Contrary to what many procurement professionals may think, all third party logistics providers are not created equal.
And as retailers are pulled further and faster into the omni-channel future the need for advanced third party logistics providers will only continue to increase.
The very nature of omni-channel means getting closer to the customer and when it comes to logistics this couldn’t be more true.
Products will actually need to be deployed closer to the end consumer in order to deliver rapidly and meet customer needs whether to the home, store, office, lockerbox or pick up centre.
Individual retailers and e-tailers will find themselves challenged to put such a network in place, and even those who attempt to do so will find they don’t have enough volume in regional centres to justify the automated fulfillment systems required to most rapidly and cost effectively pick, pack and ship both customer and store orders.
This is where the role of third party logistics providers that can consolidate multiple customers into the same regional operation becomes clear, as this methodology provides sufficient volumes to justify the investment in automated fulfillment systems.
In short, going forward retailers and e-tailers need to expect MORE from their logistics provider! MORE specifically, as highlighted above graphically, the expectation will be for 3PL operations which are Multi-Client, Omni-Channel, Regional networks with Environmental stewardship. Let’s dive a little deeper into each of these to better understand these great and growing logistics expectations!
Just as it sounds multi-client is all about creating shared campus type facilities which effectively house multiple clients in the same operation leading to a number of potential benefits such as:
– Capacity and Space Flexibility to scale logistics facility space up and down
– Flexible Cross trained Staff increased for peaks & decreased during slow periods
– Shared Management Team and Redundancy
– Jointly shared ROI for fulfillment automation
Omni-Channel is allowing your customers to effectively access, research and purchase your products in any manner they choose whether PC, mobile, tablet, kiosk, virtual store or in-store; and then deliver them, or have them available for pick up, when and where your customer would like. Some important service needs and potential benefits are:
– Rapidly Service both Store and Direct to Consumer Demand
– Provide Case or Each Picking as Needed
– Distribution Centre inventory reductions as combined demand
– Store Inventory Reductions due to Rapid Replenishment
What omni-channel’s all about is getting closer to the customer and the only way to do this from a product logistics and delivery perspective is to operate fulfillment centres in local regional markets. Depending on your customer experience objectives Canada could be effectively covered from or increased up to 10 or more if Same Day delivery is required. See the benefits of regional networks below:
– Supports Rapid Service for Omni-Commerce Deliveries
– Enhanced Customer Experience Direct to Consumer
– Improved Store In-Stock Due to Frequent/Rapid Deliveries
– Supports Store Size / Inventory Reductions
Many in the business world are still not sold on the sustainability agenda. Regardless of your own personal viewpoint the consumer backlash is building and those who continue to ignore and delay committing their company to more environmentally sustainable operations will pay a price at the hands of consumers. When it comes to carbon footpring of logistics networks, regional operations win hands down, see the benefits and opportunities here:
– Regional Facilities Reduce Transportation Component
– Environmentally Friendly LEED Facilities
– Multi-Client Recycling / Collaboration Programs
– Automation Utilizing Energy Efficient Equipment
Third Party Logistics began as a simple ‘pallet in’ and ‘pallet out’ public warehousing approach in the last century and as you can see the evolution of these capabilities has accelerated quite dramatically over the last 25 years.
Retail is now facing it’s own revolution driven by the multiplying technological customer touch points and a widening array of omni-channel product acquisition perogatives, many of which can be most effectively solved through multi-client third party logistics solutions.
The winners in our rapidly emerging omni-channel future will be those retailers who understand and embrace the benefits of third party logistics, and at the same time expect MORE from their third party logistics partners!
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