Many businesses begin with single-channel distribution. That sole channel could be a brick-and-mortar store or an e-commerce website. In either case, all sales flow through one outlet.
The advantage of a single-channel distribution management system is simplicity. There’s only one channel to manage, one channel to stock, and one channel to market to customers. As a business expands, however, the single-channel model can limit growth.
Everywhere you turn there is talk of a lot of very exciting technologies requiring Supply Chain investment. The Internet of Things (IoT), Augmented Reality (AR), Drones and Autonomous Vehicles, Robotics, Virtual Reality (VR), Artificial Intelligence (AI) and Intelligent Analytics are front and centre.
And all of these technologies have applicability for the Supply Chain in every business and in every industry around the world. The Digital Supply Chain vision is within our line of sight.
But most companies are still working with the same, manual, non-automated Supply Chains that they have had for at least the last decade. And they will continue to do so in the foreseeable future. They are faced with challenges which are going to impede technology investments to advance their Supply Chains going forward.
As we continue on in our 4th year here at Supply Chain Game Changer we have realized some exciting milestones.
We have exceeded 3 million views across the Website, LinkedIn and Twitter. We have had over 100 guest contributors to our site supporting our goal of sharing experiences and expertise. And we have now published over 500 articles since our inception.
Continuing in our tradition of years past we present here our Top 10 articles for the first half of 2020. As everyone knows the globe has been immersed in all things related to and impacted by the Coronavirus pandemic. We’ve written several articles with respect to the pandemic and the associated impacts on the Supply Chain, some of which are reproduced here.
Thank you for your ongoing support.
Here’s our list of our Top 10 articles of 2020, so far:
The Retail company I had just joined was undergoing a massive transformation. Fundamentally the new merchandising strategy was to curate a dramatically different set of products from that which was carried historically, but in addition to what was carried historically. What did this mean for the backroom in every store?
This meant that an enormous number of the business processes had to be transformed to support the new product set because management of the new merchandise required much different capabilities in all aspects of running a retail company. Not only did this transformation require new capabilities but it also required improvements to productivity and efficiency throughout the company. And overall this meant a need for cultural change.
I decided that I would introduce Lean process improvement techniques to this company.
The capability we had in E-Commerce order fulfillment was rather basic. We had employees manually pushing carts up and down standard warehouse racking aisles picking goods off of shelves. And when they had completed an order or a set of orders they would then push the entire cart back to a centralized order packing station.
As a Supply Chain Services company we needed a dramatically better capability if we were wanted to have customers trust their growing E-Commerce business with us. Pushing carts around a warehouse is both inefficient and lacks innovation.
We had to go back to the drawing board. But in doing so we would end up with a World Class solution!
The fast growing E-Commerce channel makes it an attractive avenue for most companies to participate in. The tremendous amount of investment required to participate in online product sales requires explicit decision making as to how a company is going to fulfill those orders. You need a warehouse design strategy to provide your fulfillment solution.
The E-Commerce Fulfillment solution you choose must take into account your customer’s demands, your competitive pressures, and the financial constraints that most companies have to deal with.
What is the difference between Logistics and Distribution?
On the surface some people may consider them synonymous. Without consulting a dictionary both Logistics and Distribution suggest imagery involving the movement of goods.
But to anyone who works in Supply Chain, in particular with a title including either the term Logistics or Distribution, or if you work in a Distribution Centre or for a Logistics company, then there are distinct differences between these words.
We are fast approaching the Holiday season. Retailers would normally already have their goods on hand in Distribution Centres, Stores, and any other channels they may use.
But this year is different. The fallout from the global pandemic persists and shipping delays are rampant. Retailers should have had their goods by now yet for some their inventory hasn’t even left the country of manufacture. Even Christmas trees will be in short supply.
Panic should be setting in now if it hasn’t already. What are the options for Retailers to circumvent these logistics delays and get their inventory on hand in time for Holiday sales?
The State of Things
As reported by CNN on October 19, 2021, there are over 200,000 shipping containers waiting off the coast of Los Angeles, representing a backlog of over 2 weeks worth of work. That is notwithstanding the trail of additional ships and containers that are still on their way to Los Angeles.
Extending work hours at the port to a 24 hour schedule is alleviating some of the backlog but increased demand for products means that port workload will be heavy for some time to come. These backlogs and delays are not unique to Los Angeles as other ports in the US, Europe and Asia are experience similar problems.
The Financial Times states that as of October 15, 2021 there are 584 container ships stuck outside ports worldwide, double that of the same time last year.
These delays invariably lead to dramatic increases in shipping costs, which inevitably are going to work their way through to price increases for end consumers.
Even when those containers are unloaded another problem awaits. Getting enough trucks, and truck drivers, delays the pick up of these goods for delivery to parts unknown. The American Trucking Association has stated that there is a shortage of 80,000 truck drivers. The Coronavirus has dramatically worsened what was already a bad situation in terms of the shortage of drivers.
Any way you look at it Retailers are going to have a hard time getting all of the inventory they need to satisfy the surging demand, which will only be compounded when considering even greater demand driven by the Holiday season.
And in many respects this demand is perishable. Consumers will either go to other retailers who do have the inventory, or they won’t buy at all.
What are the drastic steps that Retailers can take NOW, to get as much inventory as possible into their channels?
Act Like It’s An Emergency, Because It Is!
In Retail the enormous wave of activity hits Supply Chain well before the Holiday season, as the massive influx of inventory hits the logistics channels and distribution centres. Normally by late October all of these goods would be on hand, in inventory, and positioned for the pending sales season.
Because so many Retailers are still waiting for goods that are stuck either on the ocean, in ports, or on the road, they must take DRASTIC steps now in order to mitigate any delays.
Here are our recommendations on steps that must be taken right now:
1. Put Your Team on High Alert
Create a SWAT team and a war room, with daily, if not hourly, governance and oversight. This is not a drill. Hire in extra outside consultants or resources as needed. There are lot of professional organizations offering Supply Chain as a Service (SCaaS). You need people working on this stuff 24 hours a day for the foreseeable future. If you don’t add extra resources now you will regret it later.
2. Spend MORE on Logistics
Plan to spend a lot more money on logistics, at least in the short term. Shipping costs are going up. PERIOD. Beyond that you should prepare your organization to spend even more. Remember, if you can’t get the goods into your customers hands, that demand is likely perishable. So you must spend more to get those goods into position so that you can fulfill as much of that demand as possible.
3. Proactively Manage Everything, Buy Whatever You Can, and Take Control
Proactively manage all aspects of your logistics network. Do not just leave this up to your carriers. These carriers are serving a lot of different customers, all of whom are also commanding attention and demanding expediting, and you are just one. You must make the decisions.
Buy any and all available inventory at your local Distributors and Wholesalers. Even if this means you need to take last minute actions to update your merchandising plan and online promotions, having any inventory is much better than having no inventory at all.
4. Implement All Alternatives for Moving and Storing Your Goods
Consider all alternatives for moving your goods:
Route the ships with your goods to less congested ports. Ensure these ports are working 24-7.
Hire truck drivers, and trucks, on contract to pick up and transport your goods. Consider paying for team drivers so that your trucks never stop running.
Charter airplanes and air freight your goods to their destinations.
Hire extra carriers and rent (or buy) containers wherever possible.
Establish local, mini “Pop-Up” distribution centres and storage facilities close to either the ports or your points of highest customer demand, to minimize the movement of goods. This should be done irrespective of where your current facilities are.
Implement drop shipping and avoid sending your goods to centralized distribution centres. Drop ship your goods directly to stores, consumers and other distribution points and avoid excessive handling. Even if this means stores will have crowded backrooms, or trucks in their parking lot, that is a lot better than having inventory stuck in a distribution centre, at a port or on the road.
Embrace a Touchless, or “Don’t Touch” paradigm in materials handling and storage. Forget your current processes and procedures. Moving materials multiple times and moving those goods on and off storage shelves is wasted activity. Especially when you are pressed for time you should eliminate all unnecessary handling and storage activities. The drop shipping model is an example of this new paradigm.
Buy as much inventory as you can now, far in advance of demand, and beyond normal order and delivery lead times. While this may be too late for this coming Holiday season, strong demand will continue for the foreseeable future. At a minimum buy the strategic elements of your inventory now.
Extend your delivery lead time parameters, as well as your order lead time parameters. Leave these exaggerated times in place until we are well past the point at which logistics delays are problematic.
Logistics Delays in Conclusion
Don’t just sit back and wait for your goods to arrive. This is not the time to be passive, complacent and indifferent.
Everyone is scrambling to get their goods all at the same time. That means that common resources (eg. ships, ports, trucks, truck drivers, distribution centres) are bottlenecks. Demand for these resources is far greater than the available capacity hence these logistics delays.
The result is that the people who are more aggressive, more creative and innovative, more determined, more organized, and yes more willing to spend money, will be more likely to get their goods earlier than you and everyone else.
Retailers are staring at the stroke of midnight with respect to getting their goods in place on time for the Holiday season. Take all measures, no matter how extraordinary, to bypass these logistics delays and get your inventory in your channels. Your share of your customer’s wallets, and your business survival, depend on it.
Gartner recently announced their Top 25 Supply Chains List. I always find it interesting to see the list, to see who came out on top, and to hear what their views are on prevailing trends.
But as I review the list, compare it to prior years, and consider the scoring methodology I do wonder whether the list in its current form continues to be relevant for identifying the best of the Supply Chain.
Lots of things are happening in Supply Chain Management! Is Supply Chain immune from fake news?
The field is becoming more digital, with end-to-end planning and blockchain technologies transforming the way products are coming to market. It’s becoming more strategic, as companies integrate their Supply Chains and use them as a source of competitive advantage – instead of just a back-office function.
Larger societal changes are affecting the way companies are planning their Supply Chains of the future – everything from the looming arrival of driverless cars, to consumers’ demands that companies be more socially responsible. And the prevailing use of the term “Fake News“.
E-commerce has changed the game of how parcels are transported and delivered to customers with the expectations of same day vs next day delivery.
With the help of advanced technology, the days have become shorter. We no longer have to wait for the sun to rise and set a few times before we receive that box of meat pie that’s probably not safe to eat anymore.
What once felt as if a pack mule was used to deliver a package, now seems like a teleportation device is involved in the delivery.
E-Commerce is the fastest growing avenue for doing business anywhere. It has been for many years and it will be for many years to come. In support of this your operations need to be World Class.
It is certainly a challenge to establish the sales, marketing, merchandising and transactional infrastructure to offer an efficient and effective E-Commerce solution to your customers.
At the core of the Supply Chain an enormous challenge is to have a highly competitive and compelling E-Commerce Fulfillment solution. So what are the key principles that you must have in place to design, construct and deliver a leading E-Commerce Fulfillment solution?
Both Logistics and the wider Supply Chain are vital to how companies run today, but the two are still so often confused. We put together an Infographic outlining some of the key differences and points of overlap between them.
While it may be an obvious distinction to many pros across the field, there’s still a lot of ambiguity – sometimes within companies, as well – about what constitutes Logistic Management, and what constitutes Supply Chain Management. As a recruitment firm with over a decade of experience specialized in this area, we figure we’d weigh in!
Amazon is an online marketplace used by millions of people globally. From clothing to electronics to toiletries, you can find almost anything on Amazon.Wondering how you can get in on the action and how to sell on Amazon? All you need is a small monetary investment to get started and the knowledge of how to run a successful listing.
Anyone can sell on Amazon if they can choose a product, set up a profile and find a fulfillment provider. The benefits of selling on Amazon range from access to millions of customers to the ease of their platform.
Here we’ll walk you through each step of the selling process from setting up your account to expanding globally. Learn how to sell on Amazon.
The trading industry has grown over the years in different areas of the business world, especially in how it affected the online community’s ability to market different products. The importing and exporting business is still the most lucrative industry anyone could venture into.
Aside from the full range of goods to choose from, playing a critical role as an importer/exporter can help you generate anywhere from a few thousand to millions of dollars monthly in revenue.
