Warehousing is evolving because of e-commerce.
Consumers want to be able to buy products at any time and from any location, whether it’s online, on their phones, or at a shop. As a result, merchants must now provide efficient and dependable omni-channel fulfilment.
Retailers and logistics providers are upgrading their distribution networks to focus on the consumer to better match business models with the new paradigm, resulting in various interesting storage innovations.
The physical size and positioning of distribution centres are two of these patterns. Increases in order flow, along with increased numbers of stock-keeping units (SKUs) and more sophisticated orders, are driving the demand for more aggregate DC capacity. Retailers are also moving inventory carrying costs and direct fulfilment processes closer to storefronts, necessitating a greater DC footprint.
In contrast to the big DC model, increasingly exacting customer expectations in terms of delivery times and returns are driving the growth of smaller and more regionalized warehouses and DCs. As a result, a growing number of possibly smaller DCs are being established near key population centres. This stance also allows retailers to hire more people to handle their e-commerce fulfilment operations.
Inbound Logistics Gets Its Spotlight
With e-commerce driving fast warehouse transformation, merchants and logistics providers must consider how inbound logistics might aid in the optimization of e-commerce fulfilment processes. Even though it is concealed from the consumer’s view, inbound logistics has a significant influence on the customer experience. Many online shops, for example, advertise two-day shipment, although this does not imply two days for the store or logistics provider. Customers may expect two-day delivery because of a symbiotic relationship between shipping, fulfilment, and inventory availability. Because of their symbiotic links, it’s critical to look at the supply chain.
Three Ways to Improve Inbound
Demand planning, modal selection, and product availability are three critical components of inbound logistics that provide a better e-commerce experience. Product availability is the most obvious of the three to customers. A sale is halted in its tracks if a product is not available to order. Lack of availability, depending on the duration in which a consumer may want a product, may drive business away, allowing other shops to gain market share.
Modal selection is less obvious to the consumer, but it is no less crucial. This should be approached with caution since it may become a delicate balancing act between profit maximization and availability. The ebbs and flows of the price environment present a challenge for transportation executives, who must also choose between less-than-truckload (LTL) and truckload.
Demand planning is the third part of inbound logistics that can significantly relieve the stress of deciding which mode to use. Many various departments within a firm educate and impact demand planning, with marketing being one of the most essential. Marketing campaigns can substantially disrupt fulfilment if they are not connected with demand planning. A website may offer a cheap bundle of items, but if a DC is not prepared with the right stock for fast delivery, the online special will result in many disappointed customers.
The Secret to a More Effective Supply Chain
An otherwise adequate fulfilment operation can be disrupted by poorly planned inbound activities. Supply chain visibility is the most essential solution to the problem. A more comprehensive approach to supply chain management—one that includes visibility into the complexities of inventory supply, inbound transportation, order fulfilment, and outbound transportation—can help to deliver a great omni-channel experience, one that encourages customer loyalty and maximizes profits.