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Dimensions of Supply Chain Management
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Best Practices In Transportation Management - Key Driver Of Logistics -Prof. Ellur Anand
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ast Mile Logistics
advantage. Flipkart started its own logistics company eKart Logistics to improve their last mile logistics and other aspects of logistics too. A responsive last mile supply chain allows retailers to meet demand, manage seasonal peaks, and drive hot merchandise to the shelf quickly and efficiently.
Amazon.in had used Fed-Ex to deliver a package to me in Harihar when I ordered recently 'COSMOS' by Carl Sagan. I had smiled that morning when I clicked 'Track Your Order' button on Amazon's site to see Fed-Ex as the carrier. The smile was because I was thinking 'How good is Fed Ex to deliver a package to Harihar?' I knew what was about to come. It was actually delivered to one of their subfranchises at Davangere, one of the delivery boys was sent to Harihar at 7.00 PM and I was finally called to pickup my book from a said destination in Harihar. I had to finally ride to that place to pick up my package. I was thinking this wouldn't have happened if Amazon had used professional courier or DTDC for local delivery. This is Last Mile Delivery. The above incident is just a minor one. It could have been huge if it had happened to Walmart as customer and some Indian manufacturer as supplier to Walmart. Imagine if the supplier ships the material, material reaches US destination port without any trouble and then it has to be picked up from port and delivered to Walmart distribution center. If this last mile logistics of the supplier is poor, no matter how good it was till it reached the port of destination, it could cause disaster to the supplier as he might lose Walmart as a customer.
Omni-Channel Fulfillment Everybody knows about 'Landmark' retail outlets which mainly sell books and many other stationery items, sports items, video games etc. If they had relied only on their outlets in multiplexes they would have lost large chunk of share to several online retailers like Flipkart, Jabong, Firstcry, Amazon.in etc. No company would like to lose the share without any efforts. Landmark brick-and-mortar stores too has online store (www.landmarkonthenet.com) to not to lose the share that they deserve to online retail stores like Flipkart. Walmart too has its online store to counter Amazon.com though the online share of Walmart is negligible in front of the Amazon's. Omni-channel is an initiative by brick and mortar retailers to better integrate their stores and e-commerce channels. So a retailer might support buy online, pick-up at store; or order online, deliver to home from a store; several other fulfillment paths are also possible. Here are some excerpts from USA Today:
Last Mile is the portion of transit from the final delivery center to the customer's door. It could be just two kilometers as in my above example or it could be several miles from port of shipment to the retail store. There are interesting cases the way companies handle this last mile. In South Korea, Tesco has a chain called Home plus that has become the second largest retail chain in the nation. The 115-store chain consists of big discount hypermarkets similar to Walmart in merchandise, but also similar to mini-malls in that they feature numerous independently-operated smaller stores like travel agencies, fast food, and bookstores that lease the space from Tesco. These stores are currently located in Seoul's subway stations. The subway station has pictures of shelves stocked with food and other consumer goods customers would typically see in an actual store. Shoppers point their smartphones at the QR codes, click, and add items to their online shopping basket. Their goods are delivered after they get home. The Home plus online store is now the number one e-commerce site for groceries in South Korea. Of course, supporting a virtual store requires a home delivery supply chain. The e-commerce initiative allows Home plus to gain market share without building stores. But in crowded metropolitan areas, lastmile logistics is a challenge; it also requires an infrastructure, including pickers, trucks, and drivers.
“Some of the world's largest retailers are turning their stores into mini distribution hubs to help them compete better online against Amazon.com. Instead of fulfilling Web orders from warehouses hundreds of miles from shoppers' homes, companies including WalMart, Best Buy and Gap are routing orders to stores nearby. Store employees pick products from shelves, pack them into boxes and drop them into waiting FedEx and UPS trucks that zip off to homes a few miles away. The trend, known as Ship from Store, saves money through shorter delivery routes. More important, it speeds deliveries, avoids costly markdowns and recoups sales that have been lost to Amazon, the world's largest Internet retailer� Walmart then has to oversee that its retail stores will also act as distribution centers and will behave like warehouses. This means that Walmart has to gear up to deliver 'Perfect Order'. Omni-channel commerce is driving the most interesting set of logistics challenges the supply chain field has seen in a generation. Other best practices for omni-channel deliveries include using GPS to be able to track trucks in real time; using interactive voice response systems to make sure customers are home and then to survey them afterwards on their delivery experience; and integrating the routing solution to the warehouse management system so that warehouse labor can be efficiently scheduled. The most effective strategies and technologies are not known yet.
In order to cater to the last mile efficiently and effectively, it becomes necessary for companies to invest in infrastructure by increasing their capital expenditure. They have to increase logistics assets trucks, distribution centers (DCs), people, technology etc. Companies know that once the goods are dropped at some port or terminal or transport provider's office, what occurs after that to make the goods reach the customer point can make or break the logistics strategy. Companies that have control over this part of the supply chain will be market leaders as it acts as competitive
And more recently Amazon's Drones‌ This is the hottest news which has interested not only logisticians but common customers too. Though it is said that Amazon is waiting for clearance from Federal Aviation Administration, details are not clear. Amazon CEO, Jeff Bezos, told CBS' 60 Minutes on 1st Dec, 13
The Chanakya, January 2014