Logistics Flow Control: Gaining Command of the Inbound Supply Chain

BUSINESS WHITE PAPER

Executive Summary

What retailers want from their inbound supply chain is simple. They want the greatest product availability with the lowest inventory. Or put another way, they want the right goods at the right and shortest time possible with the correct labeling and supporting electronic documentation to allow those goods to seamlessly flow through their distribution network to their stores or customers. However, a number of factors conspire against a retailer’s vision of a high velocity, high precision supply chain: suppliers, third-party logistics services providers (3PLs) and transportation providers with varying levels of capability and performance, disconnected processes and technologies across the supply chain, and poor synchronization of all of the commercial, logistics and customs documents from purchase order to warehouse receipt. Traditional solutions have been enterprise-focused, addressed only pieces of the retail inbound problem and in some cases produced competing and supply chain slowing results.

To meet retailer’s inbound supply chain needs, Descartes created Logistics Flow Control, a comprehensive multiparty solution that spans the entire purchase order to warehouse receipt process that collaboratively brings together all of the parties – retailer, suppliers, 3PLs, transportation services providers, and brokers to simultaneously manage commercial, logistics, and customs inbound processes. As part of Descartes’ cloud-based Logistics Technology Platform, Logistics Flow Control can be implemented in a modular fashion and leverages Descartes Global Logistics Network to get results faster. With Logistics Flow Control, retailers gain greater command of their supply chain, improving product availability, while reducing inventory, logistics, and compliance costs.

Coordinating logistics processes and participants involved in the inbound supply chain, from purchase order placement until successful warehouse receipt, requires more than paper route guides and supplier compliance programs with rules and penalties. Retailers are finding that penalties and fines are not sufficient to ensure adherence to inbound process control rules. It has proven impossible to achieve compliance and proper coordination across hundreds, and often thousands, of tier 2 and 3 suppliers based solely on paper and penalties. Suppliers, 3PLs, carriers, brokers, etc. have their own agenda when it comes to sourcing and shipping products. Product gets pushed and pooled throughout the inbound supply chain. The consequences of lagging inbound program compliance and unsynchronized activities are wide ranging, including excess in-transit inventory; receiving facility congestion; warehouse crew scheduling issues; and priority goods for promotions and events not received when they are needed most. These and other issues associated with managing the fallout of non-compliance and attempted penalty program management across a large base of technologically-challenged suppliers are costly and frustrating for all participants.

The New Requirements for High Performing Inbound Supply Chains

Traditional processes and solutions will not produce efficient or effective performance required for today’s inbound supply chains. What retailers need are collaborative solutions that are multi-party, just like their inbound supply chain, and coordinate the commercial, logistics and regulatory process simultaneously.

Through work with leading retailers, it has become clear that the following functional capabilities are required for high performing inbound retail supply chains:

• Visibility and collaboration for all of the inbound supply chain parties.
• Coordination of the entire PO to warehouse receipt process flow with solutions that align the parties to a common goal.
• Solutions that understand the impact of change and can communicate it to all of the parties.
• Provide unified visibility for commercial, inventory, shipments, and customs events.
• 360° view for all inbound parties and the expanded constituency.
• Ability to manage prepaid and collect freight.
• Compliance for all suppliers.

These new functional capabilities also demand a new class of technological capabilities:

• The ability to get ALL parties connected and collaborating.
• A network to manage the flow of information across the supply chain.
• Cloud-based solution to provide true multi-party processes and unified access.
• Data capture and leverage to improve supply chain velocity.
• A way to manage data quality.
• The flexibility to implement the solution in pieces and scale with the retailer.
• Leveraging a pre-connected community to accelerate time to value.

Logistics Flow Control: Enabling the Next Level of Inbound Supply Chain Performance

Logistics Flow Control addresses these challenges with a platform for Retailers, Suppliers, Customs Brokers and Carriers to coordinate every stage of the inbound supply chain logistics execution process.

Features of Logistics Flow Control include:

• Visibility: Retail buyers, merchandisers, and logistics personnel can know the current status, location, estimated time of arrival (ETA), and contents of every purchase order and shipment.
• Compliance Assurance and Shipping Advice Processing: A key step in bringing order to the inbound supply chain is to coordinate with the supplier on ship date, receipt date, carrier, methods of shipping, and requirements on orders that can or cannot be split, short shipped, or consolidated.
• Entry Control and Yard Management: When the time comes for the shipment to arrive, Logistics Flow Control provides enhanced security and control by validating facility entry to expected loads.
• Import Compliance: By collecting and synchronizing all commercial, logistics, and regulatory documents, Logistics Flow Control helps ensure that proper fees are paid for imported goods.
• Performance Reporting: Performance information is collected at each stage of the processes from purchase order to receipt.
• Unifying Network: An underlying infrastructure is needed to efficiently and effectively capture and coordinate data and connect the “high-tech,” “low tech,” and “no-tech” partners.

Summary

Logistics Flow Control is the next generation retail inbound logistics management solution. It is a multi-party cloud-based solution that breaks the paradigm of having multiple parties with multiple systems that are inefficient and complicate inbound logistics operations. Retailers, suppliers, and carriers use the same solution to manage the “PO to warehouse receipt process,” helping retailers improve control of inventory in motion, reduce PO cycle time and inventory carrying costs, and measure supplier and carrier compliance.