Last week we looked at ways to manage your inventory to achieve the
current holy grail of fulfilment, same day delivery. This week we will
examine network infrastructure, and how you can get everything where it
needs to go in time.
There are two basic strategies you can follow, depending on the 3V analysis in the last installment. If you have a high 3V product, you can use a single warehouse model. This makes your logistics and supply chain simpler than the multiple-warehouse option, but requires you to commit to somewhat expensive freight options to your more distant customers. This model only really works well if your customers are clustered in major cities which are in the same general area. Again, luckily for England the bulk of most nationwide business’ customers are in the South, or close to it. The freight expense will generally be lower than the cost of the extra warehouses or fulfilment partners, as well.
Same day deliveries and multiple distribution pointsThe other model is for multiple distribution points, all allowing same day delivery to any customer from at least one location without too much expense. This is the necessary solution for relatively low 3V goods, especially bulky products worth less per kilo, and not suited to being hurried from London to Edinburgh before 3 pm for an extra £10 shipping cost. Of course, this can be expensive in terms of infrastructure. You also have to keep stock on hand at all your locations/3PLs. Nonetheless I know a tyre wholesaler in Yorkshire that makes a tidy profit getting orders out to everywhere from Wales to Scotland on the same day with a multiple warehouse model, so it can be done.
Modelling software can help you spot the tipping point between strategies for any one SKU, but askilled fulfillment partneris the real key. Ask what they can do, and how fast they can do it. You won’t be the first to explore same day options. Let’s hope you’re not the last.