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Supply Chain News: Smaller and Smaller DCs becoming More Popular, Need Special WMS Support


Simplicity should Rule, Gartner Analysts Say

Nov. 25, 2019
SCDigest Editorial Staff

Among the numerous impacts of ecommerce on logistics is this: an increasing need for smaller, more local distribution points, sometimes temporary, sometimes longer term.

Supply Chain Digest Says...

One attractive alternative for many may be to avoid the issue altogether by going the outsourcing path by using the on-demand warehouse marketplace.

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A company called Flexe has been a key player in this evolution, with its model of partnering with companies that at any point in time might have excess warehouse capacity, which can be rented to shippers needing space and shipping in an area. The term "on-demand warehousing" is often used in this context.

UPS soon launched a somewhat similar service, and others are also competing in this area.

But there are other factors in this overall trend. For example, Home Depot announced in 2018 that it was building out a network of some 170 smaller fulfillment sites across the US to handle shipping of popular products and act as a crossdock point for other items.

In a recent research note, Gartner analysts Dwight Klappich and Simon Turnstall identified a number of scenarios where such smaller and/or temporary distribution sites are required, starting with retail:

• New operations or those covering overflow for ecommerce

• Ecommerce fulfillment of large/bulky and heavy items requiring space, but not much complexity beyond the size of the goods

• Low-complexity fulfillment with a very small range of SKUs and very limited value-added services (VAS)

• Simple retail replenishment - for third-party stores

• Click-and-collect fulfillment centers attached to retail outlets

There can also be use cases outside of retail, including:

• Basic material support for manufacturing operations (sometimes referred to as "inbound to manufacturing" and common for just-in-time manufacturing environments)

• Early forays into ecommerce for consumer products companies on limited lines

• Storage and distribution for point-of-sale display items and packaging

• Interim operations to cover promotions and/or peak season

Naturally, these facilities need some level of technical support, both the support the activities each performs and also to provide visibility to network inventories.

(See More Below)



But companies in general don't want a full blown WMS for these sites, Klappich and Turnstall say – instead, what is valued is simplicity.

"Simplicity is rated based on how easy the most basic capabilities are to use, learn, configure, implement and maintain," they write, adding that "Many companies now support very simplistic warehouse operations in which the functional requirements are uncomplicated, but the need for very easy to learn and operate WMS capabilities is mandatory. Workers can often be temporary or non-logistics people, so an intuitive, zero-training user experience is valuable."

The analysts then provide this handy list of questions to ask and answer when looking for WMS-lite support for these smaller facilities:

• Can end users operate the application with zero training?

• Does the application have a consumer-grade mobile UI?

• Is it intuitive and effortless to use?

• Can new sites be provisioned with almost no effort?

• Is there a minimal, if any, maintenance burden for every site?

• Are process steps minimized and simplified (e.g., one-click operation)?

• Are functional options limited to reduce confusion?

However, they note one attractive alternative for many may be to avoid the issue altogether by going the outsourcing path by using the on-demand warehouse marketplace.

What do you think about smaller DC WMS support? Let us know your thoughts at the Feedback section below.




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