Small businesses doing their own order fulfillment might not need a lot of information on ways to do it better. But, as those businesses grow, it becomes a greater and greater challenge to provide fast shipping at a low cost.
This is where data comes in, and these days, it’s the driving force behind all good 3rd party logistics companies.
What Data Means to the Supply Chain
You might be shocked to learn about how much data is collected as a product goes into a warehouse and travels through to the end-customer.
There’s data collected on the speed at which it reaches the warehouse floor once it’s picked, information collected on how accurately it’s put into the right box, they even measure how many steps it takes to get from the picker to the packer! 3rd party logistics firms and the supply chains they support are the ultimate collectors of data.
It’s not for nothing, though. All that information makes it possible for your fulfillment house to improve their processes and get a better bead on just how much product you need to have in stock at any given time, saving you warehousing costs, too. These lean warehouses are great, but there’s something even better that data has made possible for 3PLs: the agile supply chain.
Agile Supply Chains are Smarter
Big data is the big thing in 3PL today, according to a recent report from research firm Technavio. There’s a reason for this. Instead of just being lean and mean, enough data used in the right way can also make your supply chain able to respond fast to changing market trends. That’s what agile is all about, making your warehouse and distribution platform able to ebb and flow with the fulfillment tide.
Instead of being reactive when trends change or the economy tightens, the agile supply chain is proactive. It can see a certain distance into the future, but even what it can’t see it can still respond to rapidly. Agile supply chains aren’t better than lean ones, however. The two concepts go hand in hand to create supply chains that are better than ever before.
Often this means having multiple sources for materials and supplies, or being able to reroute deliveries and trucks to warehouses closer to customers who demand those goods. Sometimes it means activating backup warehouses to store excess goods in anticipation of a run on a product. The beauty of it is that the design allows you to avoid some of the biggest pitfalls of order fulfillment, including slow and cumbersome deliveries.
Data is where it’s at in 3PLs and they’re only getting smarter.