The 7 ‘Rights’ or 7 ‘R’s’ outline the minimum requirements for the successful movement of goods along a company supply chain. If just one of the rights is wrong it will impact shipment as a whole. Therefore the 7 Rights are essential knowledge for all logistics managers and personnel and should always be considered when moving goods.
Everyone working in logistics will have experienced a 7 Rights failure with a shipment. Sometimes the failures can occur from factors outside our direct control. The key to a good Logistics Manager is to identify where a 7 Rights failure could occur and have a procedure in place to address it.
So what are the 7R’s or 7 Rights of Logistics?
Let’s look at the 7 Rights, one-by-one, and see how they can impact the movement of goods:
1. Right Product
Ensure the customer receives the Right Product. So why do so many companies get it wrong? I’m sure you’ve received an incorrect item from a company in the past.
Picking and packing errors can be a major factor for this failure – quite simply the wrong item is picked, packed and despatched. Such a simple mistake can result in customer returns, added cost in replacing the item, additional logistics costs, damage to the company reputation and loss of return business. An efficient picking system is essential to a warehouse from low-tech solutions such as paper picking notes to high-tech solutions such as bar code/QR code handheld scanners, warehouse staff need to be able to locate, identify and pick goods easily.
2. Right Quantity
Ensure the customer receives the right quantity, there are three main issues to address for this one: Ensuring correct quantity of ordered goods are picked and packed and also ensuring your stock levels are accurate and you have enough in stock to meet customer demand. Failure in any of these scenarios can have a negative effect on your business.
Delivering the incorrect quantity due to a picking and packing error or incorrect inventory can have just much of an impact as delivering the incorrect goods. Again this can result in customer returns, added cost in replacing the missing items (or loss of stock from over shipping), additional logistics costs, damage to the company reputation and loss of return business.
Being unable to fulfil a customer order due to insufficient stock can also result in cancelled orders and loss of repeat business – not all companies will accept part deliveries with outstanding goods on backorder. An efficient picking system to ensure the correct quantity is picked but also an efficient inventory management and forecasting system for customer demand is essential for your business.
3. Right Condition
Receiving goods in the right condition. Storage, packaging, transport and handling all need to be addressed by the shipper to ensure the customer receives their order in perfect condition. I see so many social media posts of a smashed product received by a customer and they point the blame to the carrier. Most of the time the carrier is not the one to blame but the shipper’s inadequate packaging or handling is. If you wrap a glass vase in bubble wrap and send it a paddy envelope should you blame the carrier if it arrives smashed? No – the shipper should have packaged the goods appropriately with the correct handling labels. Consider all the variables such as distance travelled, mode of transport used and the weather. Do the goods require specialist storage, handling and transport such as chilled or frozen goods? Are you sending goods palletised which require treatment and ISPM stamps? The whole supply chain should be accessed to ensure there are no opportunities for spoiling or damage to occur.
4. Right Place
Deliver the shipment to the correct location. Many companies have multiple sites or separate warehouses so this is one which can be easily overlooked as it seems so obvious. The place of delivery should always be clarified before the goods are shipped. Terms such as Incoterms can help clarify this for both the seller and the buyer of the goods. Despatching the goods using a trackable service will enable the customer to monitor the shipment at any given point. Proactively monitoring this tracking information will give the seller the opportunity to resolve any issues if and when they arise.
5. Right Time
Deliver the shipment within the required timeframe. This is always my first question when I am asked about shipping goods. There is no point shipping goods at-all if they cannot arrive within the required timeframe. Always determine when the customer needs the goods and assess if it is achievable with the logistics options to hand. Small goods can often be despatched via Worldwide Express services for next day delivery – but this not guaranteed. Consider different time zones and potential bottlenecks and/or industrial action before confirming you can meet the deadline.
6. Right Price
Deliver the shipment for the right price. Of course price can be subjective – if a shipment is so extremely urgent its costing thousands per day in downtime then the shipping cost is less important. An Aircraft-On-Ground (AOG) situation can occur when an aircraft cannot fly as it requires a part, with this aircraft out of action it costs the airline thousands per day in lost revenue. So in this instance shipping can just be another cost to be absorbed. For less urgent day-to-day shipments it becomes more relevant. You wouldn’t want to ship a £10 item to a customer with a shipping cost of £100 as this is not cost effective. Consider different shipping options and, after reviewing the other ‘rights’, balance the cost accordingly. Less urgent shipments can be shipped by other, slower, more cost effective options such as switching air freight to sea freight or by using economy services over Express services.
7. Right Customer
Deliver to the right customer. This is different from the right place in as much as you should know your customer and their requirements. How many companies receive returned goods with ‘not required’ or ‘wrong item ordered’ as the reason?
Knowing your customer and their requirements will enable your company to provide an extra layer of support and guidance to your customer. You may have other goods more suitable to the customers requirement or market. For example: Would you deliver electrical goods with a UK power plug to a US customer? The customer may be unaware of the differences so you as the seller would need to highlight this issue.
The customer is key in all supply chains and should be supported as much as possible. Understand the needs of your customer and you cant go far wrong.
There is an extra ‘Right’ that is not normally mentioned in logistics literature when referring to the 7 R’s but when you work in logistics you soon realise what it is: Right Paperwork.
So here it is as the unofficial 8th Right:
Deliver the shipment with the right paperwork. Just as important as the other 7 rights because if you do not despatch a shipment with the correct paperwork it be refused, delayed or ceased. As a shipper you will need to be aware of the specific paperwork is required to ship your goods. Domestic shipments may only require a delivery note but international shipments can have many requirements such as commercial invoices, certificates of origin, material safety data sheets (MSDS), licences and compliance certificates. As a logistics manager you should review all the regulations and requirements between your country and that of your customer and check the documentation requirements. All the necessary paperwork should be prepared before the shipment is despatched to avoid any costly delays during shipping.