Establish a two-way relationship with your carrier to frequently share best practices, issues, and opportunities.
Conversely, disjointed transportation flow ties up space on the receiving dock.
Consider inbound and outbound conveyances, queuing up shipments by carrier, and the capability to pull orders later in the day to increase customer service.
Determine which carriers are able to accommodate business demands, depending on product type and turnaround time. Consider whether facilities issues could affect your operation.
For example, if a product doesn’t meet specifications, it must be double-handled, possibly repackaged, stored, and shipped back to the source. What’s more, lack of a reliable delivery time requires you to carry more inventory, which decreases inventory turns and increases costs for the added storage space.
To improve logistical efficiencies, consider having the vendor perform value-added services such as packaging, marking, and quality inspections.
But today more merchants are taking control of inbound freight, enabling them to influence their economies of scale and negotiating power to reduce costs.
The proactive step of instituting a charge-back policy should be clearly stated in a vendor compliance manual, with the support from senior management.
Retailers would rather have receipts arrive on time and be compliant than deal with the hassle of collecting charge-backs.
Most direct businesses need a customer to purchase two or three times to break even.
The second cost element to consider is the high cost of being on backorder.