The time required to run a warehouse, scale-up distribution operations, leverage the right technology, and manage the end-to-end supply chain operations would be much better spent running, growing, and scaling up the business.

February 9, 2020 · By Logistics Management   Facing Pressure from Every Direction

Companies that ship products are confronting challenges that range from higher shipment volumes to smaller orders to constantly-changing customer demands.

Driven by the booming e-commerce sector and the omnichannel distribution trend, these and other obstacles are pushing companies to find the right combination of capabilities, speed, accountability, and accuracy in their warehouse and distribution operations.

Knowing that this perfect combination can be hard to establish and orchestrate internally, more companies are turning to third-party experts to manage the labor, logistics, and technology that make their warehouse and distribution operations tick.

Doing so leaves the manufacturer, distributor, or retailer to focus on what it does best: run and grow its core business without the burden, expense, and risk associated with today’s high-pressure distribution environment.

Robbing Your Core Business of Resources

Consider this: the company that decides to operate its own warehouse, distribution, and logistics environment - and then staff it up and equip it with technology - winds up robbing its core business of resources.

The time required to run a warehouse, scale-up distribution operations, leverage the right technology, and manage the end-to-end supply chain operations would be much better spent running, growing, and scaling up the business.

According to Joe Tague, senior manager of business applications for Canon Business Process Services, the tight labor market is making it especially difficult for companies to scale up their warehouse and distribution operations.

“Finding the skilled warehouse worker who will stay in place, and not move jobs for 25 cents more per-hour, is getting more and more difficult.”

That level of labor instability can impact the entire distribution operation, particularly when companies put time and effort into recruiting, hiring, and training those individuals - only to see them walk out the door within a few weeks (or less).

“It’s just a revolving door of people right now,” says Tague, “and that’s taking a toll on companies’ resources, assets, and bottom lines.”

Thinking Beyond Labor

Jeremy Wisdom, one of Canon’s logistics, operations, and supply chain consultants/solutions analysts, says the way supply chain, warehousing, and distribution have been historically “back-burnered” in favor of other services makes it difficult for companies to get their fulfillment operations up to speed quickly and efficiently.

“It’s not, nor has it ever been, the typical manufacturer’s core service,” Wisdom points out. “They’re focused on making, marketing, and selling products, and basically just figure out how to store and ship them later.” 

As a result, the supply chain as a whole hasn’t been given the same level of importance as, say, manufacturing or customer service.

That’s changing, says Wisdom, who for the last 10 years has seen more companies investing in supply chain management and optimization tools.

Even with these tools at their avail, logistics managers have had to sharpen their pencils and come up with new ways to manage inventory (i.e., figuring out what needs to be manufactured in order to meet customer demand), optimize their physical operations, and get products out the door faster (and in smaller quantities). 

“Ensuring that you have the adequate amount of inventory and safety stock on hand that mirrors your production schedule is a huge challenge for warehouse managers right now,” says Wisdom, “along with keeping up with the sales commitment to get the product distributed after it’s manufactured - getting that product out when it needs to get out.” 

Factoring in the Entire Supply Chain Cycle

Wisdom says the many different elements that come into play during the fulfillment and distribution process aren’t getting any easier to manage internally.

“There are so many different key components to manage from a warehousing perspective,” says Wisdom, who points to inventory management, optimized order picking, and transportation selection - while adhering to expected service levels - as just some of the key demands. “Handling all of this in-house has become a real burden for companies across all industries.”

In the report, "Making the Case for an Integrated Warehousing & Distribution Solution" we explore the key issues that companies are dealing with in this e-commerce/digital fulfillment environment; explain how companies can relieve themselves of this burden with an integrated warehousing and distribution solution, and spotlight how outsourcing these non-core activities pays off in many different ways for a variety of stakeholders, including:

• Start Solving Your Key Distribution Pain Points Today

• The Perfect Combination

• What Goes Into A Holistic, Integrated Solution?