Inbound transportation & logistics process is also observed as being significantly different for inbound materials logistics for a manufacturer, as opposed to the process employed for finished consumer goods purchased by brand owners or marketers/distributors from vendors, as it is yet again for aftermarket spares.
Merge logistics can also be employed, especially so at Supplier Owned Inventory (SOI) hubs. These position inbound materials close to factory locations, under processes normally designed by the yet-to-be-owner. Another merge logistics process, among many, can be seen en-route from production to consumer with new agricultural equipment or automotive vehicle make-ready hubs where accessories are installed at locations close to, yet ahead of, final delivery.
Irrespective of the legal ownership of the inventory, in the case of SOI or make-ready hubs, there is usually more transparency & inventory detail provided to the receiving party ahead of shipping than is the case for purchasers of regular consumer goods inventory from vendors or screwdriver plants. It is sufficient at this point that we mark this as noteworthy, because we will be returning to the matter at a later time.
Before we leave this general subject in respect of inventory detail and inbound logistics processing, we want to mention the notion of buyer consolidations and vendor compliance. Before in this blog, we have mentioned the Sears Roebuck Asian export buyer consolidation and vendor compliance programme that we first came across decades ago. Essentially, instead of performing the inbound logistics process wholly at destination in the USA, inventory was receipted to case ID level, and was made available in a process called pre-distribution. This process as-a-whole enables the creation of multi-vendor export consolidations by a buyer’s logistic-transportation representatives to individual regional fulfillment DCs in the destination country. Re-documentation services were usually provided under specific power-of-attorney.
The buyer consolidation process also provides the opportunity to re-route orders at the last minute if the buyer is seeking to optimise stocking levels at regional destinations to be in line with emerging demand patterns, or to optimise available transport capacity across modes, carriers, or routes.
Unfortunately, and especially so given the positive elements tactically enabled as stated above, we do not believe the buyer consolidation / vendor management programme adds sufficient value in most contemporary circumstances. This is due to the inherent process clunkiness introduced into the supply chain in comparison to other options available, those that might see disintermediation maintained for large-scaled e-commerce consumer & B2B markets.
So while we are yet to make much of a dent today in respect of describing the transport network fabric possibilities, we have started to illustrate the widely variant locations within the supply chain where fulfillment and/or demand optimisation processes have been undertaken.