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4 ways forward stocking locations can improve warehouse logistics for international trade

Interior of warehouse

It can be challenging for companies that do business internationally to get products around the world quickly, and to provide service when there’s an issue. If high-tech equipment breaks down for a customer in Germany, shipping a replacement part from the company’s main warehouse in China can be slow and costly. Time is always of the essence in healthcare, and a slow international replacement process for a medical device could put a life on the line. But global companies across many different sectors can use forward stocking locations, also known as field stocking locations or FSLs, to help optimize their processes for critical shipments.

Forward-stocking locations store inventory and spare parts in warehouse locations that are strategically located close to customers around the world. With an FSL, products can be efficiently distributed to customers in that country more quickly than if they were located in one centralized warehouse—usually, in the same or next business day. They can also cut down on transportation time and costs, which saves time and money. Third-party logistics companies can provide those more local FSLs, enabling businesses to be more efficient – without maintaining a staff of warehouse management experts. Here’s how incorporating FSLs can improve your company’s warehousing strategy and customer response time:

  1. Eliminate capital costs by using an existing FSL network

Many logistics providers operate multi-client warehouse facilities, which means you can avoid creating a warehousing and logistics network, saving your company money. UPS, for example, operates a forward stocking location network with more than 900 global locations to provide local space for inventory. Sharing warehouse space from a third-party provider means you won’t pay for unused space in the warehouse.

A strategically located FSL also cuts down on the need to get critical shipments to customers via express air service, instead enabling more cost-effective delivery options. “Developing and managing a global parts warehouse network for any one company is exorbitantly expensive.  It is much more cost effective to outsource this need,” says David O’Leary, vice president of service parts logistics operations at UPS. 

  1. Provide faster field service and returns

Customers rely on you for a high standard of after-sales service that guarantees minimal equipment downtime. When they need a repair or return, they need your prompt response. Your customer’s bottom line—and their own service to their clients—can depend on it. Having key inventory located close to your international customers means you can maximize their productivity even though you may be located far from their country.

In the B2B area, the maximum time a client can expect to wait to have failed equipment repaired is often formalized in a “service level agreement,” or SLA. With a network of FSLs and associated logistics available to you at a fraction of the cost of self- maintained service networks, you can offer prospective international customers SLAs that are competitive—even contract-winning—with far less equipment down time. “UPS has a vast global network of FSLs and integrated transportation options, allowing us to support client SLAs as stringent as two and four hours,” adds O’Leary. “We can help service become a true differentiator for our customers.”

  1. Carry less inventory with best-in-class warehouse management solutions

 A reliable, robust service supply chain—which includes a comprehensive IT platform with parts planning capabilities—leverages data to help lessen the need to overstock inventory “just in case” there’s a problem. The locations you choose and the quantities of parts at those locations dictates the amount of inventory you need across your entire network – and has a big impact on transportation costs.

Providers like UPS can combine the reach of global FSLs with integrated technology platforms to cost-efficiently meet your needs.  “When you have a logistics and distribution partner that is constantly seeking new efficiencies for you, inventory is minimized while customer service levels are still maintained, at the lowest total cost to serve,” says O’Leary.

Logistics and distribution providers typically include warehouse management solutions that show end-to-end supply chain costs, so you can compare current costs to key metrics and goals, and adjust tactics accordingly.

  1. Devote time to your core business goals—not warehouse management

Your company isn’t in the business of operating warehouses in international markets. You are in business to innovate, create products, and provide excellent customer service. When you outsource service logistics and inventory management via use of third-party logistics providers, you can devote more time and resources to your next generation products, maximizing your long-term success.

Providing stellar field service or international distribution demands teaming with an experienced logistics provider, O’Leary believes. “With such a broad spectrum of critical capabilities—call centers, tech support, rapid parts dispatch, field service technician management, reverse logistics and repair services—it’s easier for a midsize company to work with a partner,” he says.

Learn more about UPS Post Sales services, which include leveraging forward stocking locations to provide more cost-efficient, local parts inventory solutions.

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