E-commerce changing warehousing and fulfillment solutions

The issue is explored in greater detail in a paper written by Cathy Roberson, of the London-based think tank, Transport Intelligence.

By ·

The warehousing and fulfillment markets are undergoing significant changes as companies incorporate e-commerce into their overall strategy.

Decisions such as physical locations of warehousing and whether to fulfill e-commerce orders from separate facilities, in-store, from existing warehouses or a combination of all three are among the strategic decisions brick and mortar companies are facing as they compete against the likes of Amazon, eBay and Newegg.

While much of this change differs from one company to the next, speed to fulfill and options in the final delivery location are similar for most companies. Not only that, but the need for visibility over the entire process is in demand as companies’ supply chains are further complicated.

The issue is explored in greater detail in a paper written by Cathy Roberson, of the London-based think tank, Transport Intelligence.

The higher volume of e-commerce orders is affecting this need for speed to fulfill; with the layout of warehouses of great importance. For some companies, the use of high-bay racking, product placement and an effective alignment of rack storage are necessary. Also, there is an increasing use of automation within such facilities. The use of robotics is also on the increase, as noted by the acquisition of Kiva Systems by Amazon. The acquisition was questioned by some, but physical order fulfillment reportedly costs the company nearly 9% of its global revenues, thus, reducing this cost will likely improve Amazon’s profits.

Managing the delivery process is also an increasingly difficult task as delivery locations from warehousing/fulfillment centers are no longer confined to physical stores. Now, these facilities are shipping either directly to the customer, a neutral site (such as a lockbox location, FedEx/UPS store or other retailer) or to the physical store for pickup.

As such, IT companies such as High Jump, Red Prairie, Oracle and others have expanded their traditional warehouse management systems (WMS), transportation management systems (TMS) and other IT solutions to meet this need for flexibility, for not only changing transportation needs, but also for order/inventory management and visibility.

As IT providers offer more innovative solutions for brick and mortar companies to compete with dotcoms, inventive startups are springing up. For example, Shipwire offers global order fulfillment capabilities and warehouse network via its cloud logistics network. According to the company, customers are able to outsource their entire global fulfillment, warehousing and shipping needs to Shipwire. Although not a startup, but just as inventive, Amazon also offers fulfillment services for customers. The company’s ‘Fulfillment by Amazon’ service ships goods from its own warehouses on behalf of its marketplace sellers.

E-commerce has spurred, not only new concepts and ideas within the supply chain, but also new companies are popping up to address logistical challenges resulting from the rise of e-commerce.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Improving Packaging: The Cost of Shipping Air is Going Up
Retailers and manufacturers that insist on using inefficient and sloppy packaging methods—oversized boxes, inefficient packaging, poorly constructed palletized contents—are paying for their mistakes in sharply higher freight rates. Pitt Ohio White Paper, Logistics White Paper, Dimensional Packaging
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo