Areas of Logistics Essential To Modern Retail Business


Retail companies can only grow if they invest in good logistical infrastructure. Here are five areas of logistics that have a direct impact on modern retail industries.

Order Fulfillment

Fulfillment centers are the logistical hubs used for the packing and distribution of products sold online. A great deal of e-commerce order fulfillment is carried out by third-party logistics companies with access to vast networks of road and rail transport and large central warehouses. For an example of a third-party fulfillment company, check out Huge e-commerce companies such as Amazon run their own fulfillment centers that feature a very high degree of automation. Amazon has come under fire for conditions in its fulfillment centers.

Container Shipping

Container shipping is the backbone of all international trade. In 2017, 1.83 billion metric tons were distributed by container. Most retail companies rely at least in part on container shipping in order to source raw materials and products manufactured abroad. Container shipping has taken over the world’s seaborne distribution scene because of the economy of scale that can be applied to a system where all objects are shipped and stored in containers of the same size.

Manufacturer Distribution

Retail companies need to keep an eye on the logistical capabilities of the manufacturers that provide them with products. It is all well and good having great logistical capabilities of your own, but if the products don’t make it to you in time for the satisfaction of projected consumer demand, then your efforts will have been in vain. Companies need to investigate the logistical might of their potential suppliers before signing any manufacturing contracts.

Demand Planning

Demand planning is a strategic aspect of modern logistics. Like most modern strategic tasks, it is highly data-driven. Market trends, projected growth, and historic fluctuations in trade need to be assessed in order to correctly assign resources. A failure to correctly plan for demand can lead to huge logistical backups. Demand planning is not a pure logistics area. It needs to be coordinated with marketing, accounting, and strategic staff in order to be correctly pursued. celebrity esthetician los angeles

Inventory Management

Inventory management is a crucial element of retail logistics. Running out of stock – or ordering in excess – can severely deplete a business’s ability to turn a profit from sales. In recent years, inventory management has seen an influx of innovation. This has largely come in the form of increased automation and reporting. Machine learning capable software can be linked up with sensors to detect depleting stock and automatically place orders for replacements.

The longer a program of this sort is employed, the savvier it will become to the demand planning aspect of stock management. Automated inventory management is now used extensively by vast companies such as Amazon in order to track and replace their huge quantities of highly varied stock. Smaller companies also make use of the software, which is very efficient at scaling up inventory size without the need for employing more staff to conduct stock checks.