whether or not outsourcing any of those tasks is a viable option.
The goal of these 3 steps is to gain greater visibility into your current logistics processes. Through these simple steps, it is important to reach out to all departments and identify their role in the process. All too often, companies’ have narrow views of their logistics program and departments within these organizations work in silos. In order to find all cost saving opportunities, you must gain a holistic view of all your inbound and outbound shipments.
Are you Ready to Make a Bid? Below are additional resources to help you prepare to make a bid to a 3PL: