Pop Up Distribution Centres – A Logistics Crisis Solution!

Pop Up Distribution Centres

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The concept of Pop Up retail stores have been around for a long time. Whether testing a new brand or serving a short season like Halloween or Christmas a Pop Up store is a temporary solution to satisfy a short term need.

Right now we are faced with a global logistics crisis. Container ships are back logged at ports and truck drivers and transportation equipment are in short supply. And businesses are scrambling to get their inventories positioned to satisfy demand for Holiday and beyond.

One potential solution to help through the Logistics crisis is to start deploying Pop Up Distribution Centres. This concept can help mitigate the impacts of crisis and help companies salvage their businesses during the Holiday season and beyond.

The Logistics Crisis

The Coronavirus pandemic has wreaked havoc on Supply Chains in virtually every industry and in every country. And the breadth of disruption continues to expand well into the life of the pandemic.

Companies that are shipping goods over the ocean are finding problems in getting container space, getting space on ships, getting priority at the ports of embarkation, getting ships to arrive at their destination ports, and getting their containers offloaded.

Companies that are transporting goods over the road are finding challenges in getting trucks, getting drivers to drive the trucks, and getting goods delivered on time.

Companies are also finding challenges in securing the space needed to store their goods. Everyone is clamouring for the same footprint of warehousing and distribution centre space, particularly heightened during the Holiday season.

And every aspect of getting these goods moved throughout the logistics network is costing more than ever before.

This is a Logistics crisis.

Looking for Solutions

Businesses still need their goods and they still need to run. This means that Logistics professionals are scrambling to take all necessary steps to overcome these obstacles. They have no choice. No goods means no sales which means no company.

In order to overcome the ocean shipping problems some companies are chartering their own ships, buying their own containers, and rerouting their ships to less congested ports.

But when the goods do arrive on land companies are more often than not stuck in their current paradigm. They are going to truck their goods to their existing Distribution Centres and Warehouses, whether they be owned or contracted.

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Unless you are Amazon, with Distribution Centres located everywhere, more likely you have one Distribution Centre, or perhaps a couple more, and these facilities are the heart of your logistics operation. You have always had to get those goods transported across the country to these select locations, from which you then disburse your goods back across the country to points of consumption.

The problem with this model, because most companies have a small, limited number of these facilities, is that you are contributing to all of the factors that are fueling the logistics crisis in the first place. You are tying up trucks and truck drivers in moving the goods to your centralized facilities, you are congesting your facilities with goods, and you are also tying up trucks and truck drivers in moving goods out of your facilities.

What if you could change your current operating paradigm and get your goods to market, perhaps even faster than normal, without tying up all of the constrained resources that are a part of the logistics crisis?

This is why you should consider a Pop Up Distribution Centre.

A Pop Up Distribution Centre Defined

A Pop Up retail store is likely a more familiar concept for many. One of these stores may appear to test market a new brand or product line. It may appear to support the Halloween season, or the Christmas season. The stores appear out of nowhere and are open for a very short time, from a few days to a few months at most.

These stores do not typically have all the bells and whistles associated with a permanent store. You are likely to see the walls and ceiling infrastructure that are usually hidden in a permanent store.

The same concept can apply to a Distribution Centre. As a temporary facility a Pop Up Distribution Centre does not have to have all of the infrastructure and capabilities of a permanent facility.

In its simplest form all of you need is floor space, a few hand operated pallet trucks, and a computer with an internet connection. A more elaborate setup can include pallet racking and a forklift truck, and obviously a computer to provide system level connectivity. But beyond that a temporary set up doesn’t really need much more. Simplification is key.

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Imaging a larger number of small Pop Up Distribution Centres located across the country close to your customers, for instance. The advantage of a Pop Up Distribution Centre is that you can eliminate the need for duplicate transportation, storage and handling of your goods to centralized DCs, all of which requires constrained resources (eg. trucks and truck drivers).

You can receive goods into these facilities very close to your ports of arrival or manufacture, or close to your customers. You can store these goods locally in small Pop Up facilities without moving them to a centralized facility. And you can drop ship from these more localized operations getting your goods to customers much more quickly.

By reducing your traditional need for truck drivers and trucks to move goods to centralized Distribution Centres, and by reducing your need for those same resources to move goods out of your DCs and to your end markets, you are increasing your ability to get to market faster and at a lower cost.

Conclusion

During a crisis, like the logistics crisis we are in, you need to think outside of the box. When resources are constrained, you need to reduce your need for those resources. When time is of the essence you need to reduce process steps and movement which take time. And when market demand is perishable you need to get your goods to market faster.

Pop Up Distribution Centres are a solution which can help you with all of these objectives. Reduced demand for constrained resources, reduce time and get to market faster. The core premise that you must always remember is that you need to keep the implementation as simple and easy as possible. If you are making it too complicated you increase your chances of failure.

Pop Up Distribution Centres article originally published on November 2, 2021.

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