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In an environment of increasing freight costs, greater pressures on supply chains, and ever-expanding competition, shippers need to focus on where they can cut costs and increase operational efficiency. One such area that offers the greatest opportunity is shipping network optimization. The question is, how can a company optimize its shipping network? When creating a strategy to optimize your shipping network, you must keep in mind that each new warehouse should accomplish 3 goals:
As eCommerce continues to take on a larger and larger portion of your business, planning and building the optimal shipping network will continue to play a huge role in creating competitive advantage.These factors should result in a determination of how many new warehouses you should add, and where.
Depending on industry, an optimal shipping network might include the ability to reach all states in two days, while for other industries they might be a pure margins game. Certain carriers have strategic zip codes and cities that fit perfectly into their network, while most companies are headquartered in only a few, or even a single, location.Optimizing your shipping network doesn't only include adding new warehouses, but removing some as well. Shipping networks built 5-15 years ago are often out of date, carriers are increasingly able to deliver more packages from more zip codes in 2-3 days. Given the changing landscape, it's important to calculate costs and transit times based on today's rates, not a decades old footprint.Shipping network strategy should be developed by following three steps:
Each new warehouse you add should accomplish two goals, decreasing your cost per package and lower the amount of time your customers wait for their packages. As e-commerce begins to comprise a larger portion of your business, planning and building the optimal shipping network is a key cornerstone of a competitive advantage.
The recipe to success is predicated on having a partner who understands your shippings costs and transit times to your customer base. Our proprietary formula, uses industry benchmarks coupled with modeling that is built around your data. Our formula is able to calculate the total savings, optimal redistribution of packages to new and existing warehouses, and determine how many and where you should add.
Dependent on your industry, an optimal shipping network might the ability to reach all states in two days Ground for other industries they might be a pure margins game. Certain carriers have strategic zip codes and cities that fit perfectly into their network, while most companies are headquartered in a few or just one location. we overlap the two networks to find the perfect fit for you.
The network you built 5-15 years ago might now be an overkill. Carriers are increasingly able to deliver more packages from more zip codes in 2-3 days. Using our audit backbone, we are able to calculate costs and transit times based on today's rates, not a decades old footprint.
New warehouses should reduce both cost per package and the time customers spend waiting for packages to arrive. A shipping network strategy must take into account shipping profiles for different times of the year. For example, a peak seasons such as Christmas/New Years might require a unique strategy to manage the chaos that might ensue, mitigating the risk of being overwhelmed.
Depending on your industry, an optimal shipping network might the ability to reach all states in two days Ground for other industries they might be a pure margins game. Certain carriers have strategic zip codes and cities that fit perfectly into their network, while most companies are headquartered in a few or just one location. we overlap the two networks to find the perfect fit for you.
Industry success is predicated on partnering with those who understand customer shipping costs and transit times. IA's proprietary software uses industry benchmarks and modeling to calculate package distribution per warehouse and total savings - helping you select the right warehouse locations to support your business and shipping needs.
Competitive pricing and the growing diversification of retail product lines has put supply chains under pressure to reduce cost and move inventory at a much faster rate. IA's sophisticated auditing capabilities can quickly calculate costs and transit times based on daily rates - allowing you to eliminate unnecessary and costly warehouses within your network.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
