Welcome back to another edition of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I’ll be reviewing a whitepaper entitled “Inventory in Motion — A Direct Alternative to Global Fulfillment” from UPS Supply Chain Solutions.
While the whitepaper serves somewhat as a marketing piece for UPS – and I typically do not review marketing-style whitepapers – I thought that this whitepaper had a few good nuggets of advice and UPS’ value proposition actually sounds quite good (at least on paper or pixels).
The entire focus of this whitepaper is on eliminating the points at which inventory is stopped to be stored or redirected. While UPS uses the terminology “direct-to-store” to describe the perfect path for goods, it could have easily been described as “direct-to-final-destination” as the methods do not have to be restricted to just the retail supply chain. I see many supply chain leaders struggling with initiatives to reduce the number of distribution centers and simplify their distribution networks, so any advice on this topic is welcome.
As is commonly noted in the field and is noted in this whitepaper, leveraging supply chain technology to identify and react to demand patterns in real-time is critical. Visibility into what-is-needed-where is a prerequisite to moving towards a direct-to-final-destination goods movement model – a model that is being driven by an increase in global sourcing (at least in total over the past decade and not so much in the past year) and the fact that “powerful retailers and other end customers with clout are starting to push value-added supply chain responsibilities further up the supply chain. More customers are asking manufacturers or third-party logistics providers to label and prepare individual items so the products are ready to go straight to store shelves.”
One thing in particular that I really liked about this whitepaper was that it gave criteria for identifying the most appropriate goods to move to a direct-to-final-destination model. These criteria included:
- “Products whose value expires or diminishes past a certain date”
- “Products tied to specific holidays or seasons”
- Products with “allocation predictability”
- “Higher-value goods”
- “Emergency/back orders”
- Products provided by “high-growth companies” who “might be unable to build additional distribution centers but still prefer to reduce strain on existing infrastructure”
- “Custom-manufactured products”
The whitepaper goes on to cover the risks and rewards of implementing a direct-to-final-destination approach before ending with UPS’ sales pitch. However, these excerpts from the sales pitch make me feel that UPS’ services are worth considering alongside your other alternatives, such as doing everything in-house:
- The entire shipping cycle is under the management of one logistics provider—one point of
contact and one bill. UPS picks up the packages and freight from the manufacturer or supplier and delivers the products to multiple destination addresses.
- UPS can apply storeready labeling, provide special packaging, kit—even perform light assembly between pickup and delivery.
- Customers can track the movement of shipments down to the item/SKU level with a UPS software visibility tool called Flex® Global View. The tool provides 24×7 visibility across borders, across third-party transportation providers and across transport modes—even providing proactive alerts if there are unexpected delays in the shipment.
Of course, nothing in a whitepaper can ever replace solid due diligence on your part. So whether or not you’re looking to outsource part of the logistics, you should be thinking about ways to simplify the path of goods through your supply chain. This whitepaper can help you get in this mindset. And there is no registration required, so I recommend that you download it from UPS Supply Chain Solutions’ Web site.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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