3 Trends Changing in the Logistics Industry

Toy Fulfillment:  Supply Chain Strategies

As things change, at some point in time there are trends that help us forecast how point A will lead to point B.  In football, critical head and neck injuries have led to a drastic change in how the game is played.  This major transition in the game didn’t happen overnight, or even over a handful of seasons.  As players’ began suffering these injuries, more tests were performed, followed by curtailing the plays that led to these injuries.  Over a span of 10 years, trends emerged that led to new ways of coaching and a shift in the style of play.  Much like the game of football, the fulfillment and distribution industry is adapting to a changing landscape based on trends that simply cannot be ignored.  

Here are three trends that are directly impacting the warehousing and distribution industry.

1.) The Rise of E-Commerce:  With the variety of ways that consumers now shop for and purchase products, largely through the emergence of e-commerce platforms, the amount of customization and the number of items available has skyrocketed.  As a result, the number of stock-keeping units has also increased.  In addition to this increase in SKU’s, which can become overwhelming for traditional fulfillment methods, there are also a growing number of shipping sizes and options.  This additional complexity has made it imperative to choose a 3PL experienced in every channel.  (For more information about omni-channel distribution, check out our blog, “Service Providers Must Step Up to Facilitate & Scale Omnichannel Retailers.” )

2.) Visibility:  It is easy for the average person to assume that everything in a traditional warehouse is barcoded and tracked.  However, in 2013, fewer than 66% of products passing through a distribution center were barcoded.  That number is expected to grow to 83% over the next four years.  Between a proliferation of barcodes and the expansion of radio-frequency (RF) technology, supply chain visibility is being leveraged more heavily as a way to reduce costs and increase accuracy.   

3.) Pick & Fill Expenses:  More products than ever are moving through warehouses and consumers expect the delivery process to be flawless.  To meet these expectations, it is natural for the cost of picking and filling orders to increase as a result.  A survey by Motorola found that picking activities can contribute up to 70% a DC’s operating cost.  The logistics industry has to react to this trend immediately to curtail the effects down the supply chain.

Barrett Distribution Centers leverages experience, expertise and technology to create customized supply chain solutions.