Using Micro-Fulfillment to Solve Last Mile Logistics Challenges

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Using Micro-Fulfillment to Solve Last Mile Logistics Challenges

Even before the recent COVID-19 pandemic, e-commerce was quickly evolving, with more customers seeking to complete their shopping requirements from the comfort of their home. Although e-commerce only accounted for around 10% of retail sales, that figure was already growing more quickly than figures for overall retail. One aspect helping to grow e-commerce was the promise of faster shipping times, with some companies offering a guaranteed two-day or even same-day delivery.

Originally, faster shipping times incurred a premium, but nowadays, customers have come to expect and demand this facility. With current conditions placing the supply chain under severe strain, manufacturers and retailers are forced to come up with inventive ways to meet consumer demand. One way is through micro-fulfillment centers. These centers are helping retailers cope with demand that is several times higher than predicted.

Micro-fulfillment centers are quicker to set up than traditional warehouses, helping retailers to ship goods faster from locations where demand has increased substantially. Orders can be routed more efficiently with strategically located inventory, easing the strain on major distribution and warehousing systems. When essential goods are ordered, it is vital to ship them fast. Consumers receive their goods more quickly because the supply chain is shortened.

While micro-fulfillment centers are proving an excellent solution given the current situation, they are not a new concept. Usually, retailers use them during peak ordering times, typically around the holidays. Other times, they are used when retailers want to break into a specific region but do not wish to invest in a costlier and more permanent warehouse until they become more established. Another area where micro-fulfillment centers can help is with last mile logistics. Often, last mile delivery is the costliest part of the entire supply chain, sometimes equating to more than half of all shipping costs. Pop-up distribution centers allow retailers to place the goods nearer to customers, shortening the supply chain, and reducing delivery costs. Also, customers benefit from faster turnaround times.

Even with micro-fulfillment, retailers are struggling to cope, and pop-up distribution centers are not a workable solution for every business. But with COVID-19 set to be with us for the foreseeable future, finding a workable solution is essential. Anyone who has ordered online recently might have noticed some retailers are much more successful at expediting orders quickly and efficiently.

These more successful retailers are using solutions that include automation technology and logistics software, streamlining their supply chain while maintaining customer satisfaction, and importantly, their loyalty. Our logistics software is perfectly designed for this process, with BlackBox integrating seamlessly into any WMS system. Customers get near to real-time shipping costs at checkout through BlackBox selecting the most suitable carton size, minimizing voids, and reducing waste.