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 company I had just joined was only a few months away from completing a multi-year project to revamp their primary Distribution Centre. The project would cost a total of $25 million, which seemed like highway robbery.
Part of my job was to see the implementation of the project brought to a successful conclusion, reaping all of the anticipated benefits.
But as I worked through the pains of a new system implementation, and gained more first hand knowledge, it occurred to me that the system design was completely lacking in strategic value.
The retail company I had joined had just invested $25 million to automate their Distribution Centre. They automated the process of fulfilling orders in individual units, or eaches, instead of case fulfillment.
As I learned more and more about the system and the operation it became obvious to me that the entire paradigm that went into the $25 million investment was wrong. They wasted at least $20 million by perpetuating individual unit.
They could have save a lot of time and money by changing their fundamental operating model to one of case fulfillment – the Retail Holy Grail!
There is nothing new about warehousing. Written records from ancient civilizations refer to the storage of items in bulk so that they can be used at a later date. The Bible records Egyptian people storing the surplus of agricultural goods so that they could be used in times of famine. Whilst a modern warehouse clearly does a lot more than stockpiling food, the principle remains, including the warehouse role in fulfilment.
Merchandise warehousing can be defined as “the storage of commodities and products for profit”. Here we take a closer look at the role that a fulfilment warehouse plays in the modern distribution process.