Everything interesting, new and useful about the logistics and 3PL Industry

Archive for June, 2014

Retail Trends to Watch in 2014

The supply chain is always sensitive to trends, and retail is the trickiest of all. Consumers love to jump on new products and new ways to shop, and as online shopping continues to soar in popularity, the warehouse industry makes it possible for retailers to reach bigger markets and sell more products. However, new trends in e-commerce might change the role warehouses play in the future of retail.

Ship-from-Store Options

More and more shoppers are skipping brick-and-mortar stores to order from store websites instead. That might sound like good news for the warehouse industry, but there’s a new trend in ecommerce that threatens to bridge the gap between stores and behind-the-scenes warehouses: ship-from-store programs.

Major retail brands have long maintained national databases, to help them keep track of each store’s inventory. In the past, if a customer wanted something that wasn’t on store shelves, they could request it from another store, or the manager could add it to the next shipment from the warehouse.

Now, inventory databases are integrated into the online shopping experience. Shoppers can look up an item to see if their local store has it, but if not, they don’t have to drive to the next town. Instead, another store can ship it directly to their local store — or better yet, to their house. This process gradually inspired a larger trend among retail chains, turning stores into makeshift fulfillment centers for individual customer orders.

As online revenue continues to increase and customers expect more streamlined shopping experiences, more retailers will likely get on board, setting up ship-from-store programs. Future construction projects might even reflect this distribution center trend in the form of changed layouts or increased square footage. After all, they’ll have to designate more space for shipments and pick-ups. Ship-from-store options won’t render retail high-capacity warehouses irrelevant any time soon, but it’s still a trend worth watching.

Gimmicks, Specials & Bargain Websites 

Retail Trends

The warehouse and retail industries are symbiotic, creating a consistent flow of merchandise from a variety of different manufacturers. This is still very true in 2014, as the best brick-and-mortar stores thrive by embracing e-commerce and outsourcing their shipments and storage. However, savvy entrepreneurs are jumping onto the back end of the ecommerce trend. There are dozens of new retail companies that “exist” only online, without physical locations, and they rely on their interface to bring in customers who could purchase the same products elsewhere.

Warehouse managers must be able to assess any big change in demand, and decide whether staffing changes are also necessary to accommodate (or weather) it. As people with less retail experience jump into the retail business, managers will have to work harder to anticipate demand and coordinate their resources accordingly.

Shoppers are smarter than ever, and they’ll compare prices online even if they’re standing in a store aisle. The same gimmicks that sell products — limited-time sales and last-minute discounts — can throw off the predictability of the supply chain. When a brick-and-mortar store slashes the price of a hot electronic, pop-up electronics websites can respond with slightly lower prices, but warehouses must be able to accommodate that demand and get the products out.

As “free shipping” offers flood the Internet and online-only bargains keep shoppers in their pajamas, the demand for fulfillment centers will continue to grow. The warehouse industry can hold onto retail clients by focusing on capacity, efficiency and adaptability. Warehouses already make e-commerce look way easier than it really is; they can handle these new retail trends too.

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Utilizing New Technologies to Improve Warehouse Operations

M2M Technology

When attempting to make a warehouse operate more efficiently, there are few options that a third party logistics (3PL) provider can utilize. 3PL companies are specialized and focused on making sure their operations are functioning at peak efficiency.

The best news for shippers who don’t have a big budget for a crew to monitor inflow and outflow is that 3PL providers already have that infrastructure in place. The infrastructure is set up to such a degree that contracting with 3PL companies can turn out to be less costly in the end, as 3PL companies have perfected the process so your team doesn’t waste time troubleshooting.

M2M solutions have changed the way that technology can be used when it comes to warehouse operations. M2M or Machine to Machine refers to technologies that allow both wired and wireless systems to communicate with other devices of the same type. For example, storage and transportation is aided with the implementation of tracking labels that are smaller than your average UPC sticker but provide bar codes that enable managers to track location as well as temperature and the physical state products are in. If something is damaged, or removed from a storage area, M2M tech can alert companies automatically, allowing for 3PL service providers to deal with a problem before it takes hold.

Another M2M advancement that has been hitting the market in the last few years is the ability to monitor not just the temperature of the storage unit being used, but the individual temperatures of the products themselves. M2M solutions work to tell people if something has been damaged by being exposed to extreme temperatures much quicker.

Having this data at hand means the warehouse manager has a better understanding of what products are still viable at a glance and which need to be replaced. Using M2M logistic solutions keeps the return on investment when it comes to dealing with warehouse operations as high as possible. There are times when the ROI can have a razor thin margin between high and low, and getting as much information as possible about the products is the difference between turning a profit and recording a loss.

On-demand transportation is a relatively new offering from some 3PL service providers. On-demand transportation services take the worry of transportation management out of the hands of the warehouse operations chief. 3PL services handle the worries about transportation instead. On-demand transportation can still be somewhat costly and the return needs to be examined further, but for warehouses that are suffering from employment shortfalls, the option is there for the taking, even if it is only being used in the short term.

A good 3PL takes some of the trickiness away by offering up different solutions that are fully customizable and scalable. Having a one-size-fits-all approach in this type of business is counter productive. 3PLs are very good at making sure a warehouse operation is chugging along by tracking the actual product but also by making sure financial targets are being met. The inflows and outflows of a warehouse operation can be tricky depending on what sector of the market the business is operating in.




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Logistics in a World of 3D Printing

Logistics 3D Printing

It wasn’t too long ago that 3D printing was limited to science-fiction novels or incredibly expensive government and corporate prototypes. However, major advances over the past few years have made additive manufacturing, or “3D printing” as it is more commonly known, a very practical and increasingly cost-effective way to manufacture certain products. However, 3D printing technology is still very much in its infancy, and it is just now starting to become practical in specific industries.

How will the logistics industry will be affected by 3D printing?

One of the industries poised to be most affected by 3D printing is the logistics industry. After World War II, the global economy entered a period of time in which massive quantities of goods were produced in one country or region then shipped somewhere else on the planet far away from the product’s origin. Early on, this meant that the United States was shipping their goods around the world. More recently, robust logistical routes allowed countries like China and India to manufacture goods that could then be shipped to wealthier countries where consumers could actually afford the products being made. This scenario helped raise previously impoverished nations out of poverty, and was a boon for the global logistics industry.

3D printing is poised to completely revolutionize this status quo.

The good news for logistics companies

Fortunately, it is not all bad news for the logistics industry. While it is true that the ability to inexpensively produce manufactured goods in the destination country will reduce the amount of international freight being shipped, logistics companies will also see substantially reduced overheads.

The increased ability to customize products and materials will dramatically reduce warehouse requirements across the industry. Because products can be made to order, there will be less need for stockpiles of inventory. At the same time, next-generation 3D printing devices will reduce, if not eliminate, the need for low-level assembly line workers. With less money tied up in warehoused inventory, reduced warehouse requirements and less expensive payrolls, logistics companies will become more flexible and streamlined.

How logistics companies can survive and thrive in the new environment

While it is true that localized manufacturing will reduce the need to ship finished products across the world, it is important to remember that products that are 3D printed still require raw materials to be produced. Shipment of raw materials is likely to be even more important than it is today. Not only will large companies require direct shipments of the raw materials, but every household with a 3D printer will require shipments as well. Residential delivery of raw materials could be a massive boom sector for the logistics industry.

In addition to residential delivery, logistics companies can transition into more of a full-service entity. Logistics companies can move away from the 3PL model, in which a particular logistics company is only directly involved in one specific part of the supply chain. Instead, logistics managers can adopt a 4PL strategy, in which they serve as a comprehensive solution from raw material sourcing to home delivery.

Many experts believe that 3D printing has the potential to completely change the way the world economy works, and to dramatically increase the living standards of individuals across the globe. Inevitably, there will be some painful transition periods and rough patches, particularly for companies so integrated with the current economic order. However, with the proper foresight, logistics companies can adjust their business models to become even more important than they are today.






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