MHI Solutions

Fulfillment

FULFILLMENT UPDATE: Distribution Centers “Popping-Up” Closer

Distribution Centers “Popping-Up” Closer to the Customer to Meet eCommerce Demand

By Katie Kuehner-Hebert—

When it comes to ecommerce fulfillment, it’s all about location, location, location. And that location must deliver speed and agility. That’s why more and more retailers with ecommerce operations are augmenting their traditional larger distribution centers with “pop-up locations”—which can be temporary to handle orders during peak holiday seasons or sporting events, or semi-permanent to permanent to more quickly serve particular growing markets and urban areas.

“A lot of ecommerce warehouse and distribution buildings are increasing, as companies are constantly reducing the amount of time and the cost to fulfill orders,” says Brian C. Neuwirth, vice president of sales and marketing at MHI member UNEX Manufacturing. “We’ve seen a shift in putting distribution facilities as close to the customer as possible, especially for ecommerce businesses.”

There’s been a variety of locations that are specific to the end-customer, Neuwirth says. But many of these facilities are not automated or are just semi-automated, so there is still a good deal of manual operations going on inside of them—just because they may be temporary.

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According to the recently released 2018 MHI Annual Industry Report, “Overcoming Barriers to NextGen Supply Chain Adoption,” eight out of ten survey respondents believe these supply chains will be the predominant model within just five years. However, the report found that the adoption of some of these technologies was slower than originally reported when MHI started the annual report in 2014. The report cites three top barriers to adoption of these technologies: 1. Making the business case for NextGen supply chain investments. 2. Tackling the supply chain skills gap and workforce shortage. 3. Building trust and security in digital, always-on supply chains. This issue of MHI Solutions focuses on the adoption of these digital solutions, from best practices in robotics and artificial intelligence to blockchain and innovations in last mile delivery.

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