Ecommerce has changed warehousing and logistics forever and it’s technology that is enabling companies to win the race. That may be through the introduction of robotics and automation in the warehouse, or in the retail outlets themselves, with ‘cashierless’ bricks and mortar shops. Amazon is reportedly opening one of these stores in London and we look forward to paying a visit soon.
In order to keep apace of consumer expectations for immediacy and service excellence, having the right networks, technology and resources is critical. This is true for retailers and manufacturers, many of whom are turning to dropshipping to stay relevant and improve their profit margins. However, it is not enough to simply innovate. Implementing technology fast enough is proving a huge challenge for most companies. This was cited as the number 1 issue by over 1500 businesses surveyed by a leading hardware vendor.
Coupled with this, ecommerce creates other cost pressures and operating at scale requires technology investments to sustain a highly efficient and accurate service. Here are 4 things that retailers and manufacturers can be thinking about optimising, if they want a world class logistics operation. It could mean the difference between success or failure.
Automation or augmentation?
New research has highlighted that automation will play an enormous part in enabling the warehouse of the future. But it’s not as simple as whether to automate or not, since this requires total business transformation – it’s costly and may not be necessary to get the performance uplift required. The vast majority of companies are taking a hybrid approach instead, opting to partially automate aspects of their warehouse and logistics operations, or augmenting workers with technology to improve their efficiency. 77% of companies plan to augment their operatives but only 35% know how to go about this. Clearly, suppliers that can offer their customers a consultative approach and real-world experience will be best placed to support the transition to automated working.
Technology and data analytics
Companies need to get the right products to the right customer at exactly the right time – for the lowest cost possible. It is a careful balancing act to achieve and at the heart is real-time visibility of incoming orders, stock availability and returns, to support instant decision making. Just as technology is critical for efficiency improvements, data has become even more critical to long term success – with technology being the enabler to achieving deeper customer insights. Mobile first solutions that can support operational and strategic decision making are essential.
Fast, free delivery
Delivery expectations and the rising cost of meeting customer demand for fast, efficient delivery, is presenting a serious problem for warehouses everywhere to deal with. How to get stock to customers at the right time, for the lowest possible price, is a bigger issue today than ever as consumer demands for instant delivery continue to rise.
Currently, 62% of retailers are offering next day delivery according to new research but due to customer expectations, 83% of retailers plan to offer this service in future. 29% also plan to offer same day delivery in the future too. These premium services come at a price and the increased costs may be difficult to pass onto highly price sensitive customers, in spite of it being a viable business expense to recoup. In fact, many brands are concerned about increasing their delivery charges at all and will need to find savings elsewhere in the supply chain process to offset this expenditure. How can companies achieve the service levels desired without impacting their profitability levels?
To achieve excellence, retailers and manufacturers need to invest more in their warehousing and logistics to achieve high product visibility, intelligent and effective customer communications and efficient order processing and delivery systems. A WMS is one of the most useful additions to a busy warehouse and the reason why 44% of companies are planning to invest in this technology in the future. Whilst drones and robotics receive the highest levels of hype, it is the WMS (warehouse management system) software that is the single biggest priority focus for companies looking to address their logistics challenges.
On average, implementing a WMS will generate a complete return on investment in less than 12 months, with the potential to continue making the same savings over the useable lifespan of the software. Indigo has many years of experience working with companies to introduce a WMS in the warehouse and in doing so, they benefit from immediate process improvements.
Contact Indigo to discover how a world class WMS can help address rising ecommerce customer expectations www.indigo.co.uk