Inventory in Transit 101: Everything You Need to Know

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How well are you tracking your shipments? If you have to pause before answering this question, chances are this is an area for improvement.

Inventory in transit can sometimes lead to accounting- and financing-related dilemmas if you don’t effectively track it.

This is why we’ve compiled a comprehensive guide on everything you need to know about inventory in transit and why tracking is a must.

Let’s jump in!

What Exactly Is Inventory in Transit?

Inventory in transit refers to goods that are going from certain companies to other companies — for example, wholesalers to retailers — but that haven’t reached their destinations yet.

These transactions can take a while to occur, particularly if manufacturers are shipping large numbers of items to wholesale suppliers or retailers.

A major question that might crop up when goods are being transferred is at which point the ownership of the goods is transferred from party A to party B.

There are two types of transfers of ownership:

One is called freight on board, or FOB, shipping point. In this situation, party B takes ownership of the items at the place from which they are shipped.

The other type of transfer is called FOB destination. Here, party B takes ownership once it receives the goods at the intended destination.

Accounting Implications

The kind of transfer that takes place has an impact on how your business records that particular transaction.

In the FOB shipping point situation, the transaction can be recorded as a business sale starting from the shipment day.

Meanwhile, in the FOB destination situation, you must wait until the recipient takes ownership of the goods sold at the appointed destination.

This is especially critical to get right if it means that a transaction started in a certain month or year may end up being completed in the following month or year.

Financing Implications

Inventory in transit can also have financing implications.

For instance, let’s say that a buyer tries to use purchased goods as collateral for gaining financing to complete extra business operations.

A lender may decide to issue a loan with the expectation that the appropriate amount of goods will reach the buyer at a certain time. However, the lender must first do its due diligence to make sure that this will actually happen. Otherwise, the buyer may end up defaulting on the loan.

How We Can Help

We offer top-of-the-line shipment tracking software that provides the total end-to-end shipment visibility your company needs. Our goal is to help you to easily track and analyze how your shipments are moving across the globe.

We use a combination of public, private and proprietary datasets to get the job done.

For example, we look at weather data to determine how the environment may impact your business’s supply chain. We also look at warehouse management system data to determine the behavior of your business supply chain’s nodes. And even the performance of carriers in your supply network.

Get in touch with us to find out more about how we can help you to stay on top of your inventory in transit.

4 Reasons Why Supply Chain Forecasting Is Important

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It would be great if we all had a special ability to predict the future.

But since superpowers are out of the question, we must make do with what we have.

In the case of supply chain management, there’s supply chain forecasting. Here’s a rundown of four key reasons why supply chain forecasting is necessary for your business today.

Let’s jump in!

1. Supply Chain Forecasting Helps to Decrease Inventory Stockouts

Supply chain forecasting is essential even if you’re working in a just-in-time manufacturing system. That’s because it’ll assist you in timing your purchases of items to align with when sales have to be fulfilled.

The faster you get your inventory out of your warehouse, the less you’ll end up paying for it to simply sit there until it’s sold.

Forecasting is also critical if you’re working with suppliers who have long lead times, such as China or India.

If you’re purchasing from these types of suppliers, sending a forecast of customer demand is paramount so that your suppliers can easily arrange their raw material supplies in anticipation of your actual customer orders.

2. Enhance Promotion and Pricing Management

Let’s say that your business has many promotions running at the same time.

If you integrate forecasts and promotions at the distributor level, this will help you to enhance goods’ flow. Ultimately, you’ll experience better results for your stock fill rates and availability.

Likewise, improving your forecasting ability in the area of price changes will have a positive impact on your gross margin and revenue dollars.

3. Schedule Production in a More Effective Manner

This can be challenging, but it’s paramount to keep your business moving in the right direction.

An essential step in this is paying attention to how demand is shifting today before attempting to make predictions.

An adaptive manufacturer listens and watches closely to how customers are consuming its products. If you adapt and respond to such changes, you’ll be less dependent on prediction.

4. Reduce Your Safety Stock Requirements

The following are a few scenarios you should be planning for through supply chain forecasting:

  • Seasonal changes in demand
  • Promotional activities
  • The launch of a new product
  • Production requests going to manufacturing operations

If you forecast effectively in these areas, then carrying high safety stocks to manage these events will be unnecessary.

How We Can Help

We are passionate about helping any shipper to optimize its in-transit inventory through analyzing and tracking shipments’ movement across the globe.

We constantly look at data that is publicly available to monitor how external factors will impact your supply chain.

We can additionally leverage data from your enterprise resource planning system to determine the behavior of the supply chain nodes inside your company.

Also, our low-cost pallet tracker will allow you to assess how both your and your customer’s supply chains are behaving.

Get in touch with us to find out more about how we can help you to strengthen your bottom line through efficient supply chain forecasting.

4 Logistics Technology Trends Shaping the Future of the Transport Sector

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When you’re a logistics professional, you can’t be complacent and think you know everything about the industry.

No, you have to keep yourself updated on trends in the field. After all, technology continues to transform the handling of logistics around the world.

Yes, it can be frustrating. But it can also be exciting, offering great promise for improved supply chain management.

Here’s a rundown on four logistics technology trends that could impact your operations in the future.

Let’s jump in!

1. Logistics Technology Trend Includes the Growth of Autonomous Transportation

This is a trend you won’t want to overlook. Here’s why.

Autonomous transportation decreases the need to have human workers in warehousing. A such, it offers great potential for significant cost reduction as well as asset optimization.

The development of autonomous trucks has especially picked up steam within the past two years.

It may take some time for the makers of these vehicles to overcome the social acceptance, legal and safety issues tied to them. But when that happens, you can rest assured that you’ll start to see these vehicles widely used.

2. Automation

This is another logistics technology trend that is gaining popularity due to the ability to lower costs by eliminating human jobs.

In addition to reducing their human workforces, companies that take advantage of automation and robotics can greatly improve their efficiencies in warehousing and delivery.

What’s great about automation is that many companies can introduce it into their operations without having to make significant structural operations.

3. Social Responsibility

During the past three years or so, efforts to reduce a company’s carbon footprint have gained a lot more attention in the specific area of supply chain management.

As a result, you’ll likely hear the term “corporate social responsibility” (CSR) thrown around in the industry.

Most organizations’ CSR efforts up to now have been responses to the pressure that public opinion and legislation have placed on them.

These days, though, many organizations are taking a different approach to CSR. Instead of viewing it as something they have to do, they are considering it as something they want to do to help themselves.

For instance, CSR can be a way for companies to boost revenue, make their brands more appealing, and retain customers and employees.

As a result, this trend has become trendy, so to speak.

So, you can expect to see more logistics and supply chain professionals integrate social responsibility into their strategies going forward. For instance, they can use cutting-edge logistics technology to monitor, implement and report their sustainability efforts more efficiently.

4. Blockchain

This logistics technology trend is worth a look due to the many benefits it affords.

Blockchain is essentially a digitized public ledger featuring cryptocurrency transactions.

In the logistics world, using blockchain may improve the security of your supply chain by reducing fraud.

Blockchain can also reduce bottleneck and errors, as you no longer have to rely on paper to document transactions.

How We Can Help

ODYN helps large manufacturers optimize their in-transit inventory, leading to decreased working capital spend and increased customer service level. We do this by tracking and analyzing the movement of shipments around the world using our low-cost pallet tracking devices and predictive logistics intelligence suite.

Contact us to find out more about how our logistics technology can help your organization to be more efficient and profitable in the years ahead.

4 Tips to Achieve Supply Chain Visibility

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Supply chain visibility, or SCV, is more than a buzzword.

It’s a concept that impacts companies in every industry. That’s why research shows that it is becoming an increasingly critical strategic priority among firms. It’s what every company with logistics processes always aims for.

Total SCV, however, is easier said than done.

Here are four tips to achieve SCV in 2018.

Let’s get started!

1. Answer This Important Question about Supply Chain Visibility

Before we talk about how to achieve SCV, it’s critical that you ask yourself what this term even means.

Simply put, the visibility of the supply chain refers to the traceability or trackability of the orders and shipments of your products from the source of production to the proper destination.

Included in this are logistics activities as well as the milestones and events that occur before and during transit.

The goal of SCV? To empower and enhance your supply chain simply by making it easier for stakeholders to access information related to it easily.

With the right tools, you can acquire precise, real-time information concerning delivers, stock and orders in your outgoing and incoming networks.

The more you fully understand SCV, the easier it will be for you to help your company’s suppliers to comprehend how everyone involved benefits from enhanced visibility.

2. Collaborate with Suppliers

So, you’ve explained the value of the visibility of your supply chain to your suppliers. Now, you should work with them so that you both better understand what information you both need to enhance the services you offer to one another.

These key insights and metrics will serve as the foundation of your SCV.

3. Analyze Your Partners’ Systems

Now, it’s paramount that you analyze the systems that each of your supply chain partners uses in-house.

The purpose of this analysis here is to identify any gaps that must be resolved to enhance the flow of information locally.

4. Tap into Industry Expertise

Finally, get in touch with a company that specializes in improving SCV.

Look for a company that will provide for you a comprehensive picture of your company’s shipments down to individual pallets. This will ultimately allow you to maintain the integrity of your shipments and thus a high company service level.

How We Can Help

We take pride in our ability to help our customers to monitor the environments and locations of their shipments around the world.

With our help, you can gather the exact data you need to determine the performance of various trade lanes.

This will help you to improve your supply chain’s performance and understand future demands. As a result, you can decrease your inventory whenever you expect demand to be low. And in turn, you can more quickly respond to potential problems and improve your on-time deliveries.

Get in touch with us to find out more about how our supply chain visibility solutions can help you to optimize your business planning and demand forecasting. With our assistance, you can operate more efficiently and thus generate more revenue this year and beyond.

Your Complete Guide to Incoterms

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Incoterms sets out rules for selling physical goods that need to be transported.

These rules first cropped up in 1923 but did not become known as Incoterms until the Internation Chamber of Commerce (ICC) published them in 1936. And they have since been revised over the years.

In 1953, 1967, 1976, 1980, 1990, and 2000 they were amended. There was an eighth version– Incoterms 2010 — published on January 1, 2011. A new set of revisions, known as Incoterms 2020, is currently in the works.

What do the Incoterms Rules Focus on?

There are two main aspects to Incoterms rules, which are as follows:

1. Who is responsible for arranging and funding the transport in question?

This essentially asks whether the seller or the buyer should make the arrangements. “Arrangements” includes any loading, unloading, importing and exporting and the insurance of the goods being transported.

2. When does the responsibility shift from the seller to the buyer?

This is very important, in case the goods are lost or damaged mid-transit (which is where tracking is crucial).

The 11 Incoterms Rules

There are 11 rules in the current Incoterms layout.

The first 7 Apply to Any Mode of Transport:

1. EXW Ex Works

The individual selling the goods must deliver them to the buyer. The goods in question are then at the buyer’s disposal. Arrangements here must be made between the two parties. The place at which the goods are delivered is to be arranged between the two parties. eg: At the premises of the seller or another location agreed by both.

2. FCA Free Carrier

The seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place.

3. CPT Carriage Paid To

The seller delivers the goods to the carrier or another person nominated by the seller at an agreed place and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.

4. CIP Carriage And Insurance Paid To

The seller delivers the goods to the carrier or another person nominated by the seller at an agreed place and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.

It is also up to the party doing the selling to arrange the appropriate insurance.

5. DAT Delivered At Terminal

The seller must deliver the items, take them from the method of haulage and leave them under the entrustment of the buyer. And this must be at a location disclosed by the buyer and agreed by both.

6. DAP Delivered At Place

The seller must deliver the items, take them from the method of haulage and leave them under the entrustment of the buyer. And this must be at a location disclosed by the buyer and agreed by both. The seller is responsible in the delivery and movement of the goods.

7. DDP Delivered Duty Paid

The seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination. The seller is responsible for the financial and potentially troublesome issues involved in delivering items to the agreed-upon location.

They are also responsible for ensuring the items are legally signed off for haulage and to cover any costs or any customs procedures that may apply to the transportation of the items.

The Final 4 Apply to Sea and Waterway Transportation:

8. FAS Free Alongside Ship

The seller is entrusted with delivering items at the ship requested by the purchaser at the shipment location. Loss or damage to the items is the responsibility of the buyer when the transaction is completed.

9. FOB Free On Board

The seller is entrusted with delivering items at the ship requested by the purchaser at the shipment location. Loss or damage to the items is the responsibility of the buyer when the transaction is completed. In this case, the transaction will see the goods put on board the vessel.

10. CFR Cost and Freight

The seller ensures the items are placed on board the ship; or procures the items that have been offloaded already. Loss or damage to the items is the responsibility of the buyer when the transaction is completed. In this case, the transaction will see the goods put on board the vessel. All freight costs are the responsibility of the buyer.

11. CIF Cost, Insurance and Freight

The seller ensures the items are placed on board the ship; or procures the items that have been offloaded already. Loss or damage to the items is the responsibility of the buyer when the transaction is completed.

In this case, the transaction will see the goods put on board the vessel. All freight costs are the responsibility of the buyer. The seller is also responsible for insurance.

Incoterms Rules Round Up

Incoterms rules were devised initially to promote the use of containerized goods, but today they are used for practically all cross-border transit.

A major example of why these rules were put into play in the first place was the Japanese tsunami of 2011 when many exporters suffered losses which could have been avoided. Their containers were destroyed whilst in the container terminal.

Also of note is that Incoterms rules do not cover all aspects of a commercial agreement and these are to be arranged independently.

If you are looking for help optimizing your in-transit inventory (or just making sure that your shipments are doing what they’re supposed to be doing), then get in touch for more information.

5 Things to Know about AI and Supply Chains

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Artificial intelligence is becoming more popular. According to cmo.com, 15% of businesses are currently using it and at least 31% say they would like to start using it within a year.

The reason artificial intelligence is becoming so popular is because of its ability to make tasks easier. This results in a reduction of manual labor and increased productivity.

All of this adds up to increased profits as well as more insight into what is working and what is not working for your supply chain. If you are ready to get on board with artificial intelligence, then here are five things you need to know about AI and supply chains management.

1. Plan Smarter

Artificial intelligence will look at your historical and present data. Its ability, to comprehend, perceive and form conclusions based on information received from several data sources, makes it an invaluable tool for planning how to run your supply chain.

2. AI and Supply Chain Disruptions

Disruptions in a supply chain can lead to a loss of profits for businesses. Artificial intelligence has the ability to predict where and when these disruptions will take place. It does this by analyzing data that is inputted into the system. It also draws conclusions about possible disruptions that may occur from news stories, weather forecasts, and social media.

3. Predict Product Demand

Knowing how much product you will or will not need at any given time is one of the keys to increasing profits. When you overstock you waste money. When you understock you lose money. Artificial intelligence will look at your data for new and old products. This helps it to determine how much or how little of a product is needed for distribution at any given time.

4. Take Corrective Action

Every supply chain will have its fair share of problems and AI applications can help. Artificial Intelligence will fix issues that are within its capability and provide detailed reports on how it went about correcting the problem. This reduces the need for manual intervention and results in increased visibility and productivity.

5. Communicate Findings

Artificial Intelligence will not only find the deficits in your supply chain management system. It will also send detailed reports of its analysis to all the right people, so you don’t have to waste time typing up emails or making phone calls.

Final Thoughts

The combination of AI and supply chains is a natural fit for increasing productivity and performance. However, before you dive into this bold new world of technology you should learn as much about it as you can.

There is no doubt that the ability of artificial intelligence to help you plan, analyze data, correct issues, and communicate problems to major stakeholders makes it an invaluable tool. However, it is important to learn how to monitor artificial intelligence, so you can get the most out of it. This means that you will need to spend time interacting with the people who are developing the technology.

If you would like to learn more about artificial intelligence and how it can foster productivity in your supply chain, please contact us. We are always willing and available to help you get the most out of AI for your supply chain.

What is EDI and How Does it Impact the Visibility of Your Business?

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In past years, auto and retail companies commonly used EDI.

Now, however, all companies are almost at a disadvantage if they don’t use EDI. Industries like manufacturing, construction, and healthcare have all incorporated some form of the system.

But just what is EDI?

Have you been hearing about EDI, but aren’t sure what it is or if it’s right for your business? Be sure to read on to learn more.

What Is EDI?

EDI stands for electronic data interchange. Put very simply; it’s the electronic exchange of data between computers and businesses.

EDI helps businesses move away from paper-based systems to a digital process that’s more efficient with less room for error. Often, the documents exchanged via EDI are things like purchase orders, invoices, inventories, or shipping status documents.

Isn’t That Just Email?

When people first hear the definition of EDI, it’s easy to get it confused with emails. After all, that’s also an electronic exchange of data, right?

The most significant difference with EDI, however, is that it completely removes people from the equation. When using email, there has to be an employee who originally sends a purchase order, another employee who receives the purchase order and sends an invoice, and yet one more who pays the invoice.

Businesses that use an EDI system, on the other hand, don’t have to worry about any of that. It’s a computer-to-computer process, so once the initial request is created, the computers handle the rest.

EDI documents automatically go right to the corresponding application on each computer, making processing easy. For companies who need to manage large orders on a daily basis, this is incredibly valuable.

How Does It Work?

Each EDI document has to be written in a specific, standardized format. This helps to make sure that no matter what programs each business is using, each computer can still interpret the information that is being sent.

Without using a standardized format, you’d get a lot of unintelligible code instead of an invoice you can actually read.

Unfortunately, there is more than one standard in use today, so each business should agree on the standardized format to use before beginning to use EDI. Two of the biggest formats are ANSI and EDIFACT.

The person initiating the EDI will write the business document according to the rules of the standardized format and then let the computers do the rest. Both formats will do the job for you, though ANSI is further concise.

Businesses can do this all in-house, or they can use an outside provider.

How Does It Help With Visibility?

Instead of having to wait for someone to confirm that they’ve received an order, or making calls to discover the status of an invoice, incorporating EDI means you can track the status of orders in your supply chain.

You can get status updates with minimal hassle (from carriers who have enabled/integrated EDI), enabling you to make better and faster decisions.

Find More Ways To Track Your Shipments

Now that you know the answer to the “What is EDI?” question, you can decide if it’s right for you. EDI isn’t always a good fit for every business. Luckily, you can get the same (if not better) level of visibility without EDI integration.

With ODYN monitors, you can get a clear picture of all of your shipments, from the big picture to an individual pallet. They’re easy to install and even easier to use. Find out how it works or contact us to talk to one of our team members.

Everything You Need to Know about ELDs and Trucking

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What if you were risking a costly fine every time you drove your truck on the job?

A recent government mandate requires all truckers to use Electronic Logging Devices (ELDs). However, most truckers don’t know the exact government requirements, which means they may be violating this mandate without even knowing it.

Don’t worry, though. We’re here to save you time and money with our comprehensive guide to ELDs and trucking!

What Is the Mandate?

Essentially, every trucker who must prepare hours of service records of duty status must now use an ELD. Such ELDs must meet government standards for design and performance and registered with the FMCSA (Federal Motor Carrier Safety Administration).

The mandate also requires drivers and carriers to maintain and keep relevant ELD records. And on a bright side, the mandate protects drivers from discrimination or harassment based on the recorded ELD data.

Are They Expensive?

Truckers with long memories may fear ELDs being really expensive, as fleets once had to pay over two thousand dollars for a single electronic logging system twenty years ago.

However, official estimates for modern ELDs are that they will be under $500 per vehicle on average. And while no one likes an added expense, these systems do not represent a significant additional cost per vehicle.

Carriers may be able to get significant savings by exploring trusted vendors for different pricing options.

Will It Be Distracting?

Some truckers are understandably worried about safety on the road. They worry that having to interact with these devices on the road could lead to delays or even accidents.

Fortunately, that is not the case. Truckers primarily interact with the ELDs when the vehicle is at rest, like when they indicate that they are off duty or sleeping. Otherwise, the system automatically keeps track of driving hours without any interaction from the driver.

As a bonus, most ELDs offer an audio function. This offers features such as countdowns of hours left and a reminder that truckers have enough time to reach a parking place before hours run out.

Will It Affect Inspections?

Skeptics often wonder if ELDs will slow down safety inspections. Alternately, they may worry if such systems could cost them their jobs by automatically reporting violations.

Fortunately, this is just a myth. The ELD is merely a technological replacement for a paper logbook, and it has no way of automatically reporting a violation.

One benefit of ELDs for trucking that drivers often enjoy is that it speeds up roadside inspections. This is because inspection officials can quickly review ELD data and then get the driver back out on the road.

Is It Worth It?

Earlier, we discussed how individual ELDs do not cost that much. Nonetheless, drivers and carriers alike often wonder: Are they actually worth it?

In a word, yes. Such systems promote driver safety and ultimately save lives, which is good in and of itself. And being able to monitor drivers and their behaviors can help carriers create more efficient procedures that boost their bottom line.

ELDs and Trucking: The Bottom Line

Now you know about the importance of ELDs and trucking. But do you know where to get the best prices on ELDs themselves?

At ODYN, we’re all about saving logistics professionals time and money. To see what we can help you save, contact us for a quote today!