Warehousing and Fulfillment Solutions Are Changing Due to E-commerce

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!

Article Topics

All Topics
Latest Whitepaper
The Retailer’s Atlas for Omnichannel Returns
Fueled by e-commerce, the new state of retail is truly an omnichannel one, and companies will flourish or flounder based on how well their supply chain can meet customer expectations.
Download Today!
From the November 2017 Logistics Management Magazine Issue
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships into true, collaborative partnerships—and greatly strengthened its logistics and supply chain operations in the process.
34th Annual Quest for Quality Awards: 2017 Awards Dinner
Trucking Regulations: Washington U-Turns; States put hammer down
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Logistics Showcase: Rising to the same-day delivery challenge
Today’s delivery puzzles are very different than traditional DC to store or warehouse to DC puzzles. It’s not just the shorter time frame for delivery; the basic requirements are significantly different and more complex as well. In this session you'll learn how to address same day delivery challenges while also driving down costs and increasing customer satisfaction.
Register Today!
EDITORS' PICKS
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...

26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...