“We have seen the advent of the sharing economy explode—the concept that companies don’t necessarily need to own the entirety of their supply chain,” says David Schwebel, MHI manager, solutions and product groups at MHI. “Consumer’s demand fulfillment immediacy will steadily shift omnichannel verticals into seeing a rise in smaller transports, and that’s where the distributed network comes in.”
Historically, the dedicated internally-owned supply chain has been the most efficient way of supplying products, Schwebel says. It was centered around “the full customer ordered pallet” and maximizing the activity of objects in motion—the entirety of train cars, the round-trip transport lane or completely “maxing out” the trailer space or weight.
“Except that now, the consumer has been trained to ‘think of it now, desire it now, order it now and get it now,’” via making purchases via their phones, he says. They are especially ordering highly divergent products—certain ty pes, quantities, sizes and even complementaries, which means that omnichannel companies must invest in complex fulfillment systems and multimodal small transport, to fulfill these complex orders.
“This creates a dynamic distributed fulfillment network with more forward-reaching distribution centers, instead of having all inventory stored in a centralized hub to be parceled out to retail,” Schwebel says.
By Katie Kuehner-Hebert