Ensure optimal replenishment orders

with Freight Optimization

Holding an optimal level of inventory is key to maintain service levels and avoid stockouts while minimizing the costs associated. However, replenishment orders cannot always be emitted when needed. Some providers may establish certain constraints that the orders need to satisfy, like ordering a minimum quantity or fulfilling a unit of transportation with the products ordered, for example. Keeping up with all these requirements may become a burden in the replenishment and stock planning processes. To solve that, the Freight Optimization tool is included in ForgeFlow's Demand Driven solution.

Freight Agreements

Freight Agreements collect all the different constraints requested by a specific provider. The constraints that can be specified in a freight agreement are multiple, including:

- Minimum order price

- Minimum and maximum weight of the order

- Filling a unit of transportation

- Global Minimum Order Quantities (MOQ), among others

Procurement alerts


When a product from a supplier involved in a freight agreement is to be procured, the system alerts the user, indicating the involvement in a freight agreement and providing the option to start a new freight optimization process. This ensures that freight agreements and their constraints will always be considered. 


Freight Optimization process

To compute a freight optimization, users need to select the corresponding vendor and the products that are to be replenished in the order. If a constraint requires to order a specific product when one of the selected ones is ordered, the system will show a message alerting of the situation, and no further action will be allowed until that product is included in the order too.

Upon confirming the required products and starting the freight optimization process, users can compute the recommended order quantities to fulfill the constraints.

Generate Requests For Quotations

Initially, the freight optimization process may result in an overstock situation, especially when few products are selected. To minimize overstock, additional products with lower projected on-hand quantities should be added and the optimization recomputed.

Once satisfied with the optimization results, users can confirm the results and generate a Request for Quotation (RFQ) for all products involved.

Optimizing order quantities to meet the established constraints minimizes excess inventory and associated carrying costs. The systematized approach to freight agreements and optimization simplifies the procurement process, saving time and reducing errors. In addition, maintaining stock levels within the optimal range helps in efficient inventory management, avoiding both stockouts and overstock situations. Overall, this approach ensures that suppliers' requirements are fulfilled, leading to more efficient and cost-effective procurement processes.

Watch the tool in action

 
 

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