April 2014 | Sponsored | Knowledge Base

Automating Key Steps to Strategically Optimize Inbound Supply Chains

Tags: Logistics I.T., Cross-border Trade, Global Trade Management

Ty Bordner, is Vice President, Solutions Consulting, Amber Road, 201-935-8588

The increasing growth and complexity of global trade means organizations must work with a range of partners, suppliers and functional teams within the organization. Best in class companies use a variety of global trade automation tools to lower inbound costs and improve processes. According to a recent AberdeenGroup report, "Strategic Inbound Optimization: Foreign Trade Zones and Reshoring Increase," over 85 percent of companies recognize the importance of strategically optimizing their inbound processes.

Based on AberdeenGroup's research, best in class companies automate several key inbound strategic actions. Some of the results achieved include:

  1. Optimization of carrier selection, shipment consolidation and multi-leg and multi-mode optimization. Managing the flow of goods across borders involves many more steps and parties than a domestic move. As such, companies need solutions tailored to addressing international transportation management. The benefits of automating these steps include reduced transportation costs; improved customer service with increased on-time deliveries; minimizing freight expediting costs and increasing operational efficiencies by eliminating manually intensive processes. An end-to-end international transportation management system addresses several issues, including: contract and rate management; carrier selection and booking; route optimization; retrieving and comparing rates across multiple legs, transshipment points, weight tiers, providers, and services.
  2. Accurate landed cost calculations. The logistics costs associated with operating a global supply chain can be 6 to 11 percent of revenue, roughly 3 to 5 times more than a domestic supply network. These logistics costs are not transparent. Companies must calculate fluctuating rates from accessorials, such as fuel adjustment factors; determine total shipment cost with multiple charge elements not traditionally available in one format or from a single source; compare all available routes under contract; and centrally manage international transportation contracts to ensure company-wide standard practices and visibility.
  3. Dynamic hub optimization. A single data repository accessible company-wide allows individuals to access the wealth of operational data available in logistics, compliance and trade processes. This data can then be used to run reports or manage and share key metrics and operational data across compliance, logistics and procurement domains; make data-driven decisions; develop continuous improvement programs; and have one aggregated source of cleansed data.
  4. Real-time supply chain control. Real time control, including alerts and event management capabilities, allows companies to respond rapidly to supply chain events; realign sourcing, mode or routes as needed; redirect in-transit flows and orders in response to higher demands or inventory imbalances; and support programs such as DC Bypass. Other benefits include lessening operational bottlenecks and reducing cycle times; eliminating excess inventory; minimizing expedited shipments; and improving customer service. Organizations can also collect and analyze key compliance metrics from real-time control to improve operations.
  5. Inbound / global trade functionality. Companies gain many benefits by adding global trade automation to their inbound processes. In addition to gaining complete visibility into the import process, reducing inbound cycle times and decreasing supply chain costs, and improving landed cost accuracy, companies can proactively manage the import process; improve regulatory data accuracy and reduce errors; intelligently screen trading partners and other entities; and ensure adherence to import compliance regulations. Automating document management, entry management, post-entry actions, product classification and admissibility review and security filing are all processes that facilitate inbound supply chain management.
  6. Improvement of suppliers' information exchange. Automating supplier management increases supplier order fill rates and order accuracy; lowers inventory safety stock levels; shortens inbound supply lead times and order cycle times; improves purchase order (PO) compliance and reduces regulatory risks; increases inbound supply predictability; streamlines the PO import process and reduces brokerage fees.