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A Guide to Distribution Best Practices

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A Guide to Distribution Best Practices

Warehouse operations and transportation take effort to manage. Different procedures and strategies can potentially influence production, costs, efficiency, compliance, accuracy and data collection. To stay ahead of these concerns and enhance the functionality of your warehouse distribution, it’s important to learn about the various elements you can practice to strengthen sustainability and capacity.

Warehouse and distribution center best practices provide a structure that can lead to success. Implementing these practices in your system can help you reach your goals, whether you’re aiming for reduced costs or labor, increased productivity and efficiency, organization, data and information accuracy, or regulated transportation.

 

Warehouse and Distribution Center Management Best Practices

Efficient warehouse operations are crucial for optimizing distribution strategy and organization. With improved efficiency, you may see an increase in productivity and a reduction in costs. Here are some of the most efficient warehouse best practices you can implement in your management.

 

1. Regulate Vendor Compliance

Vendor compliance programs may be crucial for collaborating and communicating about products and requirements. Warehouse distribution centers can enable a working relationship between suppliers and vendors to enhance efficiency and improve internal facility operations. Vendor compliance programs may help the supply chain process by:

  • Streamlining warehouse operations
  • Reducing handling of products
  • Improving transportation services
  • Checking that purchase orders are in compliance
  • Ensuring seamless movement
  • Providing visibility
  • Leading the way to increased customer satisfaction

A vendor compliance manager can handle and oversee these processes. Compliance managers are also responsible for monitoring all requirements and performance. With a manager in place, any concerns, issues or feedback with products or merchandise can be properly communicated to the vendor to reach a solution. Vendor compliance programs may also ensure suppliers provide sufficient information regarding standard case quantities, accurate bar code labels and advanced shipping notifications.

Observing the process of labels helps organize and optimize the warehouse distribution process. These processes may help identify any issues with non-compliance, which can produce ways of fixing the supply chain to enhance strategic relationships. Non-compliant shipments from a warehouse may cause a retailer to issue deductions or fees from a vendor.

Making specific changes without authorization can incur additional expenses that cause issues for your company. Minor improvements over a period of time that satisfy business rules and requirements can lead to overall efficient and productive operations that make a difference. Using your business guidelines, history, goals and customer service standards may help internal and external cost reductions as they comply with terms and conditions.

 

2. Employ Advanced Shipment Notifications

Advanced shipping notifications (ASN) can go hand in hand with vendor compliance. These notifications allow suppliers to see consistent status updates about when their product has been shipped from the warehouse and when it’s expected to arrive.

This information exchange is typically done with electronic data, which is part of an overall warehouse management system. With these notifications, you can improve efficiency by reducing delays or disruptions in the supply chain process.

Engaging a third-party logistics (3PL) company, such as Crown LSP Group, can help protect your investment in these kinds of practices. Upholding orderly communication among carriers and receivers is essential for scheduling receipts and prioritizing actions.

When receivers are notified of when to expect an incoming shipment, they will be better equipped to direct that product to the proper place. ASN also helps with management functions such as adequate staffing and receiving information about when shipment orders or inventory requirements are fulfilled. When transportation and labor are appropriately distributed and optimized, you can then begin to reduce the overall cost of operations.

Employ advanced shipment notifications

Some issues and questions that ASN can help resolve among vendors, retailers, businesses, suppliers and receivers include:

  • Notifying what orders have been shipped
  • Describing the items that are being shipped and their quantities
  • Notifying when the order is expected to arrive
  • Detailing if the shipment contains the complete order
  • Notifying if the load is packaged with bar codes
  • Listing the shipment or package tracking numbers

Many modern sellers may not even accept certain packages or shipments without an ASN, so you should implement this practice to help maintain accuracy and consistency. If someone identifies any error after a shipment label is scanned, you can immediately notify the supplier and quickly resolve the issue.

ASN can also provide efficiency with outbound transportation once the warehouse team is notified of incoming shipments. This procedure can help save time and reduce the likelihood of human error causing issues with sorting, unexpected delays and missing inventory.

 

3. Implement Automatic Data Collection

Automatic data collection, such as using bar codes, is more efficient than using manual processing. This implementation helps lower labor costs because most of the work can be done with technology.

You can also use radio frequency identification (RFID) tags to help with this process, as they help prevent human errors in counting or data information. In this instance, utilizing a company like Crown LSP Group lets you focus on what you do best with the help of flexible and scalable automated solutions.

Removing the need to handwrite long tracking or shipment numbers significantly advances your tracking process, increasing order visibility. In warehouse distribution, tasks or steps you can replace with technology make it easier for management because they will have fewer trivial things to focus on. Utilizing automated data collection technology gives you more time to focus on making decisions and streamlining your turnaround process.

Additional examples of ways that automatic data collection can help improve productivity in your warehouse can include:

  • Providing shipping and label bar codes
  • Boosting efficiency with handheld devices such as smartphones and tablets
  • Giving you control over inventory loss
  • Enhancing management and count of inventory
  • Improving data accuracy and analysis
  • Providing access to lot tracking and expiration dates
  • Establishing software to help with order management and production consumption

Implementing automatic data collection can help your warehouse benefit from these services, letting you meet business goals and customer demands. It may be helpful to evaluate your warehouse to identify areas that automation technology can improve. When establishing automation processes, check your existing records to ensure information accuracy, which helps you anticipate challenges or difficulties if you are new to the process.

Once you can verify that there are no outstanding maintenance issues, you can expect increased productivity and, therefore, increased sales.

 

4. Minimize Touches

By utilizing automation technology, you can also reduce touchpoints in your distribution strategy. Minimizing manual touches in your warehouse can affect almost all elements of distribution processes. This can include eliminating packing stations and replacing them with automated ones or implementing print-and-apply technology for labeling processes. An order fulfillment company like Crown LSP Group can help minimize employee touches and improve pick-and-pack operations by reducing unnecessary steps for orders to go through.

For example, picking to a shipping carton rather than a bin or tote would be much faster and may lead to improvement in overall systems and cost reduction. Essentially, every time a product or shipment is touched, it creates room for more expenses, errors and time delays. When innovation is disrupted, it can lead to obstacles that hinder acceleration.

 

Help minimize employee touches

 

Some other ways that minimizing these physical touch aspects can improve your warehouse operations include:

  • Minimizing operational costs
  • Reducing the likelihood of errors and time delays
  • Improving storage capacity
  • Streamlining process handling and internal procedures
  • Meeting higher demand
  • Processing faster deliveries
  • Maximizing profit margins
  • Gaining a competitive advantage

Regulation requirements for many industries are rapidly growing and changing, so you can further benefit from these advantages by staying ahead of the game. While changing your traditional distribution model or system may seem challenging, staying up to date to deliver a reliable flow is important for your business’s efficiency and success.

Being proactive is an essential strategy in any business or industry, so it’s worth taking the time to locate where you can reduce costs and generate improvements. Minimizing product touches can also allow you to minimize waste and allocate the extra time, energy and labor to more important processes that cannot be automated. This may be very helpful for the efficiency of your warehouse operations.

 

5. Engage in Cross-Docking

Cross-docking is a method that can help improve order fulfillment and enhance competitive advantages in many ways. Cross-docking involves taking incoming delivery shipments or products directly to outbound transportation vehicles.

This practice helps with overall quicker processing for high-volume shipments by speeding up the flow of goods between distribution centers and consumers or store locations. There are several kinds of cross-docking, including manufacturing distribution, transportation, retail and other types that can satisfy vendor and customer needs.

This procedure has many benefits that help your warehouse operations run smoothly, such as reducing:

  • Material handling
  • Production to consumer turnaround time
  • Shipment delays and costs
  • Inventory management risks
  • Packaging and labor costs
  • Holding and storage costs

All of these advantages benefit your warehouse and optimize your supply chain by increasing customer satisfaction and lowering overall costs. Cross-docking terminals let your business consolidate packages and deliver them to one destination without additional hassle and excessive transfers or storage. Moving goods from one delivery truck to another can help maximize productivity and ensure your time and money are being used wisely.

When administering the practice of cross-docking, it’s essential to maintain inventory control processes to stay on top of accountability and invoices.

 

6. Record Movement as a Transaction

All steps and movements within the warehouse process should be recorded as transactions to help determine which procedures are necessary and which are not. This action commonly relates to inventory transfers — when stock or shipments are moved between warehouses — but it can also refer to good issues and receipts. This method may help eliminate certain steps that take up time or money that can be improved or altered to contribute to efficiency.

In warehouse distribution, these steps or movements that should not be part of the operation are known as turnbacks, which typically need to be reported to help enhance optimization.

Removing certain components such as damaged goods and issuing returns and transfers must be recorded in a stock account to help maintain count and transaction information. Continuously recording these movements as a transaction can help improve operations when products and assets are continually scanned to maintain the integrity of your inventory data.

This process may also help prevent any disruptions or deviations in the management system and identify solutions. Inventory transfer documents and movement transactions should also contain information on:

  • Inventory postings and offsets
  • Pricing and purchasing analysis reports
  • Materials that are moved from one storage type to another
  • Customer consignment
  • Invoices for needed items and quantities
  • Bin locations
  • Transfer request status updates

Recording all steps in the distribution process can help in many additional ways, such as making it easier for you to determine when to reorder as well as improving accountability. Having all information documented improves the inventory process and reduces human error during the movement of materials. The retrieving process is also streamlined because, with fewer inconsistencies, there will be more time to properly control and track essential warehouse procedures.

 

7. Utilize a Warehouse Management System

A warehouse management system (WMS) provides a framework for keeping all functions and operations organized and in line with compliance regulations. Your WMS can be tailored to fit your business’s specific needs and requirements, especially with logistics services like Crown LSP Group, making it easier for you to customize solutions to your specifications along with any updated changes or regulations.

This flexibility positively impacts warehouse procedures that need to be simplified while showing what processes can benefit from automation. A WMS can help you increase visibility and monitor aspects that may lead to inefficiencies, such as:

  • Overproduction
  • Defective or damaged goods
  • Excess inventory
  • Overprocessing
  • Time delays

Utilize a warehouse management system

 

When these issues, along with many others, are more closely monitored and observed, it may create more room for components that actually add value to the supply chain. Using a WMS, you can more easily eliminate challenges that interrupt your order processing time by reducing any unnecessary transportation or movement that doesn’t contribute to productivity.

Having this system in place can optimize overall warehouse performance by:

  • Increasing distribution center efficiency
  • Identifying and reducing risks
  • Organizing execution processes and systems
  • Integrating workflows that meet demands

For manufacturers looking to use 3PL distribution centers, companies like Crown LSP Group help you structure these practices into your warehouse. Using an experienced company to generate your WMS helps your business set new standards and reduce diversions in your packing or transportation process. A WMS will help ensure you consider all critical success factors and that key elements are configured to fit your existing approach.

Before implementing a WMS, it’s important to address any possible concerns or challenges with your vendors and associates so you’re better prepared to adjust to the new change.

 

8. Evaluate Requirements

Regularly evaluating certain practices in your warehouse or distribution center is essential for effective adaptation. Being aware of requirements for your customers and operations provides an excellent opportunity for growth once you recognize the areas that need improvement. After planning, designing and employing effective operations, regularly check in on them to see how needs and demands have changed. Customer requirements tend to change frequently, so evaluating them often can help you stay on the path to achieving the results you wish to see.

Some additional ways that can help you evaluate customer and industry requirements are:

 

  • Verify quality and validation criteria
  • Consider significant supporting processes
  • Keep up with market conditions
  • Understand your accessibility, space and workflow
  • Monitor regularly to make corrections
  • Integrate traceability
  • Estimate consequences with change effect analysis

 

Warehouse and distribution centers may need to consistently adapt to environmental or internal changes, which can relate to the goods themselves or the inventory layouts. In any business, it’s always a good idea to review system processes and performance to see how they measure up to expectations and if you can alter them for efficiency. Practice this method by generating a consistent evaluation schedule that will allow you to get a better look at what strategies are working best.

 

Contact Crown LSP Group for Warehousing Services and Transportation Requests

Crown LSP Group is a distribution and supply chain solutions company that offers flexible and scalable services for your warehousing and transportation needs. We strive to provide you and your business with operational efficiency, cost-savings and value-added services to address your concerns and improve productivity. Our experience will give you the quality you deserve and allow you more time to focus on manufacturing and selling products.

Our services act as an extension of your business so you can move materials or products at a lower cost and increase your profitability. At Crown LSP Group, we understand that your needs are unique, so we are proud to adjust our capabilities to find new, customizable ways that benefit you.

Contact Crown LSP Group

Contact us to learn more about the warehouse logistics services we provide or visit our website to request a quote today.

 

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How To Prepare Your Supply Chain For Winter

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How to Prepare Your Supply Chain for Winter

From blizzards to freezing rain to brittle cold snaps, winter weather can be hard on the supply chain. Cold weather can affect supply chains in many ways, including disruption in transportation routes, damaged cargo and sudden power outages. By planning ahead for the impact of winter weather on supply chains, businesses can prevent costly delays and fulfill orders efficiently.

This guide to preparing supply chains for winter discusses the importance of planning ahead for winter, as well as some of the top ways cold weather affects the supply chain. We’ll also provide tips on how to prepare your supply chain for winter weather and the benefits of partnering with a trusted third-party logistics provider for all your winter transportation and logistics needs.

Importance of Preparing Your Supply Chain for Winter

When entering the winter season, it’s important for businesses to prepare for the changes that come with cold weather, as well as changes in consumer behavior. By preparing your supply chain for winter challenges, you can ensure your business remains successful and can weather any storm ahead.

Here are some of the top reasons why it’s important to prepare your supply chain for winter:

  • Prevent increased overhead costs: As the season changes and temperatures drop, the ability to keep a steady supply chain is disrupted. These disruptions lead to companies needing to make additional expenditures to support their supply chain efforts, including additional labor. To minimize unexpected increases in overhead costs, companies must prepare for potential winter disruptions.
  • Keep goods secure: It’s critical to prepare your supply chain for winter to ensure you have enough warehousing space to store goods as needed. Disruptions in the supply chain can cause goods to become backed up at certain distribution points. Securing enough warehouse space can help protect your goods and keep them safe while transportation routes clear up.
  • Meet customer demands: Failing to prepare for winter supply chain challenges can lead to disruptions in customer service and maintaining customer relationships. To meet customer demands and expectations, prepare ahead of time for some of the potential challenges during the winter season.

Taking the time to plan for winter supply chain challenges will reduce impacts to your bottom line and improve customer satisfaction.

Supply Chain Challenges During Winter

To prepare for supply chain challenges during the winter season, it’s critical to be aware of the most common issues impacting businesses this time of year. The major difference between the winter supply chain and supply chain practices the rest of the year is the cold weather that causes freight transportation and delivery delays.

In addition to weather, there are other unique challenges that businesses face during the winter that can affect supply chain management. Knowing what to expect can help your business acquire the necessary resources and assistance for a successful winter supply chain.

Below are the top supply challenges during the winter.

Severe Weather

Severe Weather

The biggest threat to the supply chain during the winter is the risk of extreme weather. Though some regions face more extreme winter weather than others, cold temperatures and snowy conditions affect businesses across the country when the supply chain is nationwide.

Some of the major impacts of winter weather on supply chains include:

  • Road closures due to snow and ice that delay freight trucks
  • Extreme weather that grounds cargo planes
  • International delays in cargo flights, ground transport or sea freight due to weather in other countries
  • Power outages that affect distribution centers and warehouses

All of the above winter weather hazards can result in delays, accidents and safety risks that impact the supply chain.

Increased Holiday Demand

Another one of the challenges of the supply chain during the winter is the increased consumer demand that occurs ahead of the holidays, as well as in the months afterward. There is a general nationwide increase in demand during the holidays and an increase in demand for certain types of products that require unique warehousing and transportation needs.

It’s crucial to be aware of the type of demand your business can expect during the holiday season to plan for your increased supply chain needs. Using forecasting tools can help you predict holiday demand based on the records from previous years.

Longer Lead Times

The combination of severe winter weather and increased seasonal demand creates a ripple effect that impacts the rest of the supply chain. As a result, it’s important to anticipate winter’s impact on the supply chain timeline. Many businesses experience longer lead times during the winter, as it can take longer for trucks to turn over products to and from the warehouse and delivery points.

While it’s difficult to predict from year to year just how much winter weather and demand will impact the supply chain, you can mitigate the risk of these delays by setting the expectation of longer lead times.

Warehousing Shortages

When consumer demand increases in the lead-up to the holidays, it can create a shortage in warehouse space across the country. When companies fail to plan ahead for an increase in consumer demand, they often are left scrambling to find ways to warehouse goods strategically in anticipation of increased customer orders.

Additionally, when winter weather impacts major transport routes, warehouse turnover rates slow down, leading to a backlog of goods that would otherwise already be out for delivery. This creates a bottleneck in the supply chain that further impacts lead times and drives up supply chain costs.

Increased Transportation Costs

When winter weather impacts the supply chain, the net result is an increase in operational costs, particularly in the cost of trucking or transportation. When demand starts to exceed supply, this naturally results in an increase in the cost of all goods related to the supply chain. From fuel to labor to shipping containers, supply chain cost increases affect all areas of logistics.

Because the increased costs associated with a lagging supply chain get passed on to the customer, it’s important to prepare financially for the effects of the winter supply chain.

Tips for preparing your supply chain for winter

Tips for Preparing Your Supply Chain for Winter

Despite the challenges that winter weather and holiday demand cause for businesses and their supply chains, there are concrete steps you can take to mitigate these issues. Preventing winter weather from impacting your supply chain starts with preparation. Knowing ahead of time which issues arise during the winter and how to plan for them can determine business success.

Here are some of the top tips for preparing your supply chain for winter.

1. Monitor Weather Reports

Keeping your pulse on regional weather reports is one of the smartest ways to prepare supply chains in winter weather. By monitoring weather reports, you can be alerted to some of the weather patterns impacting key areas of your supply chain. You’ll become aware of weather issues such as extreme cold and ice that can delay truck traffic and cause collisions. You’ll also be able to anticipate any forthcoming blizzards that might interrupt the power grid.

If you rely on air cargo as part of your supply chain, then following commercial and cargo airline delays can also help you predict and react to any disruptions. As you continue to monitor the weather, adjust operations as necessary to accommodate for interruptions. This can include rescheduling workers or updating shipment tracking information.

2. Implement Time Management Practices

While you can’t do anything to change the weather or consumer demand, you can implement strategic time management practices that will help alleviate pressure from the supply chain. When shipping to regions with known patterns of inclement weather, set longer lead time expectations with customers. This allows you to buy time to explore other routes or logistics options without affecting the customer.

Because severe weather can cause closures at ports, runways and highways, it’s critical to have a flexible schedule that can incorporate other solutions that still meet customer demands. Setting realistic timelines can reduce the impact of delays and decrease the number of shipping errors.

3. Consider Freight Protection

How does cold weather affect the supply chain? Unpredictable winter weather does more than impact the ability to transport cargo. It can also impact the goods themselves. Certain types of goods may be more susceptible to damage with sudden drops in temperature. Cold and freezing weather can damage goods like precision instruments and appliances, perishable foods, chemicals and paints.

When preparing supply chains for winter, be sure to consider whether your goods are temperature-sensitive and what additional protection they may need to arrive safely. Most trailers aren’t temperature-controlled and cannot protect goods from freezing weather. Arrange to have sensitive products shipped in climate-controlled trailers for guaranteed freight protection.

4. Improve Communication

To ensure your supply chain functions properly in cold weather, businesses need to have excellent communication among their own staff, as well as with outside warehousing and logistics partners. It’s also important to maintain communication with the customer.

If extreme winter weather is anticipated, make sure each point along the supply chain is up to date with new procedures and contingency plans. Having transparent communication with your logistics partners provides you with peace of mind and more control over your operations. This allows you to update your customers in time should any shipping delays occur.

5. Create a Backup Plan

Though it’s hard to predict the impact of winter weather on supply chains, it’s still possible to prepare for potential delays by creating a contingency plan. When creating a winter weather supply chain backup plan, it’s important to know whether you will adopt alternate modes of transportation and logistics. Alternatively, you may be able to split your loads across multiple different modes of freight to minimize disruptions.

As part of your contingency plan, it’s important to budget for the possibility that you will need to switch to an alternate mode of transportation that costs more. By planning ahead, you can have the financial and logistics strategy to accommodate weather delays.

Benefits of a 3PL for Your Winter Supply Chain

For businesses to thrive, they need reliable systems and processes for streamlined order fulfillment. Efficient order fulfillment ensures businesses are able to meet their customers’ needs and continue to grow their sales. However, fulfilling orders can become increasingly more difficult to do in-house, especially during challenging winter weather when the supply chain is impacted.

Turning to a third-party logistics (3PL) provider like Crown LSP Group for help with order fulfillment can help businesses overcome winter weather supply chain issues. 3PLs provide an array of logistics and supply chain management services that support businesses in managing and moving goods to their final destination efficiently and securely.

Here are some of the ways 3PL services from Crown LSP Group can become an integral part of your winter supply chain.

Inventory Management

When you partner with a 3PL provider like Crown LSP Group, your business can rest assured that your goods will be properly managed and tracked at all times. When winter weather delays the supply chain, businesses need real-time information about the status of their goods to ensure open communication with the client.

3PL providers are able to transport your goods in safe and secure truckloads and track them at every stage using GPS technology. This ensures that businesses are always informed about the flow of goods and when shipments are delayed or on the way.

More Transportation Options

Part of winter supply chain planning is knowing what additional or alternative modes of transportation you may need to rely on when bad weather impacts logistics. 3PL partners can take on this responsibility, freeing up businesses from finding alternative transportation and logistics solutions on their own.

3PLs are experts in supply chain transportation solutions and can offer creative solutions in the event of inclement winter weather. 3PL providers at Crown LSP Group can offer LTL shipment solutions, which allow businesses to save money and maintain productive lead times.

3PL can provide additional overflow warehousing

Warehousing Overflow

If increased winter demand causes constraints on your in-house warehousing solutions, a 3PL can provide additional overflow warehousing that accommodates fluctuations in supply. Relying on a trusted 3PL for warehousing services helps businesses save time and resources, particularly with labor and management costs.

Additionally, 3PL warehouses are strategically located, ensuring your goods can be housed and shipped from a location that mitigates delays, including weather-related disruptions.

Improved Safety and Security

One of the supply chain issues that businesses face during the winter is the impact of freezing temperatures and hazardous conditions on the safety of goods. To ensure your goods are transported, stored and managed safely and securely, rely on a trusted 3PL.

Professional 3PL services from Crown LSP Group offer the integrated technology and systems to keep track of your goods and ensure their safe transportation and arrival. With warehousing services, 3PLs can provide the safety and security your goods need, including temperature-controlled storage.

Contact Crown LSP Group for Help Preparing Your Supply Chain for Winter

Preparing supply chains for winter requires advanced planning and effective logistics strategies and solutions. Knowing the common issues that impact supply chains in the winter can help you prevent logistics disruptions and delays. To keep your supply chain running smoothly in the winter, it’s important to get the help you need from a trusted 3PL partner.

Crown LSP Group is your solution for better winter supply chain management. We offer a range of transportation and logistics services to fit your supply chain needs. We have the flexibility and scalability you need to accommodate winter supply challenges. For more information on our personalized 3PL solutions, contact us today or request a quote.

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Consumer Goods and Retail Supply Chains

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Consumer Goods and Retail Supply Chains

The consumer goods and retail market has seen some new challenges in the last few years, spearheading the rapid adoption of innovative technology and new business strategies to help companies stay competitive. A particular area seeing a massive transformation is the supply chain. Consumer-packaged goods (CPG) brands and retailers alike are working to bolster their supply chains against growing risks, improve resiliency and better meet customers’ needs and expectations.

Let’s talk about some of the retail and consumer goods supply chain trends that are seeing huge success and changing the industry for the better.

Importance of Location to Customers

The location of strategic links in your supply chain is critical to your end customers, even if they do not even know where they are. While businesses employ many strategies to optimize their supply chains, locations play a critical role.

Better locations can reduce shipping and transportation costs. If you charge for shipping, your customers will appreciate the lower costs, and if you include shipping for free, you can still pass on cost savings and sell your goods for a more competitive price. Strategic locations also make it easier to get your products into customers’ hands faster.

Distribution Centers

One of the latest consumer retail distribution trends involves strategically adding more distribution centers to fulfill two-day, direct-to-consumer shipping alongside traditional retail deliveries. In physical retail, a prime distribution center location means you can restock bulk orders quickly, ensuring your goods are always in stock in your customers preferred retail locations.

In e-commerce, having a warehouse and fulfillment center in a central location allows you to speed up delivery times. Online shoppers expect their items to arrive in just a few days in today’s economy, and the expected delivery window is shrinking. In 2019, 40% of holiday shoppers indicated that they would expect their deliveries within two days, and 18% were only willing to wait for next-day delivery. Having items in stock at a nearby location allows you to meet those ever-increasing delivery speed demands and shorten last-mile delivery distances, saving both time and money.

in 2019, 40% of holiday shoppers indicated that they would expect their deliveries within two days

However, there’s one caveat for picking locations for consumer goods distribution and fulfillment. The closer you get to densely populated cities, the higher warehousing real estate costs by the square foot. A good strategy is to locate a distribution center in an area where it’s more affordable to rent space that still has excellent access to your customer base.

North Carolina represents an excellent opportunity for a CPG distribution center that offers the best of both worlds. It’s centrally located along the east coast, making for a short travel distance to the southeastern and northeastern United States alike. A distribution center in North Carolina offers easy access to an international shipping port and sits within 700 miles of 70% of the U.S.’s industrial base.

Manufacturing Facilities and Suppliers

There’s also a critical tradeoff in location for manufacturing — offshoring versus near-shoring. Offshoring lets CPGs take advantage of low production costs in emerging markets around the globe, providing higher margins even with the high costs of international shipping and trade tariffs.

However, offshoring introduces risk in the supply chain. Political unrest, natural disasters and extended shipping times can all cause disruptions in the supply chain. They make it impossible to source products from a usual supplier. Long shipping times, as is common when items ship by boat, can make it more difficult for consumer goods brands to react to new trends in their home markets.

Near-shoring some or all of your manufacturers and suppliers can be a helpful strategy in minimizing risks, shortening travel time between supply chain links and improving flexibility. If a particular product is underperforming and your company wants to pivot to another product or include gifts to boost sales, having suppliers and manufacturers closer to the point of sale lets them make this transition quickly. A company that relies only on offshore suppliers may have to wait weeks for their new products to arrive.

Having nearby suppliers is vital for customers who are looking for the next big thing and want it quickly. Further, many Americans specifically seek out U.S.-manufactured products to support local businesses.

Customer Ordering Changes — Omnichannel Capabilities

Omnichannel retail has been gaining traction for years across many product categories. Omnichannel retail refers to a company’s ability to sell its goods in all the sales channels where its customers are likely to shop. Omnichannel retail includes e-commerce through seller marketplaces, online stores, shopping apps, social media, physical retail and in-store pickup options.

The basic principle of omnichannel retail is that by being in every place where their target customers like to shop, they can earn more customers. This principle can also serve the varying needs of individual consumers. For example, sometimes they need something within the next few hours and use an in-store pickup option to ensure they can reserve the item they need and get it quickly. Other times, shoppers want to buy entirely online and avoid driving to the store — they are willing to wait a few days for shipping.

An omnichannel retail strategy also assists shoppers who use more than one channel throughout their journey. For example, 46% of consumers check inventory online before going to a store to complete their purchase. Omnichannel customers — those who use multiple channels during their shopping process — spend an average of 4% more in stores and 10% more online.

Changing customer needs amid the pandemic has only heightened the need for flexible omnichannel solutions. Sellers that had e-commerce capabilities were able to survive the slump in physical retail. And even as shoppers return to brick-and-mortar stores, the ability to sell online remains critical. Now, 60% of retailers and consumer goods companies are planning investments in new facilities that can handle e-commerce fulfillment to bolster their omnichannel capabilities.

customer ordering changes and omnichannel capabilities

Effects of Omnichannel on the Supply Chain

As it continues to rise in prominence, omnichannel retail affects supply chains in many ways. To meet the needs of online shoppers and retail partners, businesses need a flexible warehousing solution with capabilities for e-commerce and bulk order fulfillment. Selling directly to the consumer also opens up the need to accept returns and thus handle reverse logistics and returns processing.

A distribution center that fulfills e-commerce orders needs staff members dedicated to picking and packing individual orders. They must manage incoming orders across many e-commerce sales channels and prioritize everything so that customers get what they’ve ordered in a matter of days. A warehouse or distribution center that supplies goods to retail partners needs additional capabilities — practicing inventory management, coordinating transportation and scheduling various inbound and outbound trucks at their loading docks. Some facilities even handle assembly and packaging.

Because of the added complexity an omnichannel strategy places on the supply chain, it’s often helpful to work with a distribution solutions company, such as Crown LSP Group, that can handle a wide range of value-added warehousing services. Our capabilities include cross-docking, shrink-wrap bundle packing, pick and pack fulfillment, carrier selection and routing, assembly and packaging, inventory management, reverse logistics, direct customer shipping, order processing and more. With our help, your supply chain will handle everything an omnichannel strategy demands.

Stocking Issues of Quickly Changing Supply and Demand

Recent times have amplified stocking issues and shown us how quickly supply and demand can shift in the modern retail environment. Before the pandemic, many brands relied on the “just in time” inventory approach, which dictates that you should only acquire inventory as soon as you need it. This method can work great, so long as there’s always a reliable supply.

However, the pandemic sent shockwaves through the retail and consumer product goods supply chains, and we’re still experiencing the fallout. At first, many countries and states placed a hold on “non-essential” manufacturing. At the same time, individual factories got hit with safety constraints such as fewer staff members on-site or even temporary shutdowns due to outbreaks of illnesses among workers.

Thus, suppliers were stretched to their limits and still feel the ramifications today. As the pandemic and other global events progressed, we’ve seen surprise shortages affect consumer goods across various sectors. Some of the widespread product shortages we’ve seen as of May 2021 include:

  • Computer chips, which were in short supply before the pandemic and are now facing additional supply chain challenges.
  • Plastics and palm oil used in many plastic products.
  • Lumber, with exacerbated shortages due to coronavirus-related shutdowns and a housing shortage.
  • Furniture, a product typically manufactured offshore and that now involves months-long delivery estimates.
  • Chicken, bacon and hotdogs, stemming in part from outbreaks at meat-processing facilities.
  • Imported foods such as olive oil, coffee and cheese.
  • Shipping containers, placing additional constraints on practically every supply chain.

Besides restricted supply, another constraint was the sudden boom in demand. Stay-at-home orders revolutionized consumer behavior trends, causing massive waves of pantry-stocking and a sudden increase in sales for products that could entertain people staying at home. Consumer-packaged goods sales jumped 9.4% in 2020, and many surprising product categories enjoyed a sudden spike in consumer demand, such as:

  • Hair dye
  • Webcams and radios
  • Baking yeast
  • Pet food, treats and supplies
  • Sporting goods
  • Musical instruments
  • Gardening equipment
  • Books

Despite the increased unpredictability, retailers are holding higher expectations for consumer goods brands. For example, in 2020, Walmart upped its on-time, in-full (OTIF) demands. Now, its suppliers must achieve a 98% OTIF delivery rate, a steep increase from the prior 70% requirement. CPG supply chains must adapt to catch up.

Solutions for Supply and Demand Challenges

Consumer goods brands now realize that just-in-time logistics introduces too much risk into the supply chain. When a sudden spike in demand or supply shortfall strikes, they must have enough inventory to compensate. It must be somewhere close to their retail partners so they can restock store shelves on a tight deadline and close to their consumers so they can continue selling online. Meanwhile, they must avoid the weeks-long delivery times of reordering overseas. As such, consumer goods companies are increasing their safety stock levels across the board.

Even with adequate safety stock, the current marketplace remains unpredictable, which underscores the usefulness of flexible warehousing space. Just as quickly as demand spikes, a product can fall out of consumer favor. Likewise, demand can rise and decline with the time of year. Thus, many brands need extra warehouse space during high demand and do not need it when consumer interest falls again. If such a company owned its warehouse, it might have extra space that goes to waste when sales are low.

With customized warehousing services from a partner like Crown LSP Group, your business can rent out the space they need for excess safety stock, whether it’s to cover a temporary demand spike or a long-term solution. Renting warehouse space is more cost-effective for most businesses, as they can find the space they need for the amount of time they need. Building a warehouse is an expense that may not see a return on investment for as long as 30 years.

supply chain digital innovations

Digital Innovations

The modern supply chain is digital. Newer, more advanced technology can drive supply chain innovation in everything from inventory and warehouse management to supplier networks and speed-to-market.

Advanced analytics and artificial intelligence can make predictions and suggest courses of action based on microscopic changes in the market and logistics environment. This technology can predict future inventory needs, times when a supplier is at risk of becoming a liability or times when warehouse and assembly machinery needs servicing. Software-based consumer goods supply chain management can assist in scheduling operations to enable advanced processes such as cross-docking, efficient returns processing and digital inventory management. Transportation management systems can facilitate route and carrier selection to optimize transportation costs and reduce travel times.

Some of the top digital retail supply chain trends driving efficiency and innovation include:

Predictive Planning and Demand Forecasting

One of the most promising new technologies for the supply chain is predictive planning and forecasting tools. An impressive 56% of consumer goods and retail companies are planning investments in this technology. This software uses analytics, artificial intelligence and machine learning to increase supply chain visibility, uncover bottlenecks within the supply network and find new channels to address these shortfalls. They can also use data from many sources to predict changes in demand, allowing logistics managers to optimize inventory levels and plan reordering of schedules.

The Internet of Things (IoT)

In manufacturing, warehousing and other aspects of the supply chain, the IoT is a transformative technology. Sensors and IoT devices now let various machinery and equipment integrate and share data. One application of this in retail is that vending machines can have sensors that tell bottling plants about future restocking needs and indicate when it needs maintenance.

3D Printing

3D printing improves the supply chain by allowing companies to produce runs as small as a single product, made-to-order. It enables manufacturing to take place closer to the end customer and gives the customer options for customization. It also lets consumer goods companies produce both prototypes and finished products quickly, shortening the speed-to-market. By producing on-demand, companies can save on warehousing space for custom products and shorten supply chains.

Augmented and Virtual Reality

Besides the various product shortages affecting supply chains, the supply chain has also faced a labor shortage since before the pandemic. The manufacturing skills gap will likely leave 2.1 million jobs vacant by 2030. Labor shortages are also affecting warehousing and transportation jobs.

Augmented and virtual reality offer ways to close the gap by facilitating training modules, simulating complex, real-world scenarios in safe, virtual settings to close the skills gap. They can also allow managers, consultants and specialists to virtually visit a plant and offer their insights while working from home. This ability allows the logistics industry to offer an in-demand perk to jobs traditionally requiring a physical presence. Augmented-reality glasses can also let workers see real-time data about the plant and equipment.

Find Success in Your Supply Chain With Crown LSP Group

Keeping up with the latest supply chain trends is easy when you have a logistics partner you can trust. Let Crown LSP Group take on your toughest warehousing and transportation challenges. We’re a third-party logistics provider who can handle your transportation and warehousing needs in North Carolina. We personalize all our solutions to our customers’ unique needs and offer the flexibility, scalability and value-added services you need to stay competitive, no matter what supply chain challenges come your way.

Contact Crown LSP Group to discuss your needs and learn how we’ll build a custom logistics solution for you.

find success in your supply chain with crown lsp group

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