Logistics acceleration of e-commerce and turbo for smart cities

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

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

E-commerce, initially ridiculed and neglected, has not only transformed the global world but also the internet into a “local” shopping center, while simultaneously completely changing 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 few people know is that it is primarily thanks to logistics and logistics managers who are increasingly bringing the growing demand for "order today, delivered today" ( same-day delivery ) closer to reality.

Suitable for:

• Well-equipped for no-line commerce – The further development of omnichannel.

To ensure increasingly faster delivery in a sustainable way, in-stock goods must be brought closer to the customer. Goods that have to be shipped from China to Germany for each order have no chance of sustainability or repeat business. Even if goods have to be shipped from Hamburg to Munich for an order, there is a delay of up to three days in the worst-case scenario. At best, there is still a one-day delay.

Accelerating the delivery of online orders looks different. A complete reorganization of the supply chain will be unavoidable. Retail companies must react quickly to avoid falling behind. This is also known as micro-fulfillment or micro-hub strategy.

This also presents a challenge and an opportunity for fulfillment service providers to expand their logistics network and simultaneously specialize in micro-fulfillment.

A key characteristic of micro-fulfillment is the establishment and expansion of local, decentralized hubs . Their small size allows them to be ideally positioned near key locations such as metropolitan areas, cities, and residential areas.

Customer brand loyalty can no longer be determined by product quality and performance. Many products are already similar in price and performance. The overabundance of goods also frequently leads to a reluctance to buy.

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

The defining characteristic of a micro-fulfillment warehouse is automation. Precise inventory management and control (networking of micro hubs), error reduction, and automated returns management, along with the right warehouse management system (WMS), also require the know-how for autonomous retail systems .

Suitable for:

• Autonomous retail systems

The prerequisites 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 of smart cities.

Smart Cities represent the implementation of digital technologies in urban areas. The comprehensive networking of administration, utilities, households, businesses, and municipal facilities is central to this concept.

Proximity to the end customer reduces delivery costs. Last-mile delivery can be made more efficient and traffic-compliant by using alternative means of transport instead of a delivery van, such as drones or bicycle couriers. This would significantly reduce traffic congestion and substantially lower the consumption of fossil fuels.

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

What happens next?

Micro-fulfillment is not an off-the-shelf solution. Entire supply chains and scenarios need to be rethought and replanned. This requires several steps, from initial assessment to implementation using state-of-the-art technology. Reliable partners with experience are essential.

Logistics planners and managers are well aware of market changes. The success of current developments to date is primarily due to their foresight and years of planning for implementation. We can help them keep pace with these rapid developments and take the right measures. No one person has the solution alone, but together we can better see the opportunities for competitiveness and market development. Intralogistics is not some secret science known only to a select few. But there are few who can plan and design solutions individually, taking into account the customer's requirements and building on experience.

Talk to me. I am happy to assist you at any time.

Konrad Wolfenstein