Transparency Builds Trust – Inbound Logistics

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Tags: Inventory Management, Transportation

How transparency enhances and strengthens supply chain partnerships.

The complexity of the supply chain can be daunting. Everything from distribution to data crunching requires dedicated attention that can feel overwhelming unless you have the right tools in place or the right partners to back you up.

On episode 120 of the Inbound Logistics podcast (bit.ly/ILMagPodcastPage) Marty Wadle, chief commercial officer and Paul Jensen, senior vp of supply chain solutions for Ruan, an Iowa-based logistics provider, spoke about the importance of transparency and trust in the industry. Here are the highlights of their interview.

IL: How do your partners and customers benefit from working with an integrated solutions provider that offers value-added warehousing, a dedicated fleet, and a managed transportation system?

Wadle: A single integrated solution removes waste and duplication and creates a stronger relationship with the customer. It creates inventory visibility throughout the supply chain—whether it’s raw materials inbound, work in process, or finished goods.

If you work with one logistics provider, you see the freight all the way through the process. Visibility across the entire supply chain when you’re working with one provider is a huge benefit.

A single, integrated solution also enables rapid response to supply challenges. If we see what’s going on in the entire supply chain, we’re able to effectively maneuver around a clog, wherever it might be. If we see where we have challenges—at the ports or with containers coming in from overseas—then we can do other things to expedite freight once it hits our borders to get that product to customers more efficiently.

We also look at ways to work with our carrier partners to put them on continuous moves. Shippers today are looking to be a shipper of choice. As we act as an extension of our customer, we do our best to create that shipper of choice view from our carrier perspective: How quickly can we get carriers in and out of the docks? Can we put two or three different lanes together to create a continuous move, keep that carrier moving, and eliminate their empty miles? That just creates a better solution.

We also look for backhauls for our dedicated resources that may be delivering finished goods for one of our value-added warehouse customers. The trucks can pick up inbound raw materials or other third-party freight so we can keep dedicated assets loaded at all times. That drives continuous improvement and takes waste out of the system for customers.

Jensen: A common theme across the different services that we provide is transparency. On the dedicated fleet side, we’re 100% transparent. On the managed transportation side, we’re 100% transparent with our customer—from a service, cost, and carrier payment standpoint—and that develops a sense of trust with customers.

We operate best when we’re part of our customer’s enterprise. We bring the most value when we’re included in strategic discussions about the direction of their organization, when our goals and objectives are fundamentally aligned. And that starts from the first day we engage with a customer.

We are all about being as transparent as possible, so that the decision-making on both sides—from our customer’s perspective and our perspective—drives toward a common goal.

IL: What are some innovations that Ruan has implemented where you really see that value-add in play?

Jensen: Every implementation of a solution begins with the needs of the customer. Whether that’s a sophisticated racking system or a complex pick-to-light, multifaceted kitting operation that directly feeds manufacturing lines, we build solutions that meet a specific customer objective.

That includes both finished goods on the outbound side as well as inbound raw materials through a consolidation center. We bring product from across the country into a single consolidation point for splitting, cross docking, reconfiguring, staging, and shipping to various manufacturing sites.

It starts with what our customer’s needs are. As we get into a customer’s business, and we start to learn what their supply chain chokepoints are, we can help them design a better solution that feeds through that distribution process. We understand what it takes to run assets, what it takes to manage carrier relationships, and what it takes to run distribution and finished goods shipping.

IL: When shippers look for a warehouse partner, a lot of thought has to go into that decision. What are some of the things shippers might overlook when they evaluate a new partner?

Jensen: As proposal systems and technology have gotten better, the nuts and bolts of how to share requirements has gotten easier over the past five or 10 years. What hasn’t gotten easier is understanding who your partner is going to be—getting to know them. And not just the services that they provide, but the type of organization they want to be. The way they behave, the way they interact with their customers, and cultural alignment is often overlooked. You need the ability to meet each other’s needs in a transparent way and develop a sense of trust.

When you go out and try to find the right partner, understanding who they are and what they want to be is just as important as pricing and capabilities because your needs will evolve.

I saw this on the shipper side when I worked for a seed manufacturer. In the five years I was there, our business in that industry changed dramatically with complexities that were injected into the manufacturing process, which resulted in much different distribution. Having a partner who could work through that with us would have been a lot easier than trying to figure it out on our own. That’s the kind of partner we want to be.

I’d also caution folks as they look to build a distribution network, build out a regional distribution concept, or just take distribution out of manufacturing to allow more space to create material. Don’t shortchange your long-term plan. Often, in the interest of saving a few dollars on the front end, companies want to buy into a smaller facility that meets today’s needs, but it won’t meet their needs in three to five years. Take a hard look at what your long-term plan is and build for who you want to be—not for who you are.

Although it’s more expensive in the near term, it’s a lot less expensive in the long term to be in the right facility, as opposed to having to make changes along the way as you implement your growth strategy.

Wadle: We perform site analysis for potential customers. One thing that you look at is identifying the right location for your inbound raw materials and for your outbound finished goods locations, to reduce that transportation spend.

Once you’ve picked that location, you also want to look at where you will draw employees from to fill that warehouse. If you’re in a spot where you don’t have access to enough team members, you will be challenged.

We work with our customer to make sure that not only do we find the right location from a transportation standpoint, but also decide if it is the right location for staffing inside the facility. Then we work closely on the configuration.

If we know that a customer’s growth projects that they will need 450,000 square feet in four years, we don’t want to get them into a building that’s 250,000 now and then we’ve got a year to figure out how to add to it or move into another location down the road. We work with the customer to configure the portion of that building they need with the ability to grow into the balance of it.

In the meantime, we’ll work with other partners, other shippers, to bring in third-party freight to defray the cost of that facility so customers can take the full building and be able to grow into it eventually.

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