In 2014, Amazon launched same-day delivery in several major cities, changing the game for both traditional retailers and the entire fulfillment industry. Since then, the company has further expanded service in major markets throughout the country while fostering the development of their own final-mile delivery service.
Innovations from this one leading company have upended consumer expectations, necessitating greater speed and efficiency throughout the industry. For fulfillment and logistics professionals, this challenge has been met by implementing technological advances that can meet the public’s increasingly high expectations.
Speed, Efficiency, and Transparency Are Key Reasons for Innovation
While fulfillment used to be about performing receiving, picking, packing, and shipping without error, speed is now paramount both in terms of warehouse operations and the flow of data within the supply chain. When supply doesn’t keep up with demand, or when delivery estimates are too far out, it becomes a major competitive disadvantage in a way that it wasn’t even a decade ago. Consumers can quickly find alternative options online and even business clients will become frustrated and may look elsewhere. The rise of free shipping offers also presents challenges, because it cuts into retailers’ bottom lines.
Consumer expectations are a key driver of innovation, according to a recent industry report that polled warehousing professionals. Technological innovation was seen as the best way to address these challenges. Ultimately, changes in the marketplace necessitate fulfillment changes. Businesses must be flexible in responding to consumer requests in real-time, while also providing warehouse staff with the resources and information to fulfill and ship orders faster.
Innovations that Satisfy Customer Demands
To enable a greater variety of inventory while reducing the time it takes for goods to get from warehouse to consumer, businesses must optimize their existing operations while implementing new technologies. Often these go hand in hand. Using RFID along with smart shelves serves to automate much of the inventory management process. It also provides greater visibility into supply level and allows human labor to be shifted to tasks that are not yet automation-ready, like quality control and return processing.
RFID and smart shelving also facilitate the expanded use of robots in warehousing. Instead of humans finding and picking inventory, these technologies can direct robots to the correct shelf locations and ensure they pick the correct items. A recent study suggested that warehouse automation will experience significant growth in coming years. These systems provide quality control and error reducing contingencies that are the foundations for greater automation in the warehouse.
The expansion of overall Internet of Things (IoT) device use in warehouses, shipping, and delivery operations will greatly improve coordination in ways that speed order fulfillment and delivery while being more transparent with the consumers about this process. In the near future, customers may be able to track their merchandise in close to real time as it moves from warehouse to their home.
Furthermore, with the proliferation of IoT devices, the quality and volume of logistics data that businesses can use should rise exponentially. Using Big Data methodologies, all of the information can be analyzed for trends and to drive improvements in processes. This will help improve customer satisfaction while leading to greater overall efficiency.
Ensuring Inventory is Located Close to Customers
The consumer desire for faster delivery has lead to a proliferation of regionalize warehouses in close proximity to major population centers. Inventory control is one of the casualties of this process. Many businesses find it challenging to keep product at the right place at the right time.
This is where Big Data can come into play. Trends can be tracked in real-time and local warehouse inventories can be updated to compensate. For example, if a particular item is selling quickly in Chicago, stocks of that item in other cities can be moved there. Time is of the essence in such adjustments. If it takes a week to redistribute inventory, a given product may end up on backorder for four days, and customers may have already purchased it elsewhere. It’s essential for a fast, updating warehouse management solution (WMS) system to be in place to handle quick changes in order to prevent shortages.
Better Handling of Customer Returns
Consumers also expect to be able to make returns of products they buy online, especially for items like clothing. Having an inefficient return system can be costly for businesses. Non-damaged, non-defective merchandise must be quickly returned to the shelf for future fulfillment.
Delays due to slow return processing at a warehouse can cause inventory mismanagement. A company may order more of a seasonal item that is need. Better coordination between the warehouse, order processing, and return process can help mitigate this. For example a barcode-based return system can help businesses speed up return processes, while integration of customer return data with a WMS can help better control inventory.
A More Efficient Supply Chain Helps Balance Rising Shipping Costs
To combat rising shipping costs, many businesses are looking to reduce costs at other points in the supply chain. More streamlined fulfillment and more efficient warehousing are two areas where businesses can realize cost savings.
Integration is a key component of making technology work. By connecting all the parts of the supply chain through solution that integrates with the warehouses’ WMS system, inventory management becomes more effective. It becomes easier to direct merchandise downstream and it allows for better coordination between real-time consumer patterns and inventory flow.
Third Party Logistics
Many businesses cannot meet all these challenges on their own; the upfront investment required to move to the next level technologically is not financially feasible. This is where third party logistics (3PL) come into play.
Businesses can leverage the scale, resources, and advanced technologies that a 3PL partner offers to streamline their operations without shouldering the entire costs of doing this themselves. These services frequently offer the deep logistics integration that is essential to speeding up the supply chain. They may also offer an abundance of possible warehousing locations, allowing merchandise to be stored closer to customers, allowing faster order delivery.
In order to adapt to consumer needs and general trends in eCommerce, businesses must ensure their fulfillment operations are making use of the latest technologies.
If you need a partner to help you strategically manage and successfully move your products out of the port and onto their final destination, be sure to download our ebook - Speeding Time-to-Shelf and Cutting Costs- a must read for today’s logistics managers.