How to Optimize Inbound Logistics to Increase Productivity & Profitability?

inbound logistics

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Logistics networks play a huge role in the smooth and efficient functioning of business operations. It is imperative that companies should invest in their logistics divisions as scrutinizing the storage, transportation, and dissemination of goods is necessary to enhance the supply chain processes. Logistics operations tend to coordinate the movement and storage of resources such as goods, inventory, equipment, etc.

Effective and well-organized logistics management ensures the right product is delivered to the right customers. It is the foundation of the supply chain and is beneficial for the overall productivity of an organization. Thus, it seems to be indispensable to capitalize on the market without optimizing logistics.

Inbound and outbound are two different types of logistics. Strategically designed activities deliver maximum performance. With a sound supply chain and logistics processes, a company can get a decisive competitive advantage over organizations.


What is Inbound Logistics?


The inbound logistics process refers to the way products (raw materials) and other goods are brought into the business. The main function is to manage the movement of assets inside a warehouse and the control of stock. The inbound logistics network comprises steps to order, receive, store, transport, and everything your business needs to fabricate a finished product.

Therefore, optimizing your inbound logistics management can directly impact your business productivity and profitability. It is advisable for organizations to invest in end-to-end management of inbound logistics to stay ahead of the curve.


Activities of Inbound Logistics


  • Sourcing and procurement- Finding out potential suppliers, getting price quotes, and negotiating with existing contracts.
  • Ordering/Purchasing- Placing orders and buying the goods and materials that the company requires. 
  • Transportation- Choosing the best mode of transportation and evaluating the price and route with the third-party carrier.
  • Receiving- Receiving and handling the ordered material. Also, ensuring the quality and quantity of products.
  • Material management- Moving and staging the arrived material within the facility.
  • Storing & warehousing- Managing and storing the material in the right condition before they go to manufacturing or customer fulfillment.
  • Inventory management- Keeping track of what type and amount of raw materials/items should be stored.
  • Distribution and tracking- Sending supplies to their destination and tracking the orders in real-time.
  • Reverse logistics- Bringing the raw material or goods back from the customers, in case of any defects, delivery problems, repair, and refurbishment.


How to Optimize Your Inbound Logistics Operations?


Managing logistics can be a daunting task for an organization, building an effective strategy can help the operations to become faster, leaner, cost-efficient, and more agile. Streamlining this process can help you to get deep insights and demonstrate the impact of different scenarios on business profits and customer satisfaction. 


Maintaining a strong relationship with suppliers

Strategic partnerships with your suppliers can yield benefits to both parties. Identify the most optimal routes, cost-effective mode of transportation and also define standard operating procedures. It will help the supplier understand your business better.

.A supplier compliance plan can limit rogue expenses by suppliers as it tends to explain your business requirements and regulations. For instance, penalties regarding the late delivery or not following route guidelines. It will reduce freight and warehouse costs and also enhance customer satisfaction. 


Use a fleet management system

The software tends to automate, manage and optimize the fleet operations with ease. Most of the time, the company does not have access to changing rates based on the market conditions, by implementing fleet management system you can get a comprehensive overview of the shipping quotes and service levels among different carriers.

In addition, these are some of the major details that can increase efficiency and reduce overall operational costs which can lead to the growth of your business. 


Implement Vendor Compliance Policies (VCP)

You can optimize the logistics operations by streamlining the entire supply chain process. It is necessary that the suppliers sign up and agree to a set of VCP, this will eliminate the negative consequences caused by supplier-specific behavior. 

Reinforcing your standards is useful for a smoother running of operations. Certainly, a strong monitoring system for VCP could be an effective way to ensure that suppliers agree to rules and regulations. Therefore, executing financial penalties for those who break the guidelines would help you to optimize inbound logistics process. 


Model your current process and develop strategies

Get a comprehensive overview of inefficiencies related to cost, duplicate work, information gaps, and delays in the business. Moreover, build strategies that can eliminate the intangible costs in inbound logistics. It is essential to develop risk assessment tools to handle errors.

Similarly, embracing technology such as vehicle tracking system can help you to evaluate your business model to make more informed and data-driven decisions. Automation and analytics is considered to be an effective strategy to address inefficiencies.


Consolidate shipments

It is known to be an effective method to save transportation costs as the less-than-truckload (LTL) shipments have higher costs in terms of shipping and loading. There are different handling of goods, some of them require a specified temperature so this is one of the major barriers to consolidating shipments. 

Moreover, a third-party logistics provider (3PL) can ensure that the movement of goods and materials into your business aligns with your operational objectives. Combining deliveries can reduce the number of trips that need to be made.


Key Benefits of Optimizing your Inbound Logistics


Monitoring, managing and optimizing inbound shipments can lead to increased production, and administrative support. In addition, get the insights and analytics of your logistics operations to deliver unmatched customer service and experience. 

Here are some of the benefits of efficient logistics:

  • Evaluates and identifies opportunities to reduce freight costs.
  • Better resource management
  • Enhance customer satisfaction and improve on-time deliveries.
  • Proactive notifications and administrative efficiency
  • Improve supply chain KPIs


Final Thoughts


Inbound logistics focuses on early aspects of the supply chain processes. Optimization of inbound freights provides all operating units of the company with necessary supplies on time. Therefore, Axestrack ensures that your business gets result-producing solutions and a complete overview of products from suppliers to transporting those products to your facilities and distributing them. 

To sum up, there are several businesses that rely on inbound logistics as it includes everything your business needs to create the finished product. It is considered to be a major part of transportation strategy and makes a substantial contribution to maximize sales and increase revenue.