Retail CIO Outlook Weekly Brief
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E-commerce industry is growing at a fast pace resulting in greater demand for logistics. The industry has set up the demand of one-day to two-day delivery for customers, which has made the logistics more complex and challenging. To achieve the delivery goals a major shift has been observed towards air cargo but it’s not sufficient enough as the industry requires an increase in the number of distribution centers as well. With the introduction of new product lines and demand in remote areas the need to improvise the supply chain has elevated.
Developing industrial logistics and distribution centers is not easy especially when regulation barriers are high and the expenditure on infrastructure is huge. Also, another factor pulling back air cargo logistics is that it holds only a small fraction of total supply chain costs because of increased cost transportation and labor resulting in costlier service. In today’s era, customers demand better services at lower costs and to achieve the same manufacturers are getting directly involved in retail distribution, blurring the paths between industrial and retail logistics.
Industrial logistics need to leverage air cargo more than ever to improvise supply chain speed and customer satisfaction. Greater use of air cargo would also result in lowering of labor cost and transportation as cargo companies would come up with cheaper packages. Localization of products and warehouse will also benefit e-commerce logistics as they would be able to meet customer demands, for this they will require to incorporate technology and data analytics. Analyzing the customer needs and demand of particular products in a certain region would actually help in saving cost and time and also will enhance warehouse space management. Utilizing technology to understand and fix specific delivery charges for each product depending upon various verticals would actually enhance customer service and also eliminate over expenditures in logistics.
Renting a warehouse can also be an effective measure as it saves time and efforts in building up a new one. Rented warehouses can easily be changed depending upon the supply chain requirements. To achieve long-term success coordination among manufacturers, E-commerce platforms and logistics partner is essential with proper planning to deploy a profitable supply chain.
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