Greg Swallow, Strategic Account Manager, HighJump Software
These days, every article covering the supply chain mentions either Omni Channel distribution, third party logistics or drop shipping. These terms and processes are having a direct affect on your clients that live in the distribution and wholesale manufacturing space. And, as the complexity – and number of choices – within the supply chain increase, it becomes necessary for you to understand these processes to better support your clients.
More than ever, your clients are looking to you for guidance in their quest to meet the demand of their customers – or trading partners – which requires a clear understanding of distribution and logistics. Understanding the basics of the supply chain makes you an invaluable resource to them.
The most important goal for your customers is to get their products into the hands of the consumers. The way they do this varies, based on trading partner requirements as well as consumer requirements.
Drop shipping is used by both suppliers and retailers. Suppliers, when taking orders directly from their end users, will drop ship directly to the consumers’ address which provides cost savings, increased customer satisfaction and accelerated revenue recognition. Retailers leverage drop shipping when their suppliers’ items are specialized, needed in bulk or require a large foot print for storage. Suppliers who take orders from web sites but don’t house the inventory also take advantage of drop shippers to deliver the products to the end users.
Drop shipping can be done directly from the supplier or manufacturer, as well as from warehouses and third-party logistic providers (3PLs). 3PLs are basically warehouses that provide additional services or logistics support. They help to reduce the cost of inventory management, manage the variability associated with seasonality and manage transportation (trucking) requirements and inventory load. Additionally, being strategically located, they act as clearing houses and can house returned good quarantines. Working with a 3PL can provide your clients with the peace of mind they need to manage their inventory in a cost-effective manner, while they continue to focus on growing their business. Which, at the end of the day, is a benefit to you~
Distribution using an Omni Channel method, is the latest trend in supply chain management. With the adoption of mobile device shopping and on-line competition, consumers don’t want to wait weeks or even days to receive their products. Overnight delivery is the new norm. Omni Channel distribution allows suppliers to get their products in the hands of the consumer anytime, anywhere, any place by pulling the product from the location closest to the consumer. Local retailers are now evolving to distribution centers for the consumer.
Over the next few weeks, we will continue to provide short articles designed to help educate you on the evolving landscape of the supply chain. Our goal is to empower you so you can effectively guide your clients as they move their products through the supply chain.
Note: HighJump TrueCommerce EDI is a Gold Sponsor at Scaling New Heights. Greg Swallow will be presenting at a Power Breakfast that week. We encourage you to register for his session and bring the questions and challenges your clients are currently facing in getting their products to the store shelf.