You might think that highly customized supply chains only apply to large eCommerce chains. The common wisdom says they're expensive to create and deal with a large threshold of transportation. In reality, small-to-medium-sized shipping operations can learn a lot from the way a custom supply chain is implemented to create a smoother transportation process.
How a Single Online Retailer Changed the Market
In the eCommerce world, where customers want their products delivered directly to their door without hassle, there was one company that shook up supply chain logistics as we knew it.
You guessed it: Amazon. The online retail giant heard the outcry of demand paired with an internal lack of control of their own deliveries.
At that moment, Amazon began exploring outside last-mile delivery services to partner with. This made it possible for a third-party logistics (3PL) provider to handle the deliveries of individual packages, saving Amazon time in management and overall cost. Tapping into the expertise of a 3PL with an understanding of a local logistics chain maintained the efficiency of deliveries and ensured that the packages were delivered much faster.
As always with competition, as soon as someone starts changing the game, others are soon to follow. Walmart recently announced that they will be using their stores as launch pads for delivery drones and departure locations for last-mile deliveries, especially perishables like food. Using their existing stores as fulfillment centers opens the door for their supply chain to cut down on fulfillment costs.
Though Walmart only has 7% of the U.S. online market compared to Amazon’s 39.7%, this move is reflecting some critical thinking. Retailers are starting to rethink their supply chain logistics and use what they have—including 3PL support—to optimize them for a stronger customer experience.
What can we learn?
You may be wondering what all of this means for you. You’re likely not the country’s largest eCommerce retailer, and last-mile fulfillment may not be "Amazon complex" for your products. Is investing in expensive drones or an entire fleet really the right move? Perhaps not. But there are lessons that can be learned from these giants' moves.
In both scenarios, custom tailoring solutions to fit your specific transportation needs have proven to save both on time and cost. Let’s take a look at some of the benefits of building out a custom-tailored solution below.
Smooth unsynchronized operations
With so many handoffs, there is a lot that can go wrong during the shipping process. Between carriers, suppliers, and fulfillment center operators, it can be easy for pieces of information to get lost in the shuffle of too many carriers and routes. This lack of visibility can work against your performance.
When you customize your supply chain network for maximum efficiency, you get a totally different result. The most important and heaviest-volume lanes become the ones with best control and visibility.
Sustainable and Consolidated Transportation
Sending out a fleet of trucks will have a large impact on the environment, especially if that fleet isn’t going directly to your supply chain route. While sustainability has been on everyone’s minds, it also doesn’t help that gas prices are on the rise.
Instead of sending out multiple trucks to gather shipments as they are ordered, consider taking a look at your analytics to consolidate the orders. This will save time for your carriers and cut down on your cost of gas. Consolidating your shipments helps both your operation’s bottom line and your commitment to improving the environment.
Eliminated inconsistent carrier performance
When you pick and choose your carriers solely based on who is the lowest-cost provider for a given lane, you may not get the best results every time. Request for Proposals (RFPs) are a long process and can lead you to juggle multiple suppliers. Multiple suppliers also mean multiple schedules to juggle and work around.
When you create a custom-tailored transportation network, you optimize based on your own schedule and priorities. With third-party logistics, you can create a network that has fewer suppliers to manage, putting the power back in your schedule.
Go Beyond third-Party Logistics with Morgan
With over 30 years of experience in creating customized supply chains, Morgan has honed in on expertise in custom-tailored solutions. Our experts use an analytical approach to your network, finding unique ways for you to optimize the supply chain that works best for your business. Reach out to our team to learn more about Morgan’s unique approach to third-party logistics.
