How To Make The Each Supply Chain Efficient
By Jim Tompkins
CEO Tompkins International & MonarchFx
NextGen Retail Supply chain, is it inefficient, difficult, and expensive?
If we continue to have distribution centers and fulfillment centers with mechanization to support manual each picking (typically pick modules, put walls, and shipping sorters or alternatively Kiva Systems), we will find ourselves with inefficient, difficult, and expensive each supply chains. This answer however is not acceptable. In fact, it was this answer that drove the thought leadership of Tompkins International to the creation, evolution, patenting, and creation of Tompkins Robotics. The each supply chain can efficiently, easily, and inexpensively support Direct To Consumer, Buy Online Pick Up In-Store, Buy In-Store, Pick Up In-Store, and Replenish Store through the installation of the Tompkins Robotics’ t-Sort system.
Can brands or retailers “Do It Alone” in pursuing eCommerce supply chain excellence?
This question has three answers for the three components of the eCommerce supply chain:
- Bulk Transportation and Four Walls
- Each Four Walls
- Each Transportation
- Bulk: Any unit load larger than an each. This could be a container, pallet, or case.
- Four Walls: The receiving, storing, picking, packaging, and shipping processes that occur within the four walls of a Distribution Center (DC), Fulfillment Center (FC), Returns Center (RC), and/or Liquidation Center (LC).
- Transportation: Any movement outside of the four walls within the supply chain.
- Bulk Transportation: Any movement outside of the four walls of containers, pallets, or cases within the supply chain.
- Bulk Four Walls: The receiving, storing, picking, packaging, and shipping in a DC/FC/RC/LC of containers, pallets, or cases.
- Each Four Walls: The receiving, storing, picking, packaging, and shipping in a DC/FC/RC/LC of eaches.
- Each Transportation: Any movement outside the four walls of eaches.
The answers are:
- Yes, the brand or retailer can “Do It Alone” for bulk transportation and four walls. This is done all the time with the brands and retailers handling the transportation and four walls for the flow of containers, pallets, and cases. Doing all or some of this supply chain would be normal.
- No, the brand or retailer cannot “Do It Alone” for each transportation. It would be unusual for a brand or retailer to handle their own each transportation. The key here is the density of delivery and obviously UPS, FedEx, USPS, and many other smaller parcel delivery firms like, Postmates, DeliveryCircle, Deliv, OnTrac, LaserShift, etc. are firmly positioned as the “Go To” providers. Due to their huge volume Amazon in the U.S. and Alibaba and Jd.com in China are exceptions to this rule.
- Yes and No, the brand or retailer can “Do It Alone” for each four walls. The answer to the each four walls topic will most often be a hybrid answer. Typically, there are locations where an organization will do their own each four walls (FC where a significant investment was made, repurposed DC) and there are locations where an outside organization should be utilized, like Fulfilment by Amazon (FBA), Cainiao (Alibaba), or MonarchFx. The FBA, Cainiao, and MonarchFx solutions are all distributed logistics solutions where the brand or retailer retains an external logistics provider to cover a geographical location closer to the customers. This allows for quick and inexpensive delivery, as the distance from the location to the customer is short. Then by combining several brands and/or retailers in the shared distributed FC, the economies of scale come into play for justifying automation and performing the final mile delivery.
- Video: Tompkins Robotics
- White Paper: Achieving Revenue Gains from Distributed Logistics