Guest Post: Zach Brown, Managing Director – Asia
Customer-centric supply chain models have inspired shippers to evaluate the best usage of their logistics resources. Shippers have seen an increased value in expanding logistics services at origin to better prepare products to reach customers in a timely manner. Through strategies such as export distribution centers and direct-to-store services, companies have seen a 15 percent reduction in supply chain operation costs1. Distribution and value-added services at origin have transformed global supply chains to better serve customers and address the growing number of sales channels for global market shippers.
Utilizing Local Expertise
While goods come from all over the world, each country has unique laws and providers with localized expertise and services. North American shippers may see the most benefit in supplementing their domestic supply chains with distribution services at origin. With about 23,125,000 shipping routes between Asia and North America2, shippers have numerous options when shipping their products internationally. In particular, China has become a global force in manufacturing over the years. As a result, 3PLs in China have also become leading experts in managing export activities such as consolidation and documentation compliance, and more. This expertise paired with a large labor force, huge volume capacity, and exceptional export management, makes China an ideal country for implementing distribution services at origin.
Global Freight Possibilities
Distribution centers (DCs) at origin encompass the local expertise and similar technology seen in North America DCs that allow for better supply chain strategy. Leveraging DCs at origin can aid in managing global inventory and increase speed to market. Aside from storing goods, value-added services can also be completed prior to shipment that better prepare products for their next step in the supply chain. For instance, consolidating orders at origin allow products to be shipped directly to a final destination, whether that is a brick-and-mortar store or a fulfillment center, while reducing the need for less-than-container-load transportation. Distribution services at origin can also allow shippers to access new sales channels and global markets more effectively through specialized fulfillment services. If shippers plan to expand in markets like China, having a distribution center in the local area can help deliver products to nearby locations. Global third-party logistics providers that have a presence in the area can manage the entire supply chain process from concept to cash and provide the technology and relationships to ensure optimal solutions.
The Benefits of Global Distribution Services
Aside from speed and cost, shippers utilizing distribution services at origin can broaden transparency to their entire supply chain with increased communication with their shipping partners. In many cases, inventory can be connected to the technology they use domestically to improve inventory management. These services also allow for shippers to make more timely decisions based on their most recent needs, as opposed to making decisions when orders have been made, manufacturing has completed, or when products have arrived at destination. Working with a dedicated third party logistics provider with a presence at both origin and destination can help streamline supply chains.
Zach Brown is the Managing Director – Asia at NFI. Residing in Hong Kong, Zach oversees partnerships and relationships in the Asian marketplace to optimize international supply chains for NFI’s customers.