SMALLER, FASTER, SMARTER

How Distribution Centers and Warehouses are Evolving to Meet Customer Convenience

Ecommerce is changing supply chains as we know it.  You have heard this sentiment before and witnessed the apparent effects across material handling.  Consumers have more access to information than ever before and fulfillment centers must figure out the ideal distribution n storage configuration to meet market demand.  Rather than thinking larger, companies may want to focus on smaller, faster and smarter.

SMALLER:

  • Specialization –
    • Greater technological capabilities in a warehouse or distribution center opens greater potential for SKU slotting and storage design.
    • The ability to take fulfillment data in real time provides a warehouse the opportunity to maximize storage capabilities according to customer demand in a smaller facility.  Instead of trending larger, facilities are re-configuring pallet storage and other warehouse operations to fit specific inventory management needs.
    • Increasing operation efficiency leads to more production per square foot, so companies can get more out of smaller facilities than ever before.
  • Flexibility –
    • Consumer demand is changing very frequently so it is more vital than ever to maintain a flexible distribution design.
    • Smaller facilities provide greater maneuverability to adjust to market trends and to maximize product availability at peak demand times.
    • This allows a fulfillment center to adjust SKU configurations according to previous market demand and to increase the “elasticity” of the supply chain.
    • Storage flexibility makes controlling costs more manageable while customizing inventory management down to the last SKU position.

FASTER:

  • Closer To End User –
    • Companies interested in the last mile of supply chain management are in hot pursuit of the coveted locations in and around large markets.
    • Setting up facilities closer to the end user allows for quicker delivery times and capabilities that are more convenient for customers.
    • Faster distribution helps a company stand out and localized distribution speeds up the last mile supply chain to reach customers consistently on time and within a more convenient delivery window.
  • Customer Preferences – How do you shop?  What convenience appeals to your buying preferences?
    • Customer acquisition is more important than ever and now distributors have the information to appeal to a specific shopping preferences.
    • Whether a shopper prefers buying online or purchasing in store, fulfillment centers are still searching for the perfect position to ship anywhere, anytime.
    • Understanding how customers shop will help distributors design optimal storage and delivery configurations specific to their market.

SMARTER:

  • Inventory Management –
    • Warehouse technology is the new frontier and the more automated systems implemented across a supply chain, the greater capacity for output.
    • Warehouse management systems streamline inventory and enable facilities to pinpoint key fluctuations in market demand.
    • These analytics help distribution centers deliver specific product mixes throughout the year.
    • Smaller fulfillment centers will appeal more to distributors with specific product mixes and demographics.
    • Specialized distributors will focus  on delivery capabilities rather than product mixes to ensure that product availability fluctuates to consumer demand.

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