These are the focal points within the decentral fulfilment
Many retailers have seen their store merchandise turnover plummet over the past few months. Yet simultaneously, they received an enormous increase in online orders. The central distribution centres are barely able to cope with fulfilment whereas the actual stores hardly attract any customers. More and more retailers are now choosing to double their stores as order picking locations. Are you considering choosing for decentralised logistics; directly from your store’s stock rooms? In this article, we list the most important focal points and tips for you.
More and more retailers choose for a decentral fulfilment
After HEMA, Scapino has now started using its physical stores as mini-distribution centres for online orders. The Corona-crisis has sped up an implementation of pre-existing plans. Scapino has been preparing its IT-environment for decentralised logistics services since last year. And before that, HEMA decided to restructure 20 shops as order picking locations. In addition, HEMA started using an extra ecommerce distribution centre to meet the online demands. Both chains took their time; An efficient implementation of decentralisation takes a lot more than meets the eye.
The biggest challenge will be stock control
Consumer behaviour tends to be rather whimsical, especially when this behaviour is analysed per store. And what to think about products that have become hugely in demand over night? The Corona Crisis perfectly showed how a demand for a certain product can explode from one day into the next. Think about disinfecting hand gels, face masks, garden equipment or toilet paper for instance. Particularly the last one has raised an eyebrow. There has never been any shortage for toilet paper in the warehouses, yet stores struggled to keep their shelves well stocked. How can you make sure that locally, there is enough stock to deliver on time? And preferably, without having to spend too much money on your stock of course. The re-stocking poses an interesting logistic challenge in itself. The order units become smaller so you will be facing the shipment of mixed goods more often.
Decentral logistics often damages uniformity
An uncontrolled growth in packagings is something you must prevent at all cost. It would be disastrous if every shop started packaging orders their own way and kept a large range of packagings in stock just to be sure. Not only does it take up a lot of storage space, it is also shows on your brand experience. A uniform appearance of the utmost importance when building a brand. And that first impression starts at delivery.
It is more prone to errors
In practise, the probability of errors increases in decentral logistics. Not only in the last mile, with more stops, ever changing addresses and mixed goods, but also in order picking. Do not underestimate the fact that the stores need to be structured and kitted out for the logistic process. Clear packaging instructions at all locations will help to prevent mistakes and unnecessary damages.
The delicate balance between efficiency and reliability
Have you completely outsourced the delivery? Or are you planning to take it up yourself? And how will you structure delivery? You need to start thinking as a pizza courier and set up the exact order consolidation moments for delivery. Will you deliver an order directly, just one at the time? Or will you be waiting a while until you are ready to combine several orders to the same area? What is the optimum? Ideally, you would love to simultaneously deliver as many orders as you can, as fast as you can. The delivery units are small, the number of stops are big and every day you face different delivery addresses with different products.
Do not forget to restructure the return flow
It is important to give thought to the returns flow beforehand. Would you like to process returns at a central or decentral location? A decentralised handling will be an added burden to your staff in store. They have to find out what went wrong and deliver the right product. It can be arranged from a central location like you used to, although that would infer extra transport costs as the wrongly delivered goods need to be shipped to a local warehouse again.
Make environmental-friendly packaging decisions
Decentral logistics will offer you the chance to work more environmental-friendly. Coolblue for instance, now delivers by cargo bike and chooses paper bags as packaging. It takes up a lot less space than cardboard boxes so more orders can be loaded onto one cargo bike and delivered in one trip. The delivery man simply places the order on your door step and the sturdy paper bag can also potentially be used to pick up returns. This way of working can easily be applied to traditional motorised delivery rather than a cargo bike as well. The paper bags can be collected and stored in a sustainable crate. Your delivery rounds can be planned more efficiently and you will need less packaging material.
FPC would be happy to help with your decentralisation
In order to make your decentralisation a success, aspects like insight, a uniform process and real- time predictability are a necessity. Faes Packaging Concepts are able to assist with an analysis and improvement of the packaging process in your supply chain. In addition, we offer software-solutions for packaging, loading and shipping with StackAssist, a software tool that enables you to generate a sophisticated logistic concept. Are you interested to find out what we can do for your organisation? Would you like to know more about StackAssist and our way of working? Bart van Dijck can tell you all you need to know.