In my first post in this series, I introduced The Happy Flow and the positive effect it has on the bottom line. In my second post, I covered several real-life examples of companies that have improved their supply chains with 3D load building.
Manufacturing Transportation Capacity
Some manufacturers only have estimates, or even guesstimates when it comes to the transportation capacity they need. Some have actual numbers and (think they) have an accurate forecast of the capacity.
There can be different reasons why the loading meters needed for a shipment are recalculated at the warehouse. In this blog post, I’d like to discuss some examples I have encountered over the years.
Some make perfect sense, while others may be surprising. The first example was a surprise to me at least.
Recalculating at the Warehouse: Examples from the Real World #1
A manufacturer has hired a logistics service provider to take care of warehousing and shipping out their product. The information this manufacturer sent to the service provider didn’t contain accurate master data. It simply wasn’t available. In this case, the logistics service provider started to build its own database with master data, to be able to forecast the transportation capacity and calculate the loads. While the manufacturer benefitted from this, it was also a risk. If the service provider has more knowledge than the manufacturer, it is difficult to switch service providers if the need arises.
Recalculating at the Warehouse: Examples from the Real World #2
There are countries, for example in Asia, where truck dimensions are not standardized. As long as you know which truck is coming this is not a problem and you can calculate the load in advance. When you don’t know in advance you need to calculate the load when the truck arrives.
Recalculating at the Warehouse: Examples from the Real World #3
If a manufacturer ships out quantities that are Less Than a Full Truckload (LTL) and uses a service provider for their warehousing and shipping, the manufacturer has no full visibility of what is loaded in the truck. The service provider may combine loads. This means loading calculations need to be done in the warehouse, where there is full visibility of the shipment.
Recalculating at the Warehouse: Examples from the Real World #4
Some manufacturers send sales orders to their logistics service providers as soon as they are approved for revenue recognition reasons. This can create inefficiencies, especially if the warehouse service provider has no room when it comes to the shipping date. If there is room, the service provider may be able to combine orders. In this case the calculation of the needed capacity can only be done by the service provider if he is the only one with full visibility.
Recalculating at the Warehouse: Examples from the Real World #5
Sometimes the reason to recalculate has nothing to do with master data, or loading capacity. Sometimes the driver is warehouse productivity. Let’s say you can save a little by combining certain goods into one shipment. Now what if these goods are in completely different parts of the warehouse, and it takes a lot of time to pick them. The transportation cost saved is then offset by the additional cost of picking the goods. In this case the calculations also need to be done in the warehouse, where all the information is available.
Calculate or Recalculate: Knowledge is Key
Whether (re)calculations are done by the manufacturer or by the logistics service provider, the most important thing is that they are done. There is no way to increase the efficiency of your logistics operations if you don’t know what’s going on. Make sure your data is in order and that you measure the right things.
More Where That Came From
In each of these examples, the service providers recalculated the transportation capacity to improve the efficiency of their logistics operations. There are more ways to improve your logistics flow with 3D Load Building. These are just a few of the many examples I could tell you about. If you want to know other ways to save money with 3D Load Building, then read my blog 13 Ways to Save Money with 3D Load Building or connect with me on LinkedIn and send me a message.