While strategizing to elevate your shipping network, it's easy to think of transportation as the key to changing your outcomes. After all, when it comes to shipping, moving goods from one place to another is the name of the game. But what if we told you that one of the most powerful ways to improve your transportation was actually through better inventory practices?
Reinventing the Way You Look at Inventory
Picture this. You're moving through the usual inventory model, and you're finding that having your goods for up to 60 days before they are sent out to the customer is weighing down your bottom line. You need to get those products off the shelves fast. There are two common "solutions" for rapidly moving inventory that we see:
- Airfreight your inventory to the customer so that it gets there faster
- Wait until the last minute to make purchases from your suppliers
Myriad issues arise with both of these solutions. For one, airfreight is costly from an expense and sustainability standpoint. Putting large, heavy objects on planes can also lift your budget into the stratosphere. Not to mention all those carbon emissions polluting the environment. If your stakeholders are committed to sustainability, air movements are the most carbon-intensive options.
Waiting until the last minute to order from suppliers can be risky, too. COVID-19 has left unstable, volatile supply chains in its wake. There's less guarantee than ever before that the raw materials and finished goods you need will arrive on time—or anytime soon. Thanks to new variants, government shutdowns, ship backups, etc., there is no telling what potential shipping delay could come next. It's better to prepare now than find yourself caught in a sticky situation.
Luckily, there's a third solution that's often overlooked: outsourcing inventory ownership and management to experienced professionals.
By allowing a third party to take ownership of your inventory until you are ready to ship it out, you are not only freeing up your shelf space. but your finance books as well. Morgan's Inventory on Demand® offers your solution in the form of an end-to-end approach that helps improve your inventory process from start to finish.
Through Inventory on Demand®, Morgan completely owns your inventory until you are ready to actually use it or sell it. Instead of your inventory sitting static on your shelf, we keep it for you until you need it. This way, you'll take ownership for a significantly shorter period of time (sometimes 5 days or less). No more products or parts just sitting in your warehouse — this "invisible stock" becomes available exactly at the moment it's ready to be sold.
Going Beyond Shipping Strategy
Inventory on Demand® may sound like a standard process, yet not many companies out there are offering this unique solution. As a pioneer of this practice, Morgan strives to give you the very best solution for your end-to-end shipping process, going beyond simply helping with inventory.
Once you submit a profile of your goods (detailing value, annual spend, shipping costs, and O&D), we gain a better understanding of your general operations. Then, we audit your transportation and can meet with your existing suppliers to create a three-way conversation. This can help you determine what inventory needs to be outsourced. At Morgan, we strive to meet you where you are and improve upon what you've already built throughout your entire shipping process.
Our Four Pillars of Focus
As a pioneer of Inventory on Demand® solutions, Morgan can help improve your overall shipping strategy in these four ways:
- Balance Sheet Impact — We all know how stressful it can be to impress investors. How much stronger would your finances look with a faster inventory turnaround and reduced payables? By allowing third-party management of your inventory, your balance sheet looks cleaner, with improved return on invested capital (ROIC) and more attractiveness from a financial perspective.
- Transportation Transformation — Without the pressure of needing to get your inventory moved as fast as possible, you'll have time to focus on new opportunities for your transportation processes. Through third-party management, you're able to make choices for efficiency, availability, and environmental stability.
- Continuity and Customer Satisfaction — The last thing you want is a customer waiting for an item they purchased from you because you simply don't have the materials ready for production. If you have buffer stock under someone else's ownership, you're already in a better position to deliver goods in the hands of customers much closer to their purchase date. This competitive advantage of short wait times can put you ahead of the competition in a customer's eyes.
- Strategic Sourcing — Buying in bulk can often lead to better prices on expensive items. While previously, the market wanted us to fear "dead weight" inventory collecting dust in a factory, in a post-pandemic world, supply chain disruptions can lead to raw materials becoming unavailable if you don't act fast. If you buy more goods at the front end of the process and pass that inventory off to third-party management, you have the parts ready to go when you need them.
Our Inventory on Demand® has already proven to help reduce air freight expenses and shipping costs on both a national and global level, even going as far as to reduce $1 million in annual transportation costs!
Transforming Your Inventory Through Third-Party Management
At Morgan, we strive to be a long-term partner for your shipping operation. Our team is ready to help you create a completely customized plan to elevate your shipping operation and assist your organization in reaching its goals. Reach out to us today to start a conversation.
