Blog postsJanuary 05, 2017
Flying Warehouses! And Mobile Fulfillment Centers that Exist Today
An Amazon patent was recently discovered, detailing plans to create an “airborne fulfillment center.” Illustrations in the filing show a flying warehouse, which would remain at high altitudes as drones fly back and forth between the warehouse and nearby shipping destinations.
The flying warehouse is designed to do things like hover over stadiums and restock concession stands in real-time. It’s also predicted to get products closer to customers and respond to demand surges before they occur.
When you look at the challenges Amazon might be trying to solve with this technology, it seems to come down to 1) getting product closer to customers, 2) responding to demand in real-time, and 3) cutting transportation distances and costs. All very important issues.
In short, it enables Amazon to “pop-up” fulfillment centers anytime, anywhere.
Airborne fulfillment centers are likely several years and stacks of regulatory hurdles away from reality. But, this idea of a mobile supply chain is happening today.
Leading e-retailers are using pop-up fulfillment centers to augment their supply chain to do similar things as the flying warehouse might do.
One big shoe retailer recently used this type of warehousing to support its pop-up store campaign. The ability to place temporary fulfillment centers close to its pop-up stores enabled the company to enter three new markets it otherwise couldn’t have reached with it’s existing, fixed infrastructure.
One of the largest bed-in-a-box companies is using pop-up fulfillment to cut transportation costs and respond to demand surges faster than its competitors. Pop-up fulfillment has made the company’s supply chain mobile, able to adapt quickly to changing dynamics.
Pop-up fulfillment centers might not fly—yet, but their non-permanent nature is helping these companies create a supply chain that is mobile and drastically more responsive than their fixed-location counterparts.
The key to pop-up fulfillment centers is they can be placed anywhere, anytime and you only pay for the time you are using it. They are still land-based warehouses, but the ability to move fulfillment locations at the drop-of-a-hat—without any capital risk—creates a supply chain that can move in similar ways to a floating warehouse, minus the ability to fly of course.
There are a handful of benefits to augmenting your supply chain with mobile/non-permanent fulfillment centers:
- More responsive to changing market dynamics
- Get products to customers faster
- Enable a customer-centric replenishment strategy (one of the big competitive advantages for fast fashion retailers)
- Respond to surges in demand faster
- Cut transportation costs
Amazon’s airborne fulfillment centers take pop-up fulfillment to the next level, making it possible to relocate warehouses in the face of inclement weather and perhaps one day deliver my Pho takeout via drone, directly to my desk and still piping hot. The ability to navigate your fulfillment center to different areas based on variable factors is definitely one to watch.
While we wait for the airships to arrive, we are fortunate to have a handful of new technologies that are already here. Ideas that have arrived. Ones like pop-up fulfillment and Uber-style freight delivery. Or even ideas like driverless cars and drones, which once seemed as foreign and far-off as a flying warehouse, but are now standing at our doorstep.
In addition to pop-up warehousing...
Here are a few other new technologies that are making supply chain management more efficient and responsive than ever before.
In short, we are talking about the Uberization of transportation to address last mile delivery. Last mile delivery has become more and more important as consumers expect in-store pickup and same day delivery. However, sending trucks several times a day to every store in big cities costs a lot of money and is complicated given unexpected disruptions. To resolve this issue, many companies are exploring options like Cargomatic or Convoy, which are technology companies that offer on-demand trucking services.
Robotics and automation:
The introduction of robotics into the supply chain has reduced costs, improved efficiency, increased productivity and accuracy for companies that have adopted various robotic solutions to tackle a variety of tasks. Today, robotics technologies take many forms and serve a number of important functions in the supply chain, from assembling widgets to reading bar codes to moving products from one area of a warehouse to another. Robotics appears to offer a promising future in distribution as well. Daimler is looking at ways to automate smart, economical courier vehicles. And, of course, some companies, like Amazon, are making strides in the development of drone delivery.
Supply chain modeling:
One of the best ways to realize significant shipping cost reductions may be to rethink your supply chain design. Expanding your network of distribution centers can position key inventory closer to customers and shipping destinations. Placing distribution centers in just the right locations can reduce indirect shipping paths, zones and ultimately reduce the costs of two-day shipping. Supply chain modeling allows you to find the right supply chain design for your business by experiment with different scenarios that weigh additional distribution centers against shipping costs. The analysis can be very beneficial, but it’s complicated and involves numerous factors. That’s why supply chain design and modeling software like Tactician from Starboard is so important. Supply chain design software does the complex mapping and analysis based on your unique requirements and calculates the benefits of each scenario.
Inventory management systems:
Today’s highly advanced inventory and network optimization tools provide visibility and insights both at a high level and the most granular level. Today’s advanced inventory management technologies directly integrate just about every aspect of our complex physical inventory world into computer-based systems that make them manageable. One of the largest expenses for many organizations is the cost of inventory. These companies know how important it is to keep a close eye on inventory levels. The inventory systems of today are highly sophisticated. They bring simplicity to inventory optimization and tracking, help manage procurement, receiving and returns, assist with demand forecasting and planning, call attention to spoilage and obsolescence and provide insightful analytics at every step. And they provide centralized intelligence and control for organizations with multiple distribution centers.
No doubt Amazon has a handful of other bold, new ideas lurking on someone’s desk, just waiting to be submitted to the U.S. patent office. This latest one, like all bold ideas, has everyone thinking about what’s next. Supply chain technology is changing every day. It is a time to try new things and, fortunately, there are lots of new things to try.
What’s next for your supply chain? What new ideas are working for you? How can we help? We want to hear from you!