Blog postsSeptember 18, 2019
On-demand warehousing 101: Digital transformation and the end-to-end supply chain
The supply chain industry is getting a makeover
Not a news flash, but the supply chain and logistics industries are in the midst of a major transition.
In this installment of our on-demand warehousing 101 series, we look beyond the warehouse to discuss how the supply chain is becoming digitized and why that’s good news for your business...
“Digital transformation,” as it’s often called, can take many forms. But, the underlying goal is to replace inefficient legacy systems and processes with new technologies to improve performance, increase visibility and control, and enable organizations to have information at their fingertips.
Basically, it’s about moving critical information off of paper and out of spreadsheets and, instead, connect traditionally siloed systems to unify data so real-time decisions can be made.
In the last two decades, technology has upended so many industries—making it almost impossible to imagine how we survived before the internet, cloud-computing, and SaaS solutions. Remember:
- Going to the bank to withdraw or deposit cash, instead of using Apple Pay on your phone?
- Land-line phones (in general) that weren’t a mini computer in the palm of your hand?
- Going to the doctor and seeing the thousands of files behind the front desk?
- Mailing in checks to pay your bills? Or even just corresponding through letters?
So much has already changed. And, there’s an entire generation nearing adulthood that will never know how many minutes we spent waiting for the AOL dial up (sound on), or what it’s like to send a fax, or even how to write a check.
Technology has drastically impacted our lives. It’s high time the supply chain catches up.
The old way
Getting goods from point A to B costs money—no matter how you spin it. But, investing in a traditional supply chain requires long-term contracts, fixed assets, and tons of paperwork to manage operations—more often than not, they were often necessary, but clunky, cost centers, not strategic opportunities.
To manage these heavy, costly investments, entire teams were dedicated to reducing supply chain costs and getting even leaner. But, not having all the information or relegating data to spreadsheets made it difficult to make decisions. Data seemed to be stuck in a blackhole—especially when the best frequency of reviewing operations and plans was on a quarterly basis. Today, that doesn’t have to be the case.
The new way
The supply chain of today can be completely different. Yes, your supply chain is still an investment and efficiency is still important, but now efficiency is achievable at a smarter cost. Digital transformation and new technologies make creating an end-to-end supply chain easier.
It’s true that much of the supply chain transformation has been driven by the evolution of retail and how consumers are buying products. eCommerce and omnichannel retail has forced some drastic (and much-needed) changes upon the operations that support the movement of goods.
Because of eCommerce and omnichannel retail, logistics has never been more complex or more important for your business. It’s also fair to say this isn’t going to change anytime soon. Buying behaviors, technology, and the logistics that support those things will only continue to evolve.
Today, without new technology-based supply chain solutions, starting a business or evolving to compete in today’s market would be cost-prohibitive; it’d be a non-starter.
So, what has held us back?
Disconnected systems, no overarching analytics, and fragmentation is leading to inconsistencies in data across inventory, supply, and demand. But, businesses have spent millions on warehousing costs, ERP systems, or fleets for transportation—all of which are often siloed—which has made transparency impossible, but has also made a lot of companies risk-averse.
Disconnected data results and unwillingness to invest in new technology that could be offering something really promising, but it sounds too similar to the empty promise that outdated technologies once offered.
Additionally, eCommerce and omnichannel retail has decentralized demand. People aren’t just traveling to stores, they’re also ordering online, or ordering online and picking up in store. The supply and demand model hasn’t been inverted, it’s been turned into a Rubik’s cube. This, of course, impacts inventory planning and allocation, from sourcing raw materials all the way to the last mile of delivery.
But we can guarantee Amazon isn’t resistant to new technology. They aren’t using spreadsheets to manage inventory or to predict demand—they are using machine learning and technology and algorithms to continually improve operations.
Make your supply chain the unsung hero
At FLEXE, we talk a lot about on-demand warehousing. The flexibility it gives to retailers and brands is unprecedented, and we believe in creating the open logistics network to optimize how goods move. From high-growth digital native brands to Fortune 100 enterprises, on-demand warehousing is a modern solution for storage and fulfillment.
But of course, warehousing is only one piece in the supply chain. Other technology-based solutions exist that are enabling retailers and brands to create faster and more efficient digital supply chains that aren’t cost centers, but instead competitive advantages.
From freight-forwarding to middle-mile and last-mile delivery to what shipping materials you use, new solutions are making it possible to create an end-to-end, digital supply chain. Here are some, just to name a few…
Freight forwarding: Especially today, in the midst of tariffs news, flexible freight forwarding is critical. Flexport combines a technology platform, expertise, and infrastructure to help businesses better manage the “black box” of freight forwarding, in order to plan better and smarter with the right information.
Inventory management and planning: Services like Union Crate make it possible for retailers and brands to manage inventory throughout an omnichannel supply chain and create more-accurate demand forecasts.
IoT and RFID: From asset management to warehouse inventory location to shipment verification, Impinj helps optimize the movement of goods both inside and outside the warehouse by bringing visibility and control to your inventory.
Technology-backed, full-service trucking: For retailers and brands looking to simplify their shipping process, Convoy provides on-demand trucking that connects companies who need to transport goods with truckers via an automated marketplace. This allows businesses to more easily facilitate shipping instead of having to rely on brokers or asset-based carriers.
Visibility into last-mile delivery: Technologies like Convey help with last-mile communication to customers and keep them in the know. They also help retailers and brands anticipate last-mile delivery demands to inform what type of warehousing and fulfillment network is needed to meet customer expectations.
Making end-to-end supply chain a reality
Creating an end-to-end supply chain doesn’t mean giving up your current solutions (though, in some cases, it could). Instead, it’s about augmenting what you have with new, digital solutions to create the visibility and control you need to continually improve operations.
Whether you’re ready to make enhancements today, or down the line, one thing is for sure: In 10 years, the supply chain will look even more different than it does today. Implementing new, innovative solutions for each step in your supply chain can bring transparency and trust to your organization, and ultimately, your customers.
You might also be interested in:
- Blog: On-Demand Warehousing 101: What is On-Demand Warehousing?
- Blog: On-Demand Warehousing 101: 7 Supply Chain Challenges Solved with On-Demand Warehousing
- Report: Gartner Supply Chain Brief: How Retailers Can Benefit from On-Demand Warehouse Marketplace
Download The 2019 State of On-Demand Warehousing whitepaper.
Learn more about on-demand warehousing, as well as marketplace pricing and trends.