There was plenty of excitement in the country last week. We now know that Atlanta and New England will meet in Super Bowl LI, and Amazon was awarded yet another patent, this time for a network that will manage a unique aspect of autonomous cars and trucks – how to navigate reversible lanes. Donald Trump was inaugurated as our 45th president, and some of us (including me) learned a new word – “dystopian”. This was the adjective that most political pundits used to describe the inaugural address. While I wasn’t exactly sure what dystopian meant, it didn’t sound good. So I looked it up and found that dystopia is “a community or society that is undesirable or frightening.”
I will not comment further on that, but it did occur to me that Amazon may be creating somewhat of a dystopia in the retail supply chain. There is little doubt that Amazon has created a climate in which customers have come to expect same day or next day deliveries, and this has left many competitors trying to function at the same level. Well over 100 Amazon distribution centers have been established to shorten the “last mile”, an effort that not many firms can duplicate. Some retailers have decided to use stores for distribution centers, but that is not always practical. With the advent of “just in time” inventory management techniques, many retail stores virtually eliminated “back rooms” in which to assemble and organize outgoing orders.
What then must a small or medium sized retailer do to stay in the game? I believe the answer lies with the hundreds of logistics service providers (LSP) that reside in almost any medium to large size city in the U.S. This network, in most instances, is ready, willing, and able to provide that last-mile, rapid delivery that the marketplace has come to expect. In today’s environment, service to the customer is paramount, and an LSP that does not provide excellent service to its clients is probably on the way out. Most however, will be able to expand their customer service attitudes and practices to retail customers.
Most LSP’s are able to provide service for multiple clients, offering opportunities to consolidate shipments, an option that does not exist in a single tenant facility. This will increase operating efficiency, reduce freight costs, and afford a significant convenience to the final customer.
Using an LSP will provide flexible space which can be expanded or contracted, depending on need. This will be particularly important during the peak retail seasons.
The labor forces of LSPs usually are very customer focused. They are professional warehouse specialists who spend their work days shipping error-free, on-time orders, not retail clerks who might be pressed into service in a retail back room.
Finally, as most supply chain managers know, the glue that holds all this together is technology, and the successful, sophisticated LSP will employ the latest in efficient warehouse management and order processing systems.
While dystopia is a word that some of us can now add to our vocabulary, it need not apply to the supply chain community.