As two of the world’s largest retailers, Amazon and Walmart wage a battle royale for supremacy, the role of logistics IT and supply chain automation technology comes into stark relief. What lesson can shippers in all industries – not just retail – take from the recent acquisition of Whole Foods by Amazon?
The short answer: transportation logistics technologies are essential to extending an organization’s advantage over its competitors. Even companies like Amazon, known for pioneering so much of the technology that has transformed the very nature of the multi-billion dollar retail industry, must regard logistics IT investment as a top priority.
An article on this grand competition appearing in the New York Times offers the astute observation that each competitor is furiously working to replace its comparative weaknesses with advantageous practices cribbed from the other. Walmart is investing significantly in improving its online sales capability (which Amazon clearly has down solid), while Amazon is putting big bucks into brick and mortar locations like supermarkets and bookstores (which is Walmart’s strong suit).
Both investment strategies will undoubtedly require some significant changes to each retailer’s logistics processes and practices. For Walmart, this may mean modifying distribution center locations and shipping operations to accommodate increased direct shipping and ship-to-store fulfillment. For Amazon, the foray into grocery will require an education on the specific challenges of the cold chain and all the challenges that come with it. The extent to which each company can flex its logistics IT tech will dictate how successful they will be in besting the other.
The same is true for manufacturing companies, agricultural producers, food processors, mining and energy companies, aerospace and defense builders and any other high volume shipping organization. Companies in any of these industries must look to their largest competitor to see what the competition may be doing better and find a way to provide the same level of service or better.
If it means strategic redesign of the distribution network, then the shipper better have proven logistics IT tools like a TMS and optimizer in place flexible enough to accommodate changes to routes, carriers, shipment sequences etc.
If it means improving the speed of operations, the shipper must engage superior technology for scheduling of shipments – both inbound into production facilities and outbound for timelier product delivery. It may also mean attracting the highest performing carriers to ensure the most efficient, on-time delivery which is accomplished by becoming “shipper of choice” via (among other things) demonstrating a meticulous and fast-acting freight settlement process. Part of this may further involve better overall freight visibility supported by the innovative application of available tech tools like MacroPoint and FourKites. It can also be achieved through more efficient yard throughput which is supported by yard management technologies.
No matter what the business involves, it takes the latest and greatest technology tools to pull ahead of the competition. Is your transportation logistics solution up to the challenge?