Commentary | Viewpoint

Getting the Goods on Logistics this Holiday Season

Tags: Warehousing, Retail, E-commerce, Fulfillment, Retail Logistics, Visibility

Chris Jones is Executive Vice President, Marketing and Services, Descartes, 519-746-8110

E-commerce continues to be the growth engine in retail with a 15-percent increase in 2016, according to U.S. Department of Commerce (Q2 2016 versus Q2 2015). Online shopping drives logistics growth as almost every e-commerce purchase needs to be delivered to the consumer’s home. This has resulted in increased investment and jobs in the retail and related logistics sectors.

However, with its much higher retail sales, the holiday season requires that retailers and logistics service providers add seasonal resources to meet the incremental demand. The challenge is to minimize the amount of seasonal hiring required, which is why many retailers are stepping up their game in delivery, fulfillment, and warehousing technology to improve the effectiveness of existing resources.

Omni-channel Throws Delivery a Curve Ball

Home delivery complexity is one of the biggest e-commerce challenges for many retailers, especially those with multiple options for delivery such as private and dedicated fleets, LTL, regional couriers, suppliers, etc. Having a big mix of large and small format goods can compound the complexities. Delivery consistency becomes a top issue as omni-channel customers receive unpredictable experiences. Flawed home delivery experiences then may be reflected in consumer metrics like Net Promoter Score or, worse still, may chip away at brand loyalty.

Visibility also gets worse in the absence of a single transportation platform to manage disparate delivery modes. As retailers expand drop-ship operations, they also lose control and sight of the order once it gets to the supplier.

With a common visibility environment for all deliveries, retailers can make delivery choices based on new orders, and on an understanding of orders already heading to the same area. By logically grouping orders regardless of size and available transportation mode, companies can lower delivery costs while reducing lead times. A single solution also provides the retailer and the customer with consistent visibility into delivery status.

Shipping Is a Heavy Hitter

Shipping is playing a pivotal and expanding role in the e-commerce experience, with more than half of e-commerce consumers now browsing by available shipping options, according to a 2016 AlixPartners annual poll. As consumers are increasingly making online buying decisions based on convenience, retailers are being forced to upgrade supply chains and delivery networks to accommodate the changing demands.

Successful companies are turning to automated, integrated order management and fulfillment solutions to satisfy the diverse shipping requirements of their distribution network and the evolving demands of consumers. They are embracing sophisticated technology to automate business rules to select the best carrier and service, automatically generate ASNs, and support elegant drop-ship functions with branded packing slips and third-party billing.

By integrating shipping with enterprise resource planning (ERP) and e-commerce systems, companies close the information gap between applications to increase workflow efficiency and visibility, maintain order data integrity, and reduce labor costs. And these benefits translate to faster, cheaper, and more accurate deliveries for customers.

E-commerce Shakes up the Warehouse

For companies with an omni-channel distribution strategy, supporting multiple fulfillment channels also has a huge impact on the warehouse. Once orders are placed, getting deliveries out the door efficiently, accurately, and on time is the next priority. By implementing a systematic automated order fulfillment process that shares information between ERP, e-commerce, and carrier services applications (e.g., UPS WorldShip, FedEx Ship Manager, Endicia), businesses can streamline warehouse and inventory operations to satisfy the requirements of each distribution channel.

Different pick models in the warehouse are also required to drive efficiency, and an emerging best practice is to separate pick methodology by channel. For instance, picking and packing methodologies for e-commerce orders that typically have smaller line counts and faster turnaround expectations will differ from those used to pick and pack larger wholesale orders. With wireless picking and barcode scanning, companies can increase fulfillment accuracy and control costs through order validation, consistently ensuring the right product is expediently shipped to the customer. In addition, guided walking paths in the warehouse optimize picking, put-away, and inventory moves to increase productivity.

seamless in season

With e-commerce exploding and consumers demanding a seamless experience from shopping to delivery across all channels, companies are ramping up their roster to include innovative delivery, shipping, and warehouse technology—in time for the holidays.






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