At the RILA Retail Supply Chain Conference 2017 the message was clear: when it comes to the retail supply chain it is no longer “business as usual.” Omnichannel retailers increasingly face the challenge to deliver when, where and how their customers demand—without breaking the bank.
Naturally, these changes complicate retailers’ transportation and distribution requirements. While they want to keep products in stock, they also want to increase the speed of inventory through the supply chain—practices that don’t necessarily go hand in hand. Finding a balance requires an evolution of the supply chain.
Expanding Distribution Networks Speed Delivery
Traditional distribution networks lack the efficiency and flexibility necessary to accommodate omnichannel distribution. Often, simply changing the number or location of distribution nodes can help to improve delivery times and control transportation costs. Strategically located facilities enable faster delivery using ground service.
“We’re seeing customers expand the number of distribution centers—establishing more regional locations, opening smaller facilities like mixing centers and cross-docks, etc.,” says Brad Rolland, Sr. Director, Business Development, Saddle Creek Logistics Services. “The goal is to get closer to the end customer, move products through the supply chain faster and minimize transportation costs.”
Real-time Transportation Demands
Clearly, omnichannel is changing the way freight moves. The length of haul is shrinking, there are more loads per day per driver, and the load count is more variable. With less freight going to big box retailers, shipments are increasingly shifting from full truckload to LTL and parcel.
When truckload shipments are used, there’s a growing expectation for rapid response. “In the past, retailers would say, ‘I’ll have a load five days from now.’ Now they’re saying, ‘I’ve got a load ready. Can you haul it now?’” Rolland explains. “They’re looking to logistics partners to be more agile and responsive with real-time capacity.”
Challenged to compete with giants like Amazon, who have relationships with a multitude of trucking companies, some retailers are utilizing smartphone apps that enable them to connect in real-time with thousands of trucks in the area.
While the convenience and immediacy is appealing, retailers must be careful, Rolland cautions. “You don’t want to sacrifice service, reliability or safety in the process,” he explains. “It is important to work with established providers you can trust with your brand.”
As omnichannel retailing evolves, it will continue to put pressure on supply chain operations. For optimal performance, retailers should seek out a logistics partner with the experience, resources and network to accommodate whatever the future brings.