Logistics acceleration of e-commerce and turbo for smart cities

Published on: February 10, 2021 / Update from: February 24, 2021 - Author: Konrad Wolfenstein

Micro-Fulfillment, the logistics concept of the future – What is Micro-Fulfillment?

The e-commerce and omni-channel turbo: micro-fulfillment

E-commerce, initially laughed at and neglected, has transformed not only the global world but also the Internet into a “local” shopping center and at the same time completely changed our habits and expectations.

Without digital platforms, our world would be unthinkable today. Who still remembers going to the video store, where today we just pull out the remote control and use Netflix, Amazon Prime, Disney+ and all the online video offers? Many people book their trips almost exclusively online and don't even go to the local travel agency. And of course, we already generally order gifts, devices and other accessories online, including from Amazon, eBay and Google.

Omni-channel concepts provided the solution. But what only a few people know is that it is mainly thanks to logistics and the logistics managers who are bringing ever closer same-day delivery

Suitable for:

• Well equipped for no-line commerce – the further development of the omni-channel

In order to be able to guarantee ever faster delivery in the long term, the goods in stock must be brought closer to the customer. Goods that first have to be brought from China to Germany when ordered have lost any chance of sustainability and subsequent orders. Even if goods have to be delivered from Hamburg to Munich when ordering, there will be a delay of 3 days in the worst case. At best there is still a day in between.

Accelerating the delivery of online orders looks different. A reorganization of the entire supply chain will be essential. Retail companies have to react quickly to avoid being left behind. Also known as micro-fulfillment concept or micro-hub strategy.

This is also a challenge and at the same time an opportunity for fulfillment service providers to expand their logistics network and, at the same time, specialize in micro-fulfillment.

The key feature of micro-fulfillment is the establishment and expansion of local, decentralized hubs . Their small size means they can be ideally positioned near hubs such as metropolitan areas, cities and residential areas.

Customers' brand loyalty can no longer be determined by the quality and performance of the products. Many products are already similar in price and performance. The oversupply of goods also leads to frequent reluctance to buy.

Only service, advice, user experience (UX) and, above all, delivery speed are important if you want to continue to retain customers. This is, above all, Amazon's success concept.

The key feature of a micro-fulfillment warehouse is automation. Accurate inventory management and control (networking of micro hubs), error reduction, automated returns management are, in addition to the right warehouse management software (WMS), also the know-how for autonomous retail systems .

Suitable for:

• Autonomous retail systems

Requirements for micro hubs already exist in Germany!

Converting the central warehouses of retail companies or logistics centers into micro-hubs would be possible without any major problems. To start with, it is enough to expand just one part of the micro-fulfillment area and adapt it to the market using scaling solutions. For example, existing grocery chains can be converted into micro-hubs or a part of them can be converted into a micro-fulfillment solution.

 

 

Smart city with micro-fulfillment

At the same time, micro-fulfillment contributes significantly to the successful concept for smart cities.

Smart cities stand for the implementation of digital technologies in urban areas. The focus is on comprehensive networking between administration, suppliers, households, companies and municipal institutions.

Proximity to the end customer reduces delivery costs. Last-mile delivery of goods can be made more efficient and traffic-compliant using alternative means of transport instead of a delivery van. For example through drones or bicycle messengers. This would significantly reduce traffic congestion and significantly reduce the consumption of fossil fuels.

• Japan takes on a pioneering role – Smart Cities – The solution for mega-urbanization?

How can things continue?

Micro-fulfillment is not an off-the-shelf solution. Complete supply chains and scenarios must be rethought and planned. Several steps are necessary for this. From inventory to implementation using the latest technology. Reliable partners with experience are essential.

Logistics planners and those responsible for logistics are aware of market changes. The success of the current developments to date is mainly due to their prudence and years of planning for implementation. We can help you continue to keep up with rapid developments and take the right actions. One person alone does not have the solution, but together we see better opportunities for competitiveness and market development. Intralogistics is not a secret science of a few. But there are few who can plan and design solutions individually and taking into account the customer's requirements, based on experience.

Talk to me. I am happy to be at your disposal at any time.

Konrad Wolfenstein