Archives for September 2017

Delivering Drones? More Subscription Boxes? 4 Things to Expect in Shipping and Fulfillment in Upcoming Years

By Contributing Author | 09/29/2017 | 4:13 PM

By Jake Rheude, Red Stag Fulfillment

We just ordered a crystal ball to look into the future of fulfillment, and our handy little app told us it should be here by now, but it’s out on some truck, on some road, at some other point in its journey.

Not knowing exactly where and only finding out about issues after the fact is the current state of affairs. However, it probably won’t stay that way long. The true future of shipping is the future of information and sharing data in real-time in innovative ways.

Here is a look at four trends we think will be huge in near future, changing the way we do business and satisfy customers. At their core, each involves data used to make selections, run systems, track devices like drones, and make every element of business more transparent.

Automation Before All Else

If we started with anything besides automation, you probably would stop reading. Every logistics, supply chain, and DC professional knows that the robots are coming to change our jobs. The biggest difference for the future is that we expect it to take on an exponential growth feeling.

Fulfillment is already embracing automation in warehouses, route optimization, how containers and pallets are loaded, and much more. It’s going to push to become better at every aspect, cutting time and cost while maintaining reliability.

One of “the next big things” will likely involve automation of supply chain management concerns, especially returns. Overall, still about one-third of ecommerce items are returned. That process still has a lot of manual components, especially for the consumer and the warehouse.

It’ll be especially interesting to see what advances come in the realm of automating the processes used to verify returns and check for product defects. If someone develops that machine, they’ll have a home in nearly every major e-commerce hub.

Automation is also going to be key to what happens with products. We think that more subscriptions to get rid of random inventory and kiting to make use of refillable items will be big, but what’s in those items and what is tested will likely be driven by analytics and marketing automation that tracks customer preferences.

For companies looking to move products in an innovative way, automation is going to be a significant cost driven and reduction technique, with varying levels of business intelligence and final decision-making power.

Airships and Ocean Beds

Patents often show us what’s coming next and, if you take the latest round seriously, it means the sky and the ocean are our next delivery mechanisms, just not in ways that we typically see.

Drones have a relatively small delivery area, especially as the things they carry get heavier or vary greater in dimensions. So, to bolster drone delivery, Amazon and Walmart are looking at making the warehouse float with the drones in the form of an airship warehouse.

Walmart is taking the lead on this new arena with a recent patent on a system that will track drones as they move to and from the airship warehouse and delivery points, with ground stations supplying some assistance.

Amazon already holds a patent for a flying warehouse and both retailers are said to be considering methods of control via on-site or remote teams. We’re likely to see some dueling warehouses in the skies because Walmart’s patents focus significantly on operation and logistics, which gives them a better chance of being granted as well.

On the other end of the spectrum is a patent from Amazon that relies on the ocean and acoustic tones to make a delivery. The “aquatic fulfillment center” would move waterproof goods through a rather complex system that could make use of our sky-warehouses because it supports re-stocking via parachute drops into the ocean.

These are a bit of fun, and there’s a good chance that’s all they’ll be in the near future. Air deliveries are going to face significant regulation, especially if drones are making deliveries to homes instead of static lockers or stores (more on those later).

Companies like Amazon and Walmart typically hold onto a variety of patents they don’t use or can’t currently implement. It sparks some innovation and a little enjoyment, but may also be a way to try and stop competitors.

Figuring out the logistics of floating or sunken warehouses will be difficult and costly, as will the technology and technicians to keep it all running, so, for now, this is half question mark and half remarkable story to share online and make everyone think a company is innovative.

What’s Old Is New Again

One big trend that is more likely to be real — though it will play a role in those two interesting warehouse options — is a return to shipping and fulfillment that doesn’t go right to the customer.

Amazon has been at it with lockers. And, many years ago we had to order clothes that weren’t in our size or furniture that would then be delivered to the store for us to pick up. Now, we’re doing this via app instead of over the phone or in person.

Consumers want their orders ASAP and are discovering many options that will allow them to get same-day “delivery” when they go into a store and pick it up. The main difference here is the time shift. We’re now shopping on our own time (or our employer’s) and then picking up when it’s convenient for us.

In cases where the store had a traditional brick-and-mortar location, there isn’t any real shift of inventory or logistics yet. People are shown what’s currently in stock and these orders are treated as a direct purchase, which can often integrate with existing point-of-sale systems. In essence, it’s just another channel for a sale with minimal adjustments.

Jumping back to the locker concept, this is expected to grow to more retailers and distribution pick-up points. Some conversations have even included the possibility of co-located points because it would be easier for drop shippers as well as larger brands to manage together.

We’ve come full circle to the local post office, holding your package for you until you come and pick it up. The significant difference here is that you get a digital slip letting you know things are ready, instead of a note on your door or in your mailbox.

Retailers have found that customers tend to care most about speed and there’s not always the need to look for a brand-new model if you can hasten an old one. That’s the data play here: analyze and focus on what matters most for your investment.

The New Fulfillment Heartbeat: Visibility

On the supply chain side of things, there is one major shift to pay attention to: visibility.

Vendors now provide greater levels and their customers demand it. We’ll see it play out in a variety of ways with systems that track and share information. The one piece of this that we’re excited to see comes in the form of everyone’s favorite buzzword: blockchain.

In the logistics space, blockchains are going to be more about the ledger capabilities and less about cryptocurrencies. At its core, a blockchain could create an immutable record of goods, tracking them and who has access to them, from the point of manufacturing all the way through vendor purchase, movement, warehousing, customer sales, distribution, and final delivery.

The current status of the items can be altered as it moves, but there is a core layer in blockchain that cannot. It provides a clear audit trail to quickly root out potential causes of damage, loss, or theft. Depending on the item, you can also track important data like temperature of the reefer truck and keep this as part of the permanent record.

Customers drove visibility by demanding that we can know where our package is right at this very moment. Industry is making it their own by using it to be better partners and, in the near future, to reduce the risks they face with each order.



Jake Rheude is the Director of Business Development for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About One-Off Sound-Off

Welcome to "One-Off Sound-Off," a blog page devoted to guest commentary on all things supply chain. This is a space where industry leaders can share their opinions and expertise with the logistics and supply chain community. If you have an article or commentary you'd like to share, please consider sending a guest blog proposal to feedback@dcvelocity.com.


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