Since the year my first daughter was born, way back in 1987, my interest in green supply chain has been growing and many of my previous articles have focused on related topics including carbon neutral supply chains and the circular economy to name but two.
Imagine my excitement to now finally have the opportunity here at MonarchFx to help build not only the most effective customer experience omnichannel solution, but also the most sustainable!
The secret in this case is harnessing the power of Distributed Logistics to deploy your products closer to your customers and stores which reduces last mile transportation costs (as well as the associated carbon) while at the same time driving the ability for brands and retailers to also INCREASE SALES!
There are many factors within the Distributed Logistics model which drive business benefits, but relative to transportation the big shift is by moving last mile delivery off of long distance air mode courier to more sustainable local ground deliveries. Simply put air transport generates 4 times the carbon impact of ground transportation and driving this differential is the fact that carbon from air transport is also released higher in the atmosphere.
Just over a year ago now, my journey with MonarchFx began and since that time we have completed a number of analyses which supports the assertion that Distributed Logistics networks are the most sustainable of current available supply chain options for ecommerce and retail store replenishment.
With this in mind, please see below 2 examples which highlight the significant sustainability benefits available from Distributed Logistics:
Example 1: Currently One Site compared to 2, 3 and 4 Sites
Example 2: Currently Five Sites Compared to Seven Sites
Interestingly enough, even when you get to higher numbers of sites, like the example above comparing 5 sites to seven sites, there’s still almost a 27% sustainability improvement opportunity!
Many will say that these sustainability benefits are all well and good Jeff, but what about the potential of inventory to balloon under such Distributed Logistics scenarios?
The answer here is simple, following application of Pareto’s Law to your sku mix only A skus, and perhaps some or all B skus, should be deployed to all of the Distributed Logistics sites. Think of these Distributed Logistics sites as more of a Forward Pick Location in your Distribution Center, but set up in a remote location. As well, the mandatory use of advanced inventory management tools, to optimize your inventory and replenishment across your entire Distributed Logistics network, are key to avoiding a geometric explosion in your inventory as you roll the network out.
And even though the focus of this post is sustainability, please don’t lose sight of the fact that two other major benefits available to your business from Distributed Logistics are improved customer experience through more rapid delivery, by moving from 3 to 5 day delivery down to 2 day, Next Day and even Same Day delivery options.
Even more exciting is the potential for the last mile delivery improvements available from Distributed Logistics to drive increased sales for your company business, think of it a LOGISTICS driven initiative that’s also able to drive TOP LINE SALES for your company!
For more on this check out my previous post ‘How Getting Logistically Closer to Your Customers Means More Sales!’ and feel free to share this with your CEO, CFO and VP Sales if you need additional support for your Distributed Logistics efforts.
So here I say last but not least, to any of you who still have doubts and/or reservations about these two examples and associated carbon reduction numbers I will lay down the following challenge and assertion.
Provide us with your data under NDA and we will then provide you with a summary comparison of current site(s) to a graduated Distributed Logistics model, and through this process will be able to demonstrate to you potential sustainability AND transport savings benefits of similar magnitude to the two examples above!
As always, feel free to reach out to discuss, learn more and take us up on this offer!
Cheers
Jeff
Vice President, Business Development, MonarchFx jashcroft@monarchfxgo.com 919.500.9150
Interested in learning about and sharing your views on how Distributed Logistics can assist you in driving increased sales, reducing last mile transportation costs, improving sustainability AND dramatically improving Customer Experience? Take less than 5 minutes to complete the 2019 Distributed Logistics Survey to learn more and you will also get a summarized version of the results once the survey is complete! Cheers!
Take the survey here: https://lnkd.in/gr2iaPQ
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