Ecommerce is prompting a supply chain sea change – for retailers and manufacturers alike. As more manufacturers add direct-to-consumer sales channels, they face the same daunting customer expectations for speed and service that have challenged retailers in recent years. They’re also seeing their retail customers’ expectations escalate.
In the latest issue of Inbound Logistics, Perry Belcastro, Saddle Creek’s vice president, fulfillment, and other industry experts discuss the challenges and opportunities of an ecommerce supply chain.
Following is an excerpt from the article “Ecommerce: Cultivating a New Logistics Landscape”…
Mastering the Distribution Network
Along with technology, a distribution network that enables an organization to optimize the location of its inventory is key. Given transit time and shipping costs, operating from one or two locations rarely is optimal any more.
A 3PL with a network of facilities provides the flexibility needed to manage inventory and orders across multiple locations and to accommodate growth, Belcastro says. That’s key for companies that lack the volumes needed to make it practical to operate from multiple locations. As a company grows, it can expand throughout the 3PL’s network without an inordinate capital investment.
Another type of flexibility an organization needs today is within its own operations. Many companies need to ship small parcels to consumers, and also build pallets for wholesale and retail deliveries. “We’re seeing more demand for these dual capabilities,” Belcastro says.
In addition, more companies also are looking for some level of customization, such as embroidery, engraving, or special product configurations such as multipacks, Belcastro says. Companies that decide to offer these solutions often need to invest in training and capital equipment. They also need to determine how to fit these capabilities into the flow of just-in-time shipping.
“Managing the overall throughput of these services adds complexity,” Belcastro says.
Many companies turn to 3PLs to help them meet these goals cost effectively. “We view ourselves as warehousing, distribution, and logistics experts,” Belcastro says. “Many companies prefer to stay focused on product development, brand management, and customer lifetime value expansion, and leave the rest to us.”
For more on ecommerce in a B2B environment, read the full article.