/ By Varsity Shipping Specialists / Technology • 3PL/Distribution • AS400 • IBMi • IT • Manufacturing • Parcel • Procurement • Retail • Shipping Software • Supply Chain/Logistics • Varsity Logistics/ / 0 Comments

What to Know Before You Invest: 7 Key Questions About Shipping Software

Shipping software is an important supply chain investment – do you have all the answers?

Rising transportation costs, labor concerns, and ever-changing customer demands for faster and free deliveries make shipping one of the most critical and costly areas of the supply chain. Because of this, the role of shipping software to gain efficiency and stay competitive has become increasingly pivotal. From optimizing resource allocation to ensuring consistent customer satisfaction, the right shipping software can make a significant impact on the cost savings you find as well as the overall success of your business. 

This leads us to the question: How do you ensure that your shipping software is a good fit? Before embarking on the journey of selecting the perfect shipping software solution, it is important to take a step back and consider your answers to a series of valuable questions. We’re sharing seven questions you should ask before deciding if a multi-carrier shipping software (MCSS) solution makes sense for your IBM i/AS400 system.

7 Questions to Ask Yourself Before Buying Shipping Software

Shipping software is an important supply chain investment. Here are the top things to consider before choosing a multi-carrier shipping software solution for your business.

1. Are we doing too many things manually?

If your business is using separate, carrier-supplied systems and website searches to find the best shipping rates, you can likely add automations to your process with a new shipping solution. By fully assessing the manual effort required, you can determine the potential cost savings a MCSS solution could provide. Shipping software improves accuracy and reduces errors, avoiding costly consequences that can arise from manual tasks.

2. Are our shipping costs accurate?

It is important to audit your shipping invoices to ensure they match your contract rates, so you avoid overpaying. Cost auditing can also reveal inefficiencies and bottlenecks in your current shipping operations, allowing you to pinpoint areas where redundant tasks may be causing unnecessary costs. When you identify the areas of cost savings, you can better allocate your budget for a more efficient operation.

3. Do we have good visibility of shipments once they leave our facility?

Now more than ever, customers have high expectations for shippers to meet estimated delivery dates and provide updates throughout the shipping process. Top-tier MCSS solutions integrate seamlessly with your carriers and have options to allow real-time tracking and status updates for your customers. MCSS visibility also helps reduce risks, like supply chain delays or disruptions, which can prevent substantial financial losses for your company.

4. Do we have an efficient number of shipping staff?

Evaluating your labor force can help you allocate your resources effectively, especially in today’s labor-constrained warehouses. Industry-leading MCSS are single, fully integrated systems that seamlessly connect with your existing carriers and ERP or WMS systems, replacing inefficient carrier-provided systems. Using advanced shipping solutions can save your team time and effort, allowing them to dedicate it elsewhere. This results in improved productivity and a competitive advantage.

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5. Can we scale up as needed?

Scalable shipping software integrates seamlessly with your existing software systems, ensuring that as your business scales, everything scales together cohesively. MCSS gives you the ability to automate carrier selection to find the best rates for your customer’s needs from the start, and as your business grows, you can add modules or features such as auditing, pick/pack integration, and custom filings. Investing in scalable shipping software is also a way of future-proofing your business operations, avoiding costly frequent software upgrades and keeping up with shifts in customer expectations.

6. How accessible is our shipping data?

The ability to analyze and evaluate transactional and historical data is essential for operational success. Choosing shipping software that allows you to easily view and/or export your data is the key to monitoring day-to-day shipping operations, ensuring accurate order processing and optimal resource allocation. Historical data gives great insight to performance evaluation and customer behavior, leading to data-driven strategies for future success and effective cost management.

7. How quickly will our investment pay off?

Estimating the time to achieve ROI helps align your investment with your financial goals and business strategy. This allows your company to effectively plan and allocate resources. Leading shipping software solutions, like Varsity Logistics, see their customers recoup 5-15% in overcharges and realize an ROI in just a few months. The combination of benefits that MCSS provides, like streamlined processes, automated rate shopping, batch processing, and reduced shipping errors, lead to immediate bottom line cost savings for your business.

Learn more about Varsity Logistics multi-carrier shipping software for IBM i/AS400 systems

Interested in learning more about the long term cost savings and increased operational efficiency with multi-carrier shipping software? Varsity Logistics offers a robust, industry-leading freight and parcel shipping solution for IBM i/AS400 systems that integrate seamlessly into your existing business infrastructure.

Contact our team of shipping professionals to discover how Varsity Logistics can step-up your shipping operations and revolutionize your supply chain game.

/ By Varsity Shipping Specialists / Carriers • Customer Experience • E-Commerce • Retail • Varsity Logistics/ / 0 Comments

7 Benefits of Carrier Diversification

Learn how carrier diversification reduces costs, improves customer satisfaction, and more.

Everyone’s familiar with the saying, “Don’t put all your eggs in one basket”. The expression is a warning against concentrating all your resources or efforts into one place or thing. When relying too heavily on a single option, you potentially put everything at risk in the event of a crisis. Although this time-worn phrase dates back to the 1600’s or earlier, it still remains applicable to an abundance of situations, including your shipping strategy.

An effective way to apply this advice to your shipping strategy is by diversifying your carrier mix. This provides shippers with carrier options in the event of a supply chain disruption. The saying became especially relevant in the logistics world after the pandemic struck, causing a spike in e-commerce, disruptions in carrier networks, shifting consumer behavior, and more.

7 Reasons to Implement a Carrier Diversification Strategy

Post pandemic, in today’s rapidly evolving shipping landscape, supply chain innovation and adaptability are essential. Still, amidst times of changing consumer expectations, dynamic market conditions, labor unrest and other unforeseen circumstances, businesses are realizing that carrier diversification is a key driver of success. If you are looking to inject flexibility into your shipping processes, mitigate risks, enhance service coverage, and unlock new opportunities, then carrier diversification is a strategy to put in place. Here are seven ways having more than one major carrier can benefit your business:

1. Carrier Diversification Reduces Risk

Relying on a single carrier can pose risks such as service disruptions due to weather, labor strikes, or unforeseen circumstances. By diversifying carriers, you reduce the risk of shipping disruptions having a devastating effect on your business by distributing shipping volumes across several providers. Additionally, with an advanced multi-carrier shipping solution, if one carrier experiences an issue, you can seamlessly switch to an alternative carrier. This redundancy helps to continue the flow of goods, ensure timely delivery and business continuity, and minimize the impact on your shipping operations.

2. Carrier Diversification Increases Flexibility and Scalability

By integrating multiple carriers into your shipping software, you gain the flexibility and scalability to adapt to evolving market conditions, shifting consumer preferences, and seasonal demands. It allows you to find the best carrier suitable for specific needs on a shipment-to-shipment basis, based on factors such as cost, transit time, destination, and service level. This agility allows you to optimize your shipping operations and handle fluctuations in consumer demands efficiently.

3. Carrier Diversification Uncovers Competitive Shipping Rates

Competitive Shipping Rates: Carrier diversification enables you to compare shipping rates across multiple providers. Each carrier may offer different pricing structures, discounts, or negotiated rates based on several favors like your shipping volume, destination, or time in transit. By having options, you can identify the most cost-effective shipping solutions for your business, potentially reducing shipping expenses and passing along those savings to retailers as well.

4. Carrier Diversification Improves Geographic Coverage

Incorporating different carriers into your shipping software allows businesses access to a broader network of delivery routes and service areas. Individual carriers typically have strengths in certain regions whether that be local, regional, or international. By diversifying carriers, you can expand your shipping reach to more areas and access markets that might be underserved by a single carrier. This allows you to leverage your established expertise in different geographic locations while also growing your business. Carrier diversification helps you reach a wider customer base and opens the door to entering new markets with confidence.

5. Carrier Diversification Improves Service Levels

Different carriers have their strengths and weaknesses, such as specific routes, delivery networks, or specialized services. By diversifying carriers, you can fill the gaps in areas where some carriers might be as efficient. This allows you to tap into each carrier’s unique strengths and select the option that best aligns with your specific shipping requirements. This can result in faster delivery times, higher customer satisfaction, and overall improved service levels.

6. Carrier Diversification Empowers Negotiation

When you have multiple carriers integrated into your shipping software, it strengthens your position during carrier negotiations. You can leverage competition among carriers to compare rates or service capabilities. Carriers may also be more likely to offer you discounts, customized solutions, or other attractive incentives to secure or maintain your business. Overall, negotiation allows businesses to vouch for more favorable pricing, contractual agreements, and value-added services.

7. Carrier Diversification Improves Customer Satisfaction

Every business has the goal to provide an exceptional customer experience- after all, it’s what builds brand loyalty and customer trust. By expanding your carrier library, you increase customization abilities, flexibility, and other great options for customers. It also allows for the selection of carriers based on factors like reliability, delivery speed, and geographic range that best aligns with your customer’s needs. With higher consumer expectations surrounding deliveries today, customers appreciate carriers who can get them their goods in a safe and timely manner.

How Carrier Diversification Facilitates Growth

Overall, diversifying your carrier mix offers a variety of benefits for businesses navigating the ever-evolving world of supply chain and logistics. This strategy enables greater flexibility, improved service levels, cost optimization, risk mitigation, expanded market reach, negotiation power, and increased customer satisfaction. Integrating multiple carriers provides operational redundancy, allowing businesses backup options in the event of disruptions and other unforeseen circumstances. Additionally, carrier diversification creates the opportunity for businesses to expand their reach, enter new markets, or those that may be under serviced. Embracing a carrier diversification strategy is imperative and empowers businesses to construct resilient, streamlined, and customer-focused operations in a constantly evolving marketplace.

Need help getting started with a carrier diversification strategy or shipping software? Contact our experts today to discover how Varsity Logistics can improve the way your business does shipping.

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3 Ways Online Holiday Shopping is Affecting the Supply Chain

Learning how peak season holiday shipping affects your supply chain can help you better plan for its uncertainty

The holiday shopping season is an annual test of the global supply chain. How the season treats each company depends on how multi-channel inventory management systems service the fulfillment demands of multi-channel customers.

So far, so good. Consumers spent nearly $8 billion online during Cyber Monday alone, a 20 percent increase that day from the previous year. Black Friday shopping alone delivered $6.2 billion in online sales, a 24% hike from 2017. More than 89 million people shopped both online and in stores, which a whopping 40% increase from the previous year.

Driving these numbers are mobile devices. Mobile accounted for 54% of all ecommerce sales on Thanksgiving itself, surpassing sales done via desktop, a historic record. Overall, mobile drove 68% of all e-commerce traffic, up from 62% the previous years.

3 Ways Your Supply Chain is Affected by Holiday Shopping

Besides these impressive numbers, what can supply chain operators learn about the current shopping season that will give them insights into adjusting expectations for next year? Here are three:

1. The holiday shopping season is starting earlier

Now the shopping season is rolling back to include the entire month of November or even earlier. The new start to the season is “Black November” as most major retailers started slashing deals much earlier than usual. Amazon unveiled “Black Friday Deals Week” before Nov. 1. Best Buy, Rag & Bone, Target, Apple, and Walmart all began promotions before this month with messaging that encouraged shoppers to “beat the rush” for “early access” to deals that encouraged earlier shopping than usual.

Both heightened competition and the explosion of ecommerce is behind this. As retailers promised deep discounts, the only response from the competition was to go deeper — and earlier. Increased reliance on online retail made competition tighter. Today a weekend bookended by Black Friday and Cyber Monday has ballooned into a full pre-season going back to the beginning of November or even earlier.

For major brands, opportunity is there because shoppers are there:

  • Investment management firm JLL found that more than a third (34%) of U.S. consumers said they planned to shop before Thanksgiving, an increase from 30% who said they’d do the same last year.
  • The National Retail Federation also reported that while 60% of holiday shoppers are waiting until November, one fifth planned to start in October with another fifth in September or earlier.
  • A 2018 survey by Brand Keys, a research firm, found that more than half (55% ) of respondents said they already intended to shop before the traditional Black Friday kick-off date. The majority of those (25%) said they were doing their holiday shopping in November before Black Friday; 20% said they would shop on Black Friday, 15 percent said they were shopping in October and 15% said they were shopping for the holiday in September or even before. Only a quarter said they were shopping for the Christmas holiday in December.

2. Omni-channel is changing the speed of shopping

Consumers are shopping more because they are researching more — on their phones and even within stores. More leading brands are finding innovative ways to integrate the online and offline shopping experiences. One example is Walmart’s mobile shopping app which is designed as an interactive pocket guide to the store and its promotions. Target’s app enabled mobile checkout to streamline purchasing and reduce wait times. Nike is using data from e-commerce purchasing to determine what it stocks in its brick-and-mortar stores. The intersection between mobile, e-commerce, and in-store purchasing is not just giving consumers more power at their fingertips, it is accelerating purchasing more than ever before.

3. Big Box stores are pushing online promotions earlier — And promising faster delivery too

The shopping season keeps backtracking earlier because big box retailers are making it harder than ever for consumers to pass up bargains at basement prices. They’re also promising consumers to wait less to get goods on their porch.

Amazon is offering free shipping on all orders delivered through Christmas, regardless if you’re a Prime member or not. Target’s website offers free two-day shipping with no minimum order size. Walmart’s online delivery is also offered with two-day free shipping. Kohls is now a pick-up point for Amazon delivery. Even Whole Foods Market is offering Amazon Prime Now pickup and delivery capabilities across the U.S., with curbside pickup in 22 markets.

How Multi-Carrier Shipping Software Can Help

As online shopping continues its path toward becoming the dominant way people shop each holiday season, big box retailers will find more creative ways to compete. That means getting goods faster to front doors at all cost. For supply chain operators, that also means months of preparation time to optimize systems to handle disruptions and to determine the most efficient ways to get goods out the door.

A lot goes into planning for the rush of the holiday season. Don’t go at it alone. Request a Demo from a Varsity Shipping Specialist to learn how Varsity multi-carrier shipping software can optimize your supply chain logistics during peak holiday shipping and beyond.

/ By Varsity Shipping Specialists / Carriers • 3PL/Distribution • Customer Experience • E-Commerce • Manufacturing • Parcel • Retail • Shipping Software • Technology/ / 0 Comments

Zone Skipping: Will it Work For Your Business?

Learn how zone skipping can save money on shipping costs while improving customer experience.

Logistics operators looking to reduce transportation costs and improve transit time might want to consider Zone Skipping, a logistics technique that consolidates individual packages and ships them directly to a parcel carrier’s induction hub that’s closer in proximity to the final destination points of the consolidated packages.

How does Zone Skipping work?

Let’s say you’re shipping 5,000 parcels from Oklahoma City to Detroit at $10 each in shipping costs, which means a grand total of $50,000. The flat rate, however, is $5,000 if they all arrive in a truck. From there, shipping the individual parcels from the Detroit sorting facility will cost $7 per parcel. So, if you add the $5,000 flat rate shipment with the $7 per parcel for local delivery, the total shipping will equal $40,000 — A $10,000 savings compared to using the parcel carrier for shipping the parcels individually.

How can Zone Skipping benefit my business?

Here are 4 ways that that zone skipping can improve the way you ship parcel.

Cost Savings

As explained above, by relying on local delivery for the final zone, operators will cut costs which they then can pass onto their customers. (The savings come from eliminating multiple sort and transfer points.) The saving will not just save your company significant money on shipping, but it will earn you customer loyalty based on a faster delivery time.

Faster Transit Times

Zone Skipping means parcels no longer have to crisscross the country to multiple sorting facilities before they reach where they need to go. Now parcels will go directly to the destination via local carriers. The faster delivery times could allow you more time to accumulate additional package volume when building your zone skipping loads.

Greater E-commerce Capabilities

As e-commerce continue to dominate online retail, operations that get parcels directly to consumers without hassle will be leading the pack. Consumers now have increased expectations for how long an order will show up on their doorstep. Zone Skipping is tailor-made for meeting those immediate needs.

Fewer chances for damaged packages

Another reason why Zone Skipping is good for customer loyalty is because it reduces product damages. This is because it eliminates the number of sorting and consolidation steps performed by the parcel carrier. The fewer hands touching the packages, the greater the chances it won’t be dropped, dented, or damaged.

What do I need to implement Zone Skipping?

Here are 3 things to do before you implement a zone skipping strategy.

Evaluate the areas you serve

Zone Skipping is only cost-effective if you routinely have a large number of parcels going to the same area. How many orders are headed to the same region? How many steps are in your shipping process? Remember, the more steps reduced, the greater the cost savings to your business. Having a system that allows you to turn zone skipping on/off based on current volume is ideal.

Evaluate your internal infrastructure

You’ll need software that can handle the increased capacity requirements that result from Zone Skipping. Because of volume, Zone Skipping may overly burden a more traditional system, which could reduce efficiency and increase labor costs. So make sure your software is still capable of delivering ROI within this new process.

Open a dialogue with your local parcel carriers

These are the people you’ll rely on to make Zone Skipping a success. Partnering with local carriers to design a Zone Skipping strategy is critical in making sure your plan will work. While a reduction in sorting/shipping on your part ultimately reduces the amount they can charge you, good parcel carriers will realize that the increased volume is a significant win on their end.

Zone Skipping with Varsity Shipping Software

Zone Skipping is an effective way to reduce shipping costs and improve customer experience. Discover all the ways Varsity multi-carrier shipping software can improve your parcel processes by scheduling a demo with one of our shipping specialists today.

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Ideas to Improve Supply Chain Collaboration for Vendors and Retailers

Join us as we take a closer look at the 2018 The State of Vendor-Supply Chain Relationships benchmark study

Supply Chain Digest recently published its biannual report that looks at the state of retailer-vendor supply chain relationships. The report is an attempt to get closer to how these relationships are faring in the current moment and what parties on both sides need to make them stronger and more efficient. The editors surveyed over 44 retailers and 165 consumer goods manufacturers including companies like Procter & Gamble, Target, Big Lots, Home Depot, Nike, and JC Penney.

Many recent developments in the supply chain industry were addressed — serialized carton barcode labeling, continuous replenishment, and more — and both retailers and vendors agreed that there is a significant opportunity for both sides to reduce costs and improve customer services versus acting independently or not sharing the same strategies and objectives.

About this Supply Chain Digest Report

You can find the full report here. However, here are the most insightful findings.

  • Nearly all retailers (79%) have compliance programs, an increase from 69% two years ago. Retailers enforce vendor compliance mainly through chargebacks, followed by counseling.
  • Chargebacks are expected to increase over the next five years. Both 43% of retailers and 58% of vendors expect chargeback levels to rise, findings that are higher than the last study.

5 Ideas for Vendors and Retailers

  • While many vendors believe retailers use chargeback programs to generate profit, the survey shows that only a quarter of retailers (23%) say that they use the programs as a profit center. Thirty-five percent say the programs focus on supply chain improvement.
  • Retailers say that advanced ship notice (ASN) is the most problematic area of vendor compliance, followed by on-time shipments, fill rates and labeling. The least problematic area of compliance was vendor drop shipments.
  • Are vendors and retailers collaborating as much as they should be? It depends who you ask. More than half of retailers (57%) said they have high levels of supply chain collaboration with large top-tier suppliers. However the majority of vendors (53%) said characterized the same collaboration as just medium.
  • Retailers say that the greatest barrier to improved collaboration is the lack of actionable data, followed by their trading partners’ lack of knowledge or skill, or their lack of interest in collaboration. Vendors agreed that lack of data was the largest barrier to collaboration.
  • When it comes to technology support to improve compliance or support collaboration, the majority of vendors (56%) have formal vendor scorecard programs; most retailers (43%) said they use an online portal to communicate with vendors.

Improve your supply chain with Varsity Shipping Software

Varsity Logistics is the leading provider of shipping solutions for IBM i (AS400) systems. Request a demo to learn how Varsity multi-carrier shipping software can improve your supply chain operations.

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6 Ways Warehouses Can Save Money By Going Green

Learn how making sustainability a priority can deliver more than just green results.

The warehouse and logistics industries are not immune to the potential savings generated from “going green.” Eco-friendly warehousing may require upfront dollars, but some strategies, like greater recycling, are free. Besides benefiting the environment, the objective is long-term cost savings. Warehouses that embrace the following six practices will discover efficiencies in their operation that are sustainable over time.

Tips for Eco-Friendly Warehouse Improvements

Here are 6 helpful tips for implementing green improvements in your warehouse.

Sustainable Lighting

LED lighting solutions, as well as other advanced lighting technologies, can cut as much as 80 percent from the bottom line, according to Inbound Logistics. Retrofitting your warehouse with LEDs will have upfront costs but considering that they cost much less to operate and the time for replacement is limited, you’ll save both energy and labor costs.

Smarter Identification

Multi-level warehouse rack labels, long-range retroreflective signs, and a greater volume of hanging signage speeds up picking for your workers, which helps cut down labor costs while speeding up order fulfillment.

Smarter Facility Layouts

Using data gained through asset tracking, warehouses can reduce labor and energy costs by redesigning their layouts so the fastest-moving inventory is more accessible than inventory that tends to sit the longest. Warehouses can also make greater use of vertical space. Taking a new look at their space could lead to efficiencies that you hadn’t even considered before.

Explore Energy Management

How efficient are your heating and cooling systems? What about how water is distributed throughout your facility? Are you using low-flow toilets and faucets? It might be worth it to check out energy management systems that integrate the timers, thermostats, and gauges that control the electricity, gas, heat, and water. The right eco-friendly system will help lower overall usage, which leads to savings costs.

Purchase Energy Efficient Equipment

Now that automation is becoming more commonplace in the warehouse and logistics space, what about other equipment that your operations relies on. For example, have you considered electric forklifts that operate without the need for gas and oil? What about other battery- or electric-powered vehicles? According to PBD Worldwide, electric forklifts improve worker health (no toxic fumes to inhale) and result in an estimated savings of $26,000 in propane over five years!

Recycle

This is the low-hanging fruit of going green. Warehouses need to implement recycling initiatives that they can ultimately profit from. What can be recycled? Nearly everything. That includes pallets, crates, totes, cardboard, paper, aluminum, and plastics. Waste can be minimized by reusing packaging materials. But no matter the volume of waste you produce, someone will pay you for taking it off your hands.

How Shipping Software Contributes to Going Green

Shipping software automates shipping, streamlining processes that were once riddled with manual tasks. By automating your parcel shipping process, you’ll remove issues like shipping to invalid addresses, returned shipments, missing shipping dates and more. Every package shipped incorrectly adds time-in-transit, reprinting labels and shipping packages multiple times.

Discover other ways Varsity shipping software can improve your parcel shipping processes by scheduling a demo with one of our shipping specialists today.

/ By Varsity Shipping Specialists / 3PL/Distribution • E-Commerce • Parcel • Retail • Supply Chain/Logistics/ / 0 Comments

3PLs Booming from Stronger Economy, E-Commerce, Space Shortage

A new report reveals the increasingly important role 3PLs are playing in shipping

The third-party logistics (3PL) market is going strong according to a June 2018 report released by Armstrong & Associates, a market research firm located in Milwaukee.

About This 3PL Report

The report found that 2017 net revenues in the U.S. rose to $77.1 billion in 2017, a 5% increase from the previous year. Gross revenues reached $184.3 million, a nearly 11% increase. The net revenue increase repeats a year-to-year pattern of single-digit growth.

Armstrong & Associates Chairman Dick Armstrong said in a statement that 2018 net revenue will likely reach 5%, with gross revenue closer to 10%. “It should be a good year overall,” he said.

The segment largely responsible for the steady growth is Dedicated Contract Carriage (DCC) revenue, which increased 10% in 2017, above its steady annual growth rate of 7% since 1995. Increasing rates and limited truck capacity has helped maintain growth in the DCC segment.

Other segments that were strong last were included:

  • Domestic Transportation Management (DTM). Gross revenues spiked 16% to $72 billion; net revenues were up 6% to $11 billion.
  • International Transportation Management (ITM). Gross revenues climbed nearly 11% due to tight air freight capacity and the growth in global e-commerce. Net revenues increased 4%. 
  • Value-added Warehousing and Distribution (VAWD). Both gross revenue and net revenue were each up nearly 3% due to tight warehouse capacity across the U.S.

Varsity Logistics integrates with IBM i (AS/400) systems to deliver powerful shipping capabilities to 3PLs and beyond. Request a demo of Varsity Logistics multi-carrier shipping software to learn more today.

/ By Varsity Shipping Specialists / Varsity Logistics • Retail • Shipping Software • Supply Chain/Logistics • Technology/ / 0 Comments

You Might Want to Take Notes on Amazon’s New Supply Chain Model

We uncover 4 tips for finding supply chain success from retail giant, Amazon.

While Amazon has been around for almost a quarter of a century, the company’s real breakthrough has come in these past few years with the way they’re challenging the logistics industry. The company is the fastest to reach $100 billion in sales revenue. Analysts say that by 2027 the company could reach yearly revenue of $1 trillion.

4 Amazon Tips to Use in Your Supply Chain Strategy

How it achieved those milestones is because of its supply chain management. Using a sophisticated network of warehouses and transportation, data analytics, and multi-tier inventory technology, Amazon was able to establish itself as a reliable clearinghouse for any product or service now imaginable. Through Amazon Prime and its game-changing two-day delivery promise, speed became its brand. In the process, the company disrupted the traditional supply chain model, elements of which other companies can adopt to achieve success. Here’s how to do it.

Give customers a range of delivery options

Amazon Prime offers a wide range of delivery options, from same-day to three to five days. By sharpening its focus on giving customers the delivery they want and then following through on that promise, the company has been able to brand itself as the only reliable choice in the world of e-commerce.

Fulfill orders immediately

Speed means getting orders out and in the hands of your customers by the quickest means possible. It means processing orders instantaneously. Amazon has done away with cut-off times or lining up packages for late afternoon pick-up. Instead it has created a steady routine of processing and pick-ups to ensure no time is wasted at the customer’s expense.

Outsource inventory management and insourcing logistics

Amazon depends on third-party sellers for niche inventory that is not stored in regular Amazon warehouses. However, despite using some third-party products, Amazon still insources its logistics. All products rely on in-house delivery platforms to achieve all of its delivery promises, therefore speeding up a process that could be slowed if it allowed third parties to handle shipping and delivery on their own.

Establish a mix of warehouses

Amazon has established a network of more than 70 fulfillment centers across the U.S. that are staffed with 90,000 employees. Their model has moved these warehouses closer to urban centers, not remote in some cornfield. This means that its inventory is already close by even before orders take place. Secondly, the company categorizes its storage spaces differently. Its prime storage houses books and magazines; its pallet prime storages full case products with high demand. Another stores high demand products. The reverse storage has irregularly shaped and low demand products. Finally, its random storage area has small items.

Incorporate automation

Amazon was one of the first to integrate automated solutions to its warehouses, even acquiring companies to do so. In 2015, three years after it started, the company was using 15,000 robots; today that number is up to 45,000 robots. The Amazon robots pick and pack without human assistance, which increases speeds.

Those are just a few ways Amazon has created a revolution in rethinking the supply chain. With the development of autonomous vehicles, warehouse drones, and other emerging technology, the company is poised for future innovation. Most companies may not have the scope or budget to match what they are doing, but they can incorporate elements to improve their processes. Customers are optimistic about these changes, with the current desire for instant gratification and quick shipping for online orders. Amazon is driving and supplying this new demand!

Advance your supply chain even further with multi-carrier shipping software. Request a demo with a Varsity Shipping Specialist to discover how we can optimize your shipping process with the #1 multi-carrier shipping software for the IBM i (AS/400) platform.

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