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October 21, 2013

Same-day order fulfillment has been the Holy Grail for retailers for some time now. The promise of satisfying consumer urges within hours of a purchase being made is tantalizingly close, yet far from widespread and still fraught with potential pitfalls.

Non-traditional exterior of a SuperTarget, Jac...
Will stopping in for groceries soon be a choice, rather than a requirement? (Photo credit: Wikipedia)

The marketplace is also incredibly competitive. The ascent of ecommerce has attracted both traditional and tech-reliant businesses to the lucrative field, eager to pioneer  fulfillment models that will gain traction among online shoppers. Factor in a further layer of disruption from ‘mcommerce’ – purchases made on smartphones or tablets – and there are a number of moving parts to complicate matters.

Arguably the biggest race being run is between big-box behemoth Walmart and the ubiquitous online retailer Amazon.

Representing a more traditional, bricks-and-mortar approach to satisfying consumer needs, Walmart has seen its dominance chipped away at by its online-only peer over the last decade. After racing back with the establishment of its own web ordering platform, Walmart saw value in maintaining that momentum and began limited experiments with same day order fulfillment. Its ‘Walmart To Go’ service currently offers same-day delivery options, including groceries, in San Jose and San Francisco, and tests have been conducted in markets around the country for other product types. Last week it announced that its latest expansion would see the service introduced in the Denver area, at a cost of $5 – $10 for same-day delivery.

Meanwhile, Amazon has been moving at a similar rate, in the same space. Its ‘Amazon Fresh’ service has operated around Seattle for some time, but  expansion into the Los Angeles market this past June, and to San Francisco before the year is out, marks a new twist in the drive for sign-ups. The online retailer’s preference for subscription models has it offering a 90-day free trial to the service, before graduating members to an annual payment plan of $299, which includes its ‘Amazon Prime’  service. The latter throws another curve ball to competitors, as it leverages a popular service that offers free 2-day shipping on a wide variety of items.

In reality, the price point has so far remained a secondary factor, behind actual proof of concept. Eventually it will become crucial, but for the moment retailers of any size simply need to demonstrate that they can deliver in such a short time frame. This introduces another hurdle in the form of product type and returns.

Groceries have a clear requirement for timely delivery, given that many items are perishable, so same-day order fulfillment is a valuable service to offer. In the same breath, however, the logistics involved in picking, packing, transporting, and potentially returning significant quantities of fresh, fragile produce are complex to say the least. Waste must be carefully monitored and managed, hence the limited test markets for even these giants of retail, who have a wealth of supply chain expertise at their disposal. As quickly as companies with the vast size and influence of Walmart, Amazon, Home Depot, and Google might want to move into this space, the sheer scope of what they offer makes the process slower.

Interestingly, this could provide a form of competitive advantage to start-ups and retailers with a smaller product range. Once the immediate challenge of creating a supply chain solution that can deliver same-day order fulfillment is achieved, these businesses can potentially expand their offerings more quickly. They can only corner their own particular market niche, of course, but thousands of competitors doing so would present a credible threat to the dominant retailers already mentioned.

The promise of same-day order fulfillment will ensure that we see huge strides in the near future, where the past few years have seen only tentative steps. For the moment, though, the majority of us can still look forward to circling the local big box store for a prime parking spot on grocery day!

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October 18, 2013

Seasonality in the supply chain is top of mind for most retailers, particularly at this time of year in the run up to the holidays.

Cover of "Happy Holidays! (Miniature Edit...
Your seasonal supply chain planning can help customers to have ‘Happy Holidays!’

Although the familiar images of Black Friday store stampedes and sold-out star toys will be shown as much this holiday season as any other, more U.S. consumers than ever will do a majority of their shopping online this year. The National Retail Federation confirms this, assigning an $82 billion value to its projected 13-15% growth in online holiday sales.

This ecommerce boom makes managing the surge in seasonal demand on your supply chain more important than ever. Continue reading Seasonal Supply Chain Planning Recommendations for Online Retailers

October 9, 2013

Everywhere you look around the East coast, vast fulfillment centers are under construction. America’s largest retailers are looking to satisfy revitalized demand, meaning new facilities and expanded operations.

Outsourcing order fulfillment is also proving a popular option for smaller retailers, who often lack the ability to scale without third-party expertise.

Continue reading What are the Strategic Advantages of Outsourcing Order Fulfillment?

September 25, 2013
Bayonne Bridge at sunset
New Jersey’s Bayonne Bridge at sunset

At Capacity LLC we’re proud to call New Jersey home (not forgetting our crucial California warehousing operation!). We already know that the area is a vital distribution hub, of course, but it’s always welcome to have that viewpoint validated by a third party, as this feature on DC Velocity explains.

 
The Port of New York/New Jersey is one of the largest entry points for goods coming into the U.S., behind only its West coast peers in Los Angeles and Long Beach. The port district itself is 25 miles long and handles in excess of 75 million metric tons (RITA, 2009) every year. That’s a lot of cargo to sort, store, and redistribute to final destinations! Whether moving further into the U.S. via intermodal transport solutions or finding a consumer closer to the New Jersey-area, goods must move quickly through the port and make use of solid infrastructure to travel to a distribution center (DC) to await the next phase of their journey. New Jersey – and particularly central NJ – provides “easy access to all the major modes of transportation: road, rail, air, and ocean.” 

 

With a high concentration of the population in the Northeast, New Jersey doubles as a core base of operations for warehousing and logistics. We see time and again that major retailers find their sweet spot in this state, whether that means creating their own facility, as exemplified by Amazon’s massive facility under construction in Robbinsville, NJ, or employing a company like Capacity LLC to provide retail fulfillment solutions, as have brand names like Macy’s and Target. The combined efficiency of pulling cargo straight from port to DC, and efficiently managing its storage/delivery through to final point-of-sale is an attractive proposition for company and consumer alike. 
 
Even with this prime position, however, New Jersey’s logistics providers can’t rest on their laurels. Major impacts are expected from such transport developments as the impending Panama Canal expansion, meaning that the state and region must be ready to handle the anticipated growth. Already an efficient operation, new developments will see billions of dollars of investment come to fruition in the near future, with the raising of the Bayonne Bridge and the implementation of the ExpressRail System being two projects at the heart of this expansion. 
 
The jobs and economic growth that come with this adaptation of our industry is hugely welcome after a tough year of natural disasters and the struggle to get things back to normal. Watching our area develop is one of the highlights and, we’ll say just one more time, something that we’ at Capacity LLC are proud to play a part in!
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September 20, 2013
Warehouse #HDR #photog
Warehouse #HDR #photog (Photo credit: mescon)

Warehouse management is set to see significant benefits in the near future thanks to advances in mobile technology.

As strong advocates for improving order management through the application of new technologies, Capacity LLC has embraced developing systems including custom online order management and EDI-controlled fulfillment.

These may be just the tip of the iceberg, however, as mobile data integration begins to permeate what is an increasingly tech-driven profession. A recent survey by Motorola confirms this, finding that 66% of respondents plan to better equip staff with new technology in the near future, and identifying new areas of business growth driven by smarter warehousing.

Perhaps surprisingly, much of the technology at the heart of moving warehouse management forward is already at work, in our own pockets. Our mobile devices can monitor where we are, where we end up, many of the points in between and how long it took to get to each. When applied to the moving parts of the warehouse environment – fork lift trucks, tagged pallets of stock, communications devices on staff, and much more – a potential treasure trove of real-time and archival data is unearthed.

The pressing questions for solutions providers then become where to utilize it and how to effectively integrate the systems reliant on these data?

Thankfully there are plenty of excellent data analysis experts out there to do that legwork for warehouse management, not to mention software that can be employed to manage much of the process. This frees up managers to make plans and decisions in their own area of expertise, judging the information that will be of most use and applying the findings to improve system efficiency. This will become a continuous process of data collection, analysis, implementation and refinement as all of the parties involved begin to put together their preferred solutions
Our own warehouse management system is provided by Foxfire Technologies and employs specifically programmed elements that allow us to handle bespoke client profiles, locating and picking right down to the item level. Learn more about the system and the way we approach warehouse management here.
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