Optimizing inbound logistics means making the operation faster, leaner, more cost-efficient and more agile. Assess every process, identify strengths and weaknesses, and then make improvements.

1. Model your current process and measure performance.
   Look for inefficiencies related to cost, waste, quality loss, duplicate work, information gaps and delays. The presence of invisible or intangible costs in inbound logistics, such as inventory carrying costs and the impact of poor customer service, can complicate matters. Compare your operation to industry benchmarks and competitors.

2. Analyze your choices.
   Understand how your decisions affect cost and efficiency. For example, if the procurement department makes purchases in large quantities to receive volume discounts, are those savings offset by the expense of holding and managing excess inventory? The major cost drivers for inbound logistics are purchasing, supplier management, transportation, receiving, warehousing, material handling and inventory management.

3. Develop strategies to address inefficiencies system-wide.
   Account for trade-offs among activities. Investing in automation and analytics will enable more data-driven decision-making.