Subscribe to our free, weekly email newsletter!

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 Patrick Burnson, Executive Editor
October 29, 2012

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 .(JavaScript must be enabled to view this email address).

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!

Recent Entries

Kurt Nagle, president and CEO of the American Association of Port Authorities recently voiced his endorsement of this trade legislation

While many auto executives expect more industry recalls in 2015 and 2016, just 8 percent use advanced predictive analytics to help prevent, prepare for, and manage recalls, according to a recent online poll from Deloitte.

Purolator white paper highlights common Canadian shipping mistakes. From failing to appreciate the complexity of the customs clearance process to not realizing that Canada recognizes both French and English as its official languages, U.S. businesses frequently misjudge the complexity of shipping to the Canadian market. This often results in mistakes - mistakes that can come with hefty penalties and border clearance delays, and that can result in lingering negative perceptions among Canadian consumers.

At a certain point, it seems like the ongoing truck driver shortage cannot get any worse, right? Well, think again, because of myriad reasons we could well be in the very early innings of a game that is, and continues, to be hard to watch. That was made clear in a report issued by the American Trucking Associations (ATA), entitled “Truck Driver Analysis 2015.”

Coming off of 2014, which in many ways is viewed as a banner year for freight, it appears that some tailwinds have firmly kicked in, as 2015 enters its official homestretch, according to Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report at last week’s CSCMP Annual Conference in San Diego. The SOL report is sponsored by Penske Logistics.

Article Topics

News · Supply Chain · Logistics · Transportation · All topics


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA