In the realm of modern logistics, this promising solution is gaining traction worldwide. Here in North America at our Brimich Logistics Inc. facilities, this innovative approach is being implemented. As one of the first facilities in North America to adopt this system, we are proud to say it has helped to align with the growing emphasis on sustainability in our supply chain practices.

Industry Snapshot

From perishable foods to life-saving pharmaceuticals, maintaining precise temperature control throughout the supply chain is not just a preference; it’s a necessity. There are two dominating factors causing food waste in the Logistics and Supply Chain industry:

1. A lack of high-quality reliable Cold Storage temperature control
2. Inefficient handovers causing unforeseen breaks within the supply chain.

Brimich Logistics Inc. is dedicated to offering dynamic customizable solutions for clients, so that we can each strive in this area.

Brimich Logistics Inc.

Among early adopters of these CO2 systems is Brimich. Our very first Cold Storage CO2 facility was opened at 470 Hardy Road in Brantford Ontario in 2021. This adaptive strategy has become one of the most crucial value-added services for clients’ dynamic and ever-changing needs. To date, a portfolio of core high-profile clients are uniquely serviced at our 130,000 square foot CO2 Cold Storage facility in the Oak Park industrial area in Brantford, Ontario.

This initiative has lasting impacts on the client’s bottom line, efficiency within the Cold Storage supply chain and environmental benefits. Ultimately this service offering directly improves company bottom-lines and the quality of product the end consumer receives. Proper temperature control is vital for keeping frozen foods fresh as approximately 13% of all globally produced food is lost each year due to poor supply chain processes.

At Brimich, we strive to continuously adapt to this dynamic and vast industry. Our goal is to remain impactful and innovative in an industry where the end-consumer expectations of quality, time and offerings is ever-changing and deeply dynamic. Our passion is to focus on solutions that increase the durability of the supply chain processes our clients experience, while standing with integrity throughout the entire process.

Market Size: A Growing Giant

The Cold Chain Logistics market has been on a steady rise, propelled by the increasing demand for perishable goods worldwide. According to recent studies, the global Cold Chain market size was estimated to be over $200 billion in 2021 and is projected to continue its upward trajectory.

By 2030 the market is expected to be valued at $782.27 billion. Factors such as globalization, urbanization, and changing dietary preferences contribute to this expansion.

The Crucial Role of CO2 Cold Chain Storage

Within the realm of Cold Chain Logistics, Carbon Dioxide (CO2) as a refrigerant has re-emerged as a key player, revolutionizing the way perishable goods are stored and transported. Unlike traditional refrigerants such as Freon, CO2 offers several environmental and operational advantages. Its non-toxic and non-flammable nature makes it safer for both workers and the environment.

The importance of CO2 Cold Chain Storage extends beyond its environmental benefits. Its high cooling capacity and efficiency ensure precise temperature control, critical for preserving the quality and safety of perishable goods.

Moreover, CO2-based refrigeration systems are increasingly recognized for their reliability and cost-effectiveness. As businesses strive to optimize their operations and reduce operational costs, CO2 Cold Chain solutions offer a compelling proposition – combining performance with sustainability.

Using CO2 as a refrigerant is like recycling or delaying emissions. This is because CO2 is an industrial by-product emitted from factories. By using CO2 resources captured from this process, CO2 gas mimics environmental recycling processes.

Leading Regions in the Industry

While the demand for Cold Chain Logistics is ubiquitous, certain regions have emerged as leaders in driving innovation and adoption within the industry:

• North America: With a well-established infrastructure and stringent regulatory standards, North America boasts a mature Cold Chain Logistics market. The region’s advanced technology adoption and emphasis on food safety have propelled the growth of Cold Chain solutions, including CO2-based refrigeration systems.
• Europe: Europe stands at the forefront of sustainability initiatives, driving the adoption of eco-friendly Cold Chain practices. Countries like Germany and the Netherlands are renowned for their advanced logistics infrastructure and commitment to reducing carbon emissions. CO2 refrigeration technologies are gaining traction across Europe, supported by government incentives and regulations promoting environmental sustainability.
• Asia-Pacific: Rapid urbanization and changing consumer lifestyles in Asia-Pacific have fueled the demand for Cold Chain Logistics, particularly in emerging markets like China and India. As these economies continue to grow, the need for efficient and sustainable Cold Chain solutions becomes more pronounced. CO2 refrigeration systems offer a promising solution to meet this demand while addressing environmental concerns.

A Promise From Us

Not all logistics problems have the same solutions, which is why we work alongside clients to build a unique customized solution. With Brimich, all your CO2 Cold Chain needs will be met with a reliable representative who can combine local presence and global reach. We strive to bring simplicity and predictability, while also reducing risk and administrative workloads on your business.

We create solutions that are governed by a strong commitment to helping your supply chain performance and efforts towards carbon neutrality!

The logistics and warehousing industry play a pivotal role in global commerce. At Brimich Logistics Inc., we are committed to ethically and safely facilitating the movement and storage of goods that are essential for countless businesses and consumers worldwide.

Amidst the fast pace of supply chain operations, it can be easy to attempt to move faster and potentially overlook the inherent risks associated in the working environment. From heavy machinery and equipment to potentially hazardous material – the logistics and warehousing sector presents unique challenges. At Brimich, meticulous attention to detail and continuously reinforcing safety protocols is a daily standard and expectation.

Brimich Health and Safety Commitment

Days without lost time achievements at two facilities: 2542 days and 2206 days (as of April 17, 2024)

In the warehousing industry, achieving consecutive days without lost time is a statement made with pride. A standard of excellence helps to underscore the foundational importance of prioritizing health and safety internally.

We continuously emphasize a robust commitment to health and safety on a high level, down to the smallest everyday tasks. We help to ensure this standard by implementing:

• Daily pre-shift safety meetings
• Strict retraining protocols
• Focusing on standardized training programs
• Continuous training and re-training commitments during employment
• Dedication to housekeeping and cleanliness – A standard practice and demeanor is expected on site across all job levels
• A constant awareness of cleanliness and proactively ensuring no items are on the ground or in undesignated areas
• Pallets and contents are always tidy
• Quarantine zones provided for items and palettes that are not up to our internal standards

2542 and 2206 days without lost time speaks volumes about the meticulous attention to detail from our committed staff and the standards of training and excellence ingrained within our company’s ethos.

Each day without lost time incidents reflects the embedded culture of safety from the ground up, that is adhered to daily. This achievement highlights the dedication to safeguarding the well-being of our internal workforce and helps set a benchmark for our industry peers.

As emphasized, a robust commitment to health and safety begins with standards, practices, and our daily demeanor.

A message from Michelle Amore – Director of Health and Safety

“Safety is our most basic everyday task. Our goal is to send our team members home the same as they arrived at work. If we look out for each other and keep safety as the number one goal in every task, we can be successful in creating a safety-first mindset in everything we do.”

“Safety is our most basic everyday task”

The Importance of Health and Safety Commitments in Logistics and Warehousing

Ensuring the well-being of workers in this industry protects liabilities, lives and is a morally obligated standard. At Brimich, we see this as a strategic imperative and believe all industry forerunners should commit to ensuring the serious undertone of these practices. Here’s why:

1. Protecting Human Capital: Employees are the backbone of any organization. By implementing robust measures, businesses can safeguard their most valuable asset – its workforce.
2. Mitigating Risks: Logistics and Warehousing is inherently dynamic, with numerous moving parts and potential hazards. Implementing comprehensive safety protocols helps reduce the likelihood of accidents and injuries.
3. Enhancing Efficiency: A safe work environment is also about optimizing operational efficiencies. By streamlining processes, minimizing downtime due to accidents and injuries, and ensuring proper functioning of equipment, businesses can enhance productivity and maximize output.
4. Compliance and Reputation: Failure to adhere to high standards can result in legal repercussions, financial penalties, and reputation damage. Demonstrating a commitment to health and safety ensures regulatory compliance while also enhancing brand reputation and credibility.
5. Adaptability and Resilience: This is an essential business stance for long-term sustainability. Prioritizing health and safety fosters a culture of continuous improvement and innovation. This translates to enabling businesses to adapt to changing circumstances quickly, mitigates risks effectively and allows teams and brands to thrive in the face of adversity.

As we observe World Day for Safety and Health at Work, let’s collectively reaffirm our commitment to creating safer, healthier workplaces within the logistics and warehousing sector. On April 28^th we celebrate World Day for Safety and Health at Work in conjunction with National Day of Mourning. On this day, we will remember and honor those who have suffered from work-related tragedies within Canada.

On this #DayofMourning, we can collectively renew our commitment to improving health and safety in the workplace and acknowledge the pride and recognition toward Brimich operational staff, for helping us operate for over 2500 days without lost time.

Each day, we work to protect our most valuable asset – our people – while helping to drive operational excellence, regulatory compliance and sustainable business growth. Our health and safety commitments are displayed this week, and every single day. Together, we can make a difference. Together, we are building a safer, healthier future for all!

All facets of your logistics processes are important. When the inevitable problems come up, whether inbound or outbound, they can affect production, customer service, and ultimately profits.

Are you in or are you out? In terms of logistics processes, “in” would imply resources and materials coming in to your business to facilitate production. “Out” would be finished goods on their way to their final destination. The continuous movement of these flows are the processes that make up inbound and outbound logistics.

Virtually every business that handles physical goods relies on inbound and outbound logistics processes in order to operate from day to day.

Moreover, when these processes are optimized, other processes benefit in turn. On the inbound side, things like restocking and developing new products become easier to coordinate. And on the outbound side, fulfillment to customers runs smother with more shipments arriving on time.

Familiarizing yourself with the intricacies and dependencies of all inbound and outbound logistics processes gives you a clarity on how to better manage your resource flows and remove potential bottlenecks.

What is the Difference Between Inbound and Outbound Logistics?

Inbound logistics focuses on the movement of materials into a company, while outbound logistics involves the movement of finished products out of a company.

Perhaps one of the best ways to illustrate the difference between inbound and outbound logistics is to use an example we’re all too familiar with:

Have you ever had a notification of a delayed shipment?

If you need the shipment for processing your own goods, that’s inbound logistics. If the shipment is supposed to be on its way to fulfil a customer’s order, that’s outbound logistics.

One other point to consider is that the very nature of inbound vs outbound implies some form of median between the two. For all intents and purposes we can consider this point the receiving warehouse or centralized distribution centre.

Inbound vs Outbound Logistics Core Differences

What Is Inbound Logistics?

Inbound logistics involves how raw materials and goods flow into a company. This includes such steps as ordering, receiving, storage, transportation and management of incoming supplies. In other words, the inbound logistics process focuses on the supply portion of the supply and demand equation.

Specific Inbound Logistics Activities:

• Sourcing and Procurement
• Ordering and Purchasing
• Transportation
• Receiving
• Materials Handling
• Storage and Warehousing
• Inventory Management
• Expediting
• Distribution
• Tracking
• Reverse logistics

Depending on how a company handles incoming goods, industry type and buyer-seller relationship, the company may manage its own inbound logistics or outsource it.

How to Optimize Inbound Logistics

In a larger sense, optimization of any company process creates an opportunity for growth through redistribution of resources. With inbound logistics, this means faster, leaner, more agile and cost-efficient operations. It also means assessing every process, identifying strengths and weaknesses, and then making the necessary improvements.

1. Measure current performance.
   Examine potential inefficiencies concerning expenses, waste, quality degradation, redundant tasks, information gaps, and delays when optimizing inbound logistics. Consider hidden or intangible expenses like inventory carrying costs and the repercussions of subpar customer service, which can add complexity. Additionally, assess your operations against industry standards and competitors for comparison.
2. Analyze choices.
   Monitor the impact of your choices on both cost and efficiency within the scope of optimizing inbound logistics. Key cost influencers in inbound logistics include procurement, supplier oversight, transportation, reception, storage, material handling, and inventory control.
3. Develop strategies to counter inefficiencies.
   Recognize the need to balance trade-offs among various activities. Employing automation and analytics empowers a more data-centric approach to decision-making.
4. Build strong supplier relationships.
   Robust supplier partnerships can result in advantages like improved terms, shorter lead times, cost efficiencies, and enhanced stability amid market changes. Placing importance on communication enhances your suppliers’ comprehension of your operations. Establishing a supplier compliance strategy outlines your specifications and repercussions for errors, such as late deliveries or deviations from route guidelines. This approach can lower shipping and warehousing expenses, amplify efficiency and precision, and elevate customer satisfaction.
5. Use a Warehouse Management System (WMS)
   Warehouse Management System (WMS) software enhances warehouse efficiency by optimizing tasks such as receiving, storage placement, inventory control, and order picking.
6. Use a transportation Management System (TMS)
   A Transportation Management System (TMS) software automates, oversees, and enhances freight operations. It evaluates shipping quotes and service levels from various carriers, arranges shipments, and monitors their progress until delivery. These insights enable businesses to cut expenses, enhance efficiency, and achieve comprehensive transparency within their supply chain.
7. Combine deliveries:
   Shipments categorized as Less-than-Truckload (LTL) typically entail elevated shipping expenses and extended receiving durations. Challenges in consolidating these shipments may arise due to varying handling requirements, such as refrigeration for specific goods. In scenarios where achieving full truckloads is problematic, enlisting a third-party logistics provider (3PL) allows for merging partial loads from multiple customers.

What Is Outbound Logistics?

With outbound logistics, the emphasis shifts to the demand side of the supply-demand dynamic. This entails the storage and transportation of goods to the final customer or end user, encompassing stages such as order fulfillment, packaging, shipping, delivery, and associated customer service.

Specific Outbound Logistics Activities

• Warehouse and Storage Management
• Distribution Channels
• Inventory Management
• Transportation
• Delivery Optimization
• Last-mile Delivery

How to Optimize Outbound Logistics

Optimizing outbound logistics requires efforts designed to improve relationships and negotiations. Technologies can be used to figure out optimal delivery networks, plan routes, organize schedules and, ideally, reduce costs.

1. Understand faster delivery systems.
   n order to comply with swift shipping criteria set by carriers, it might be necessary to establish product staging within distribution centres. This could involve organizing shipments according to distribution centre directives and customizing packaging to align with their specifications. Certain sectors, such as wholesale food supply, might utilize a lumper service at distribution centres, engaging third-party personnel for trailer loading or unloading. The objective is to expedite operations, enabling quicker turnaround and driver rest periods. It’s crucial to ascertain whether lumping services will be employed by the distribution centre, as these additional costs need to be factored in.
2. Adopt current inventory strategies.
   The prevalence of Just-in-Time (JIT) inventory and other swift replenishment techniques has shifted away from the traditional practice of delivering substantial orders to customers with considerable time gaps. Given that JIT customers generally lack ample storage space for excess products, adjusting your outbound logistics to align with these inventory trends becomes essential. This adaptation might involve accommodating a higher volume of Less-than-Truckload (LTL) orders.
3. Build and improve partner relationships.
   Build strong partnerships with essential outbound logistics stakeholders – both customers and freight providers. If your industry involves sales to significant retailers with intricate supply chains, these partnerships could yield valuable insights. Establishing a rapport could prompt data sharing on your product’s performance, facilitating refinements in production, order fulfillment, and shipping. Close engagement with freight carriers can provide insight into strategies such as concentrating business with a select few shippers, potentially improving control over pricing and service level agreements.
4. Use smart route planning.
   Implementing automated route planning can minimize delivery waiting and travel times. These time savings have the potential to lower fuel expenses and enhance customer satisfaction.
5. Consider partnering with a 3PL provider.
   For many businesses, the details and expenses tied to outbound logistics render outsourcing to a third-party logistics provider (3PL) a strategic decision. The substantial scale of 3PLs affords them volume-based discounts and negotiation advantages, translating to potential cost efficiencies on your end. Leveraging the expertise and specialization of 3PLs also allows for agile scalability, aligning your operations with shifting business demands.

Inbound and Outbound Logistics Processes

The individual processes of inbound and outbound logistics can be broken down into multiple specific steps. In aggregate, they’re designed to enable the smooth movement of goods and products into and out of a business.

Benefits of Efficient Inbound and Outbound Logistics

Taking the time to identify and analyze key KPIs within your logistics systems is time well spent. As bottleneck and inefficiencies are identified, they can then be corrected to help improve operations, save resources and create a better overall flow of goods.

Benefits of Inbound Logistics

Along with lower costs for raw materials and more reliable supply sources, businesses can take advantage of the many benefits of efficient inbound logistics. The following are a few of the major benefits of efficient inbound logistics:

• Lower shipping and receiving costs
• Predictable raw material costs
• Improved product quality
• On-time deliveries
• Steady production rates
• More economical inventory management
• Ability to spot supply chain problems
• Stronger vendor relationships

Benefits of Outbound Logistics

With outbound logistics, the last link in the chain is the customer who must be kept happy. An efficient outbound logistics process not only helps retain customers, but also confirms that nothing is missing, broken or defective. Some of the benefits of more agile outbound logistics include:

• Faster and more on-time deliveries
• Less transit damage and loss
• Fewer order cancellations and returns
• Reduced delivery failures or mistakes
• Lower costs of operations
• Higher customer satisfaction rates
• Stronger brand recognition
• Better company reputation

Inbound and Outbound Logistics FAQs

Here are a few inbound and outbound logistics related frequently asked questions readers ask:

What is outbound logistics in simple terms?

Outbound logistics refers to the transportation, the storage and the delivery of goods to customers or other businesses. It relates to the sales of goods (out of the company) i.e. the outflow of goods from the production line to the end user.

Source: https://www.saloodo.com/logistics-dictionary/outbound-logistics/

What is the difference between inbound and outbound transportation costs?

Inbound logistics involves the efficient and cost-effective flow of materials and goods into a business, while outbound logistics involves the efficient and cost-effective flow of goods and services out of it.

Source: https://www.sellerapp.com/blog/inbound-outbound-logistics/

Is supply chain inbound logistics?

Inbound logistics is a supply chain operation tasked with ensuring that a company is supplied with the products or services it needs to do business. Directly related to supply-chain procurement, inbound logistics includes the processes of product acquisition, goods receipt, storage, and stock management.

Source: https://www.interlakemecalux.com/blog/inbound-logistics

What are some issues that may arise in outbound logistics?

Challenges of Outbound Logistics

• Managing the increasing complexity of customer orders.
• Determining the most efficient shipping routes.
• Meeting delivery deadlines.
• Complying with shipping regulations.
• Coordinating with operations, suppliers, and carriers.
• Handling returns and reverse logistics.

Source: https://www.skuvault.com/blog/outbound-and-inbound-logistics-what-they-are-and-how-to-optimize/

What is an example of inbound supply chain?

Let us suppose that you are a car manufacturer. Now, all the raw materials that are incoming to the plant for further processing are inbound activities. In this phase, transport for steel, rubber, plastics, glass and other things to the factory is still required.

Source: https://www.eurosender.com/blog/en/inbound-outbound-logistics/

How to calculate inbound logistics?

There are many metrics to measure the performance of inbound logistics, including error, defect and on-time delivery rates for shipments Some calculations to consider are:

• Freight cost for a pound of raw material
• Freight cost as a share of total production costs
• Time and expense to receive incoming shipments
• Number of times staff handle goods

Source: https://www.netsuite.com/portal/resource/articles/inventory-management/inbound-outbound-logistics.shtml

Do You Need an Experienced Logistics Partner?

If your company is involved in production and moves goods and materials, you have logistics needs. To create a more efficient logistics network, count on Brimich Logistics and Packaging to help streamline your outbound logistics operations today.

Unless your business relies heavily on holding large levels of stock at all times, the idea of holding inventory that collects dust just doesn’t make sense. With “want it yesterday” levels of demand and JIT solutions, this is a thing of the past. Still, just in time occasionally requires just in case safety stock to accommodate the ebb and flow of todays supply chains.

Why the Need for JIT Safety Stock?

Recent upsets in global supply chain operations, a pandemic, trucking shortages, inventory shortages, delayed deliveries, international conflicts etc have made a mess of inventory management. These seismic shifts have undermined the ability to count on predictable replenishments of materials required to keep many operations running smoothly.

Under extreme conditions, such as what we saw during the beginning of the pandemic, we see how consumer demand has the ability to eat up existing inventory virtually over night.

The pandemic created extreme stockout Issues

Under “normal” conditions, safety stock would be used as a reliable buffer against calculable, predictable ebbs and flows in the logistics landscape.

Now faced with unprecedented cost increases, a “Great Resignation”, and companies being forced to do more with less, the bullwhip fallout of the pandemic has created voids within supply chains around the world.

In order to fill the gaps, lean manufacturing and Just in Time (JIT) inventory strategies need to be reassessed to adapt to what is essentially the new normal: a highly disrupted and unpredictable flow of goods on a global scale.

Hence the need for a hybridized JIT safety stock.

JIT Inventory Management and the Kanban Process

The JIT method of inventory management relies on the premise that stock can be rotated according to a predictable availability of materials. Unfortunately, this method doesn’t account for the unpredictability of consumer demand. Nor does it account for the ripple effect that occurs when one stage of the value stream suffers from a materials shortage causing previous stages to grind to a halt.

Kanban Principles

In a similar fashion, the Kanban manufacturing process developed by industrial engineer Taiichi Ohno at Toyota, relies heavily on the steady control of work-in-process directly attached to customer demand. As finished goods approach the point of replenishment, the value chain engages to produce inventory to fill the void.

Each stage of assembly maintains a level of work-in-process inventory waiting to move on to the next link in the production cycle.

The beauty of Kanban is in utilizing minimal JIT inventory counts. The problem is, if there is a disruption in material supply, each operation in turn is affected on down the line.

What is the Key Risk of JIT?

The inherent risk of the JIT method is the potential for the domino effect. Cascading problems happen when the JIT inventory chain breaks down:

1. Delayed Delivery: Shortages or circumstances cause the vendor to be unable to maintain a delivery schedule
2. Stock-Out: Results in lost sales, lost gross profit and damaged customer confidence
3. Inventory Carrying Costs: Lost sales create backups which increase carrying costs from holding inventory

Just as on an assembly line, if a problem occurs at one point along the process, it affects further points downstream. In the context of the supply chain, there are a number of other factors that can easily become points of failure including:

• The pick-pack-ship process
• Transportation
• Port transit
• Customs clearance
• Dependencies on local suppliers

Ultimately, the real crux of the problem though is rooted in the hyper-sensitivity to time itself. In other words, if time was not part of the equation, there wouldn’t be a problem.

Is the JIT Method Still Valid?

Because the alternative to not using a JIT method of production automatically implies holding excess inventory, yes, JIT is indeed, still absolutely valid. But the process itself needs to adapt to remain agile enough to weather the highs and lows of an unpredictable supply chain.

One innovative solution to managing inventory in a hyper-paced market is offered by re-thinking how existing warehousing and transportation fit into the supply chain.

Using bank-based financing at exceptionally low interest rates, inventory is moved off supplier and customer balance sheets through a cost-effective globalized network.

With the ability to fulfill just in time deliveries, the result acts very much in the same way as holding safety stock.

problem: less flexibility through limited supplier dependencies.

JIT Safety Stock and the Global Market

Not every company operates in a linear market where demand is consistent enough to warrant a predictable level of safety stock. Yes, the food industry for one would be an exception. But if you’re attempting to count on a consistent, dependable and timely supply of buffer inventory between North America and China, you may have issues.

Moreover, in order for JIT to be effective, your suppliers should ideally be in your back yard. They should also consider your business a top priority.

In terms of the state of the global supply chain and lean manufacturing methods using JIT, there are no massive upheavals – for the moment.

In a recent article posted by SupplyChainDive referencing a Gartner research report, the response to a poll on increasing safety stock showed a total of 54% percent of respondents were either currently investing in inventory, or were planning to within the next two years.

In other words, JIT manufacturing methods are still very much and accepted by global industries.

Managing JIT Safety Stock

There are a number of key factors that you can use to calculate the amount of safety stock to keep on hand. Main factors include:

• Inventory velocity
• Current demand
• Future Demand
• Sales volume
• Supplier lead times

Generally speaking, an ideal level of safety stock should be inventory quantity consumed per day multiplied by lead time required in days.

But how do you manage safety stock levels when key predictive factors are highly unpredictable? Namely, lead time and customer demand during that lead time.

Safety Stock diagram

Mitigate Points of Delay

Set expectations through visibility. Transparency in every aspect of the supply chain goes a long way. For instance, partnering with dependable logistics providers who use WMS softwares and cloud-based inventory tracking lets both vendors and suppliers keep an eye on material flows.

Knowing where your products are at any given point in time alleviates stress and, in the case of a business owner, empowers them to make informed decisions on how to manage stock levels should they begin to run low.

Adopt a VMI (vendor managed inventory) strategy. If your suppliers are willing to take responsibility for ensuring inventory availability, and can be counted on to deliver, you increase your ability to have stock on hand when you need it.

Partner with suppliers who have a history of dependability. Company cultures stem from the people that control how the company operates. When a supplier has a consistent reputation for delivering the goods on time and in good order, it’s generally a good bet.

Final Thoughts

Who wants to carry excess inventory? Nobody.

Just in Time methodologies in supply chain management offer minimized inventory levels, equalized balances between receivables and payables, and reduced capital costs. What’s not to like?

Does safety stock guarantee continuity and stability? Not necessarily, but if your business does use a JIT strategy, it is possible to find the sweet spot that balances carrying charges against the potential for lost sales. Either way you’re better off with safety stock than without it.

If you’ve designed your packaging to only look good to your customers, you may be in for a nasty surprise. What do you need to know to make absolutely sure your products can withstand the rigours of the journey through the supply chain?

The Importance of Packaging in the Supply Chain

There’s little doubt that retail markets, manufacturing methods, logistical flows and the environment in general are evolving. With this fluid landscape in mind, it’s important to anticipate how your product packaging fits with what’s just over the horizon.

Remember McDonald’s burgers served up in styrofoam containers? Nope, gone.

With respect to the gist of this article, that’s perhaps a little too far down the consumer FMCG supply chain. But the point is, if you don’t keep up with customer trends and expectations (as McDonalds was wise enough to do), you will become history sooner than expected.

Why is Proper Packaging so Important?

Imagine for a second, what condition do you think your smartphone would be in if it had left the factory without any packaging? Would it have wound up in your hand unscathed, in perfect working order without damage? Probably not.

Now imagine that same product perfectly packaged to presumably withstand any hardship on its journey to you, but has to experience severe heat, humidity or other conditions that were not anticipated.

The above examples may be extreme, but they illustrate how the success of each is dependant on the other. Both currents in the supply chain flow, the product deliverable and delivery system itself, have to be in harmony to keep the wheels of any economy turning smoothly.

Just as transportation systems must be efficient, packaging is just as important with respect to the total delivery process. Proper packaging serves as the protective barrier for goods from the time they leave the manufacturer, through transportation to distribution channels and finally landing in the hands of the customer.

Sustainable Packaging and Its Role in the Supply Chain

Making changes towards more sustainable packaging design, even minor ones, can make a world of difference, and a difference in the world. Small improvements in production, materials and operations decrease pressures on resources and reduce environmental impact.

Is there an end point where we say packaging is perfect? The answer lies in understanding that over time, change is inevitable. Therefore as a business owner, it’s imperative that you continually re-assess your packaging efforts, look for opportunities. Smart packaging means refining your processes to be more in line with consumer trends and current supply chain management conditions.

A few solutions that can increase packaging sustainability in the supply chain include:

• Minimal Packaging: Efficient and effective packaging is not only in line with lean manufacturing, it sheds a more favourable light on a company’s reputation as an environmentally conscious and authentic sustainability partner.
• Packaging Weight: By intelligently reducing the weight and mass of packing without sacrificing structural integrity, logistics-related costs can be reduced through decreased fuel consumption and maximized storage space.
• Single-Source Materials: While a see-through plastic window may help sell a pastry or pie, it does nothing in terms of sustainability when it’s hidden inside another opaque container. Wherever possible, alternatives for mixed-materials, especially in consumer packaged goods (CPG) should be considered.
• Dissolvability: Compostable, plant-based packaging continues to be a more favourable marketing alternative. From forks and spoons made of starch to protein-based edible flexible films, their value lies in their efficient ability to return to the earth.
• Re-ability: Reusable packaging in the supply chain along with multi-use containers is not only widely accepted, but continues to gain traction every day. Reusable, refillable, returnable items such as plastic containers are expected to enjoy a CAGR of 9.5% through to 2028.
• Waste Controls: Whether through efficient movements in physical handling and storage, or partnering with 3PL services that practice green logistics, controlling waste of any kind is an imperative throughout the supply chain.
• Legitimacy: Counterfeit products, especially in the e-commerce sector, dilute consumer confidence across the board. By offering a method of verification, such as QR codes on labels or tamper-proof packaging, provide customers with the security they feel is necessary to qualify a purchase.

Essential Packaging Requirements in the Global Supply Chain

If you package your products, you are by default a contributor to the betterment of the global supply chain. As part of a responsible supply chain management strategy, proper protective packaging helps ensure the shipping industry is not encumbered by excess losses and insurance claims due to substandard or inadequate packaging.

While every market segment has its own specific baselines for packaging requirements, all related systems must work together to ensure the delivery process runs smoothly from iteration to destination.

Regardless of the type of item, from a toothpick to a new refrigerator, there are fundamental packaging functions that must be considered:

• Protection: Product packaging must protect the goods from the rigours of shipping, handling and other external factors to make sure that products arrive in good condition.
• Storage: Since products can travel through multiple storage locations before they reach their final destination, packaging and associated materials must allow for convenient storage and meet storage requirements.
• Transportability: Better packaging design allows for more efficient handling, stowing and stacking capabilities. By maximizing available space, all aspects of the transportation process become more cost-effective.
• Tertiary Packaging: The extra layer of protective packaging that safeguards the secondary and primary packaging levels of the goods. Not only is there an organizational benefit through grouping products into a single container, using eco-friendly materials for this function is generally more favourable as we move towards global awareness and environmental responsibility.

Final Thoughts

There are many aspects to packaging that work with and within an evolving supply chain system. Major influences include the ability to draw from data-based feedback, making forward-thinking decisions based on solid information and managing the supply chain responsibly.

To successfully accomplish this year after year, we must be able to predict and control key resources such as product protection, specifications, delivery times, inventory levels, workforce stability and perhaps most importantly the safety of all who are part of the global supply chain network.

What is the difference between a 3pl and a 4pl provider?

The main difference between 3PL and 4PL is that 4PL handles nearly the entirety of a supply chain, while 3PL is primarily concerned with handling just the logistical process.

Third-party Logistics: 3PL

A third-party logistics company handles physical distribution and logistics. 3PL companies do this by using their own resources, such as a network of freight transportation providers and warehouse facilities to help clients ship or store their products to meet their needs.

3PL companies leverage their experience and partner contacts o ensure all steps are taken to keep the client’s products safe.

Still, a third-party logistics company can have many variations depending on their specialties. According to the Council of Supply Chain Management Professionals (CSCMP), the legal definition is: “A person who solely receives holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.”

In plain language this means that a 3PL company holds or transports a a client’s product (i.e., a product that they do not own).

What Does a 3PL Company Specialize In?

3PL companies tend to specialize in:

• Warehousing
• Distribution
• Order fulfillment
• Cross-docking
• Inbound and outbound freight
• Customs
• Freight consolidation
• Inventory management

The above third-party logistics services are scaled and customized to fit a client’s specific requirements.

One client may not require warehousing, whereas another will, yet another may require temperature controlled warehousing. This versatility and ability to accommodate makes 3PL companies adept at providing different services to different clients.

Fourth-party Logistics: 4PL

The full nature of 4PL is still heavily debated. There are other definitions out there, but here’s one that’s more popular:

In short, a 4PL company doesn’t stop at outsourcing logistics services, but also outsources the management of those same services

4PL companies will generally have no way of transportation or warehousing, but rather use the transportation and warehousing services of a 3PL company. There are of course exceptions to this.

What Does a 4PL Company Provide?

A fourth-party provider will tend to cover (generally through 3PL partners):

• Procurement
• Storage
• Distribution

If we reference the CSCMP again, a 4PL company differs from a 3PL company in the following ways:

1. 4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners;
2. 4PL organization acts as a single interface between the client and multiple logistics service providers;
3. All aspects (ideally) of the client’s supply chain are managed by the 4PL organization; and,
4. It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure.

The CSCMP definition is a “supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organization with those of complementary service providers to deliver a comprehensive supply chain solution”.

This means is that a 4PL company essentially deals with the planning, management, designing, and optimization of a supply chain from start to end, and does so by outsourcing required services to trusted partners.

3PL vs 4PL: Which Logistics Service Is Right for You?

Overall, third-party logistics and fourth-party logistics inherently operate the same way, but consist of different moving parts.

Because a 3PL company arranges freight carriers and warehousing by dealing directly with the service providers, the fewer parts in play may work perfect for your small business.

A 4PL company, on the other hand, may be a good fit if your business is more expansive. A 4PL provider will arrange the same services and employ companies such as 3PL companies, who leverage their warehousing and vast network of carriers.

In the end, the goal of both 4PL and 3PL companies is to provide a client with a comprehensive, end-to-end supply chain.

With the change in demand for many types of small businesses, and are you managing your supply chain needs properly?

With national economies reacting to a state of ever changing conditions, transportation companies are along for the ride, and just like everyone else, trying to adjust in real time.

With so many of us on lockdown, the change in the logistics landscape is generating some interesting statistics:

• Commercial transportation in the U.S. and Canada is operating at 89% capacity for heavy truck
• Transportation to grocery stores is at 90%
• Passenger flights are down a whopping 96%
• Grocery sales are up 38%

Diversification Is A Necessity

The foresight to see potential opportunities before they happen, develop strategies to reduce risk, and provide the ability to flex up or down will be key to success in the market.

Because they can quickly pivot to transport a variety of items, independent owner operators may realize the most benefits. If existing contracts are not at risk, a plan to assist another industry when volumes are down can be an effective option.

Old Systems Are Being Challenged

Those companies who have been resistant to technology are having a tough time under the current conditions, but that pain should provide incentive to review technology’s new tools.

Transportation, like many industries, is dealing with a long-standing and experienced workforce with many still using manual systems. Most of the day spent calling and emailing transportation providers, and juggling spreadsheets.

Regardless of how much experience your workforce has, it was probably not prepared for a disruption of this magnitude. Making the right decisions becomes an increasing effort as they’ve never experienced this kind of event before.

Businesses faced with unexpected demand have a difficult time trying to find capacity. In these situations, a customer would benefit from real-time API solution to get rates, truck confirmations, and then have a platform provider to source and assign the transportation vendor.

The Next Disruption Will Happen

When the next wave comes, companies that have invested in technology will be in a better position.

With the right technology, analytics, and metrics, companies could spotted trends as early as January. The analytics would have identified some of their clients increasing full truck loads to their stores.

In this scenario, analyzing the data wisely meant they had time to react before the disruption hit the market. Companies without a technology base had no idea and were unprepared.

Your plan of attack depends on your business, and the size and scope of your industry. It can be an opportunity to step back and measure the effects on your business and ask tough questions.

Funding technology projects is always a challenge, and transportation traditionally does not have the necessary capital to invest in expensive technology. In this case, there may be an opportunity to create more inexpensive offerings with mobile capabilities.

Adapting With Agility

This disruption will cause some companies to fail, others to flourish by adapting to serve what the market needs. The best defence is reviewing and reflecting on the data now to make fact-based decisions. As they say; “Go Science!”

COVID-19 will undoubtedly accelerate the demise of any who were already struggling. Any company that was marginal before the pandemic will surely not survive. And therein lies the opportunity for others more nimble to fill the gap.

Without appropriate processes and technology, responding to the next disruption will be nearly impossible. Companies that survive will have taken the opportunity to observe, learn from mistakes, re-evaluate strategies, and will ultimately be ready for the next round.