Contrary to what some procurement professionals may think, all logistics solution providers are not created equal, and those who consider price only, or as main factor in their selection process, are doomed to mediocrity and perhaps even failure.
And as both online and offline retailers are pulled further and faster into a future where consumer demands are steadily increasing and customer experience is paramount, the need for advanced logistics solutions delivered seamlessly across all channels not just by providers, but by true partners, will only continue to increase.
Even more importantly is the ongoing evolution or metamorphosis of what was traditional Third Party Logistics (3PL) providers, simple providers of basic logistics services, into the emerging Unichannel Logistics Partner (ULP).
Many in the industry use the term Omnichannel, so why do we now need something called Unichannel and what’s the difference?
Well, according to Jim Tompkins, Chairman & CEO of MonarchFx, the difference between Omnichannel and Unichannel is that Omnichannel wants to create an integrated customer experience and create inventory transparency, whereas Unichannel goes beyond just the customer experience/inventory level perspective and seamless customer experience across channels, in addition Unichannel also creates an integrated supply chain across all of these channels. With this in mind, below is Jim Tompkins’ definition of Unichannel:
Unichannel is the integration of supply chains across channels to support an omnichannel customer experience. ~ Jim Tompkins
And as the name implies, Unichannel Logistics Partners become part of your business vested and invested in your success both literally and figuratively as a close advisor, with best of breed technology, network design, automation, inventory management and deployment capabilities, working with you as a trusted partner to transform the business in the face of growing customer experience challenges.
The very nature of creating a Unified Customer Experience (UCX) means getting closer to the customer, and when it comes to logistics this couldn’t be more true. Products will actually need to be deployed closer to the end consumer in order to rapidly meet customer needs and deliver quickly whether to the home, retail store, office, lockerbox or pick-up center.
The great news is that deploying inventory closer to customers not only shortens delivery lead times, it has been demonstrated to also increase sales. Here’s link to the Achieving Revenue Gains from Distributed Logistics: The Value of Inventory Proximity to Customers whitepaper by Gene Tyndall, Alex Baker and Stephen Timme which provides greater detail on this important sales phenomena.
So what does Unichannel Customer Experience look like?
As you can imagine this is a tough construct to capture graphically, but the below representation is the best we’ve seen to date!
Individually, both online and offline retailers will find themselves challenged to put such a network in place, and even those who attempt to do so will find they don’t have enough volume in regional centers to justify the automated fulfillment systems required to most rapidly and cost effectively pick, pack and ship both customer and store orders.
This is where the role of logistics solutions that can consolidate multiple customers into the same regional operation becomes clear, as this methodology provides sufficient volumes to justify the investment in shared automated fulfillment systems.
In short, going forward online and offline retailers need to expect MORE from their logistics partners!
MORE specifically, as highlighted above graphically, the need will be for supply chain operations which are Multi-Client, One Focus, Regional networks with Environmental stewardship. Let’s dive a little deeper into each to better understand these great and growing differentiated logistics services available from a Unichannel Logistics Partner!
Just as it sounds multi-client is all about creating shared use facilities which effectively house multiple clients in the same operation leading to a number of potential benefits such as:
> Capacity and space flexibility to scale logistics facility space up and down
> Flexible cross trained staff increased for peaks & decreased during slow periods
> Shared management team and redundancy
> Available fulfillment automation and robotics (order assembly & sortation)
One focus means just that, a singular focus on what the customer wants and needs as well as how they wish to acquire that which is desired. One Focus or Unichannel is allowing your customers to effectively access, research and purchase your products in any manner they choose whether PC, mobile, tablet, kiosk, virtual store or in-store; and then deliver them, or have them available for pick up, when and where your customer would like. Some important service needs and potential benefits are:
> Rapidly service both store and direct to consumer demand
> Provide both case and each picking as needed
> Distribution center inventory reductions as combined demand
> Store inventory reductions due to rapid replenishment
Unichannel is about ALL ordering and fulfilling channels the company decides to employ acting as one from the perspective of the customer. Unichannels are enhanced by their closeness to customers and the only way to do this from a product logistics and delivery perspective is to operate fulfillment centers in local regional markets.
Depending on your customer experience objectives both the US and Canada could be effectively covered from 2 to 4 locations, or increased up to 8 or many more fulfillment locations if Same Day delivery is required nationwide. See some of the benefits of regional networks below:
> Supports rapid service for unichannel deliveries
> Enhanced customer experience direct to consumer
> Improved store in-stock due to frequent/rapid deliveries
> Supports store size / inventory reductions
> Drives increased sales due to proximity to customers
Many in the business world are still not sold on the sustainability agenda. Regardless of your own personal viewpoint, the consumer backlash is building and those who continue to ignore and delay committing their company to more environmentally sustainable operations will ultimately pay a price at the hands of consumers.
One of the most exciting revelations to come from the study of regionalized unichannel logistics, is that in addition to providing better customer delivery experience and being more environmentally friendly, this type of network also drives significant transportation savings and increased sales! Literally, we’re talking a WIN-WIN-WIN-WIN scenario through properly executed unichannel logistics!
When it comes to carbon footprint of logistics networks, regional multi-client operations win hands down. See the benefits and opportunities for yourself:
> Regional facilities reduce transportation component based on increased local ground deliveries
> Nearly eliminates need for air transport long distance package delivery (worst possible impact on environment due to altitude of emissions)
> Multi-client returns / recycling / collaboration programs can be implemented at scale
> Automation utilizing energy efficient equipment is more affordable due to increased utilization in multi-client regional facilities
Third party logistics began as a simple ‘pallet in’ and ‘pallet out’ public warehousing approach in the last century and as you can see the evolution has accelerated quite dramatically over the last 25 years, with the increased focus now being on fully integrated supply chain solutions across all channels.
Retail is now facing its own revolution driven by multiplying technological customer touch points and a widening array of customer focused product acquisition prerogatives, many of which can be most effectively solved through regional multi-client logistics solutions.
The winners in our rapidly emerging unichannel bricks and clicks future will be those retailers and ecommerce sellers who understand the benefits and quite simply get MORE by making the choice to work directly with a progressive Unichannel Logistics Partner!