Dynamic product valuation; are B2B and B2C ready to value their products like commodities—where accessibility, deliverability, location and availability are considered on parity with the intrinsic value of the product produced? Or—SHOULD they value their products as commodities?
It depends, says Shana Relle, marketing director, global marketing—logistics and material handling team at MHI member Intralox LLC.
“As the importance of the item purchased is high or the complexity is high, companies are still able to differentiate their brand,” Relle says. “What is the company like to work with from purchasing through post-sale? How does the company react if there is a problem with the product? If the value of the product is high to the purchaser, there are always factors other than price that influence the purchase.”
Adam Brown, market development director at MHI member Dematic Corporation, says the question should not be of intrinsic value or commodity of a product, but how much net profit can be achieved in the overall supply chain.
“The supply chain is really where the overall net profit war is being waged,” Brown says. “Either through 3PLs or in-house fulfillment, companies are always looking for the lower ‘price per piece’ to help in their bottom line.”
Automated systems—either human or mechatronic—can assist in reducing this cost, but it also reduces the risk of the supply chain as the products gets closer to the end-consumer, Brown says. Automation can help regulate instabilities in staffing and fulfillment demand, as well as provide more accurate inventory control, which can provide feedback into manufacturing and maintain expectations of customers ordering the product.
By Katie Kuehner-Hebert