“Porch pirates” don’t confine their larcenous activities to the holiday season, and the cost of replacing stolen packages is a growing part of inventory shrinkage for U.S. businesses. While there are no reported statistics for the cost of package theft, insurance companies and shippers alike are finding that their costs for replacement of stolen packages are increasing each year, as online shopping becomes a way of life for American consumers. The impact of package theft is felt by everyone in the supply chain, from manufacturer to consumer.
One of the least quantifiable effects of package theft is its impact on a brand. It takes a high degree of trust for a shopper to pay for a product without receiving it immediately. As noted by brand consultant Shep Hyken in Forbes Magazine, consumers blame the seller for a missing delivery even though the seller is not at fault. The aftermath of insurance claims and waiting for replacement only adds to the negative experience associated with the brand, making consumers less likely to buy from that seller again. The loss of customer loyalty, and the subsequent loss of future sales to those customers, drives the cost of package theft even higher.
Technology has an answer: smart lockers. Carriers notify the shipper’s server when a delivery is made to a smart locker, and the shipper automatically sends an alert to the recipient, including information about accessing the locker with a one-time code.
Fulfillment leader Amazon took on the “last mile” of the delivery system a few years ago when they began installing centralized secure lockers where consumers could retrieve packages near their homes, instead of having their packages dropped off at their front doors. Recently Amazon announced The Hub, a similar system for apartment residents. Uniquely, The Hub will accept deliveries from any shipper, not just Amazon.
By continuously improving the customer experience with better-secured deliveries, smart lockers are letting Amazon build on its reputation for trustworthiness. It’s a technology that other businesses can put into place with equal effect, wherever there’s a need for secure deliveries – retail, hospitality, universities, multi-family residences. Smart lockers underscore a brand’s customer-centric focus, which in turn builds brand loyalty. Smart lockers are a smart investment that pay you back in improved risk management and positive brand perception. Everyone wins (except the porch pirates).
Concerns about safety and legalities are restricting the use of drones everywhere, except in one rather surprising place: the great indoors of mega-warehouses.
It’s completely legal to fly drones inside a private space, and logistics experts are putting drones to use inside large warehouses to automate certain tasks. Warehouses are finite spaces, and they can be mapped into drones’ programming for highly accurate flights. With the added ability to read RFID tags, drones can perform the mundane labor-intensive “cycle counting” that maintains an accurate inventory.
Walmart, one of the nation’s largest warehousers, has instituted a pilot program (no pun intended) to automate inventory management with drones. They estimate that a drone will be able to accurately check as much inventory in one day as a human employee can in a month – an impressive improvement in efficiency and effectiveness. And there’s the added factor of personnel safety: warehouse employees don’t have to climb ladders or operate lifts to count inventory.
Indoor drone usage isn’t right for every warehouse and every logistics manager. Ceiling height, interior walls, and racking systems all must be considered before moving to drone automation. And drones themselves are not cheap, particularly when spatial programming and RFID readers enter the equation. But for some businesses, it could be well worth the investment. Consult with a storage professional to see if drones are right for your warehouse operations.
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Drones, 3D printing – the past few years have seen innovations that could prove highly disruptive to the traditional supply chain. Lora Cecere, CEO of Supply Chain Insights, serves up her predictions for the 2030 supply chain in this post. The highlights include:
- Autonomous Supply Chain. Sensors, robotics, and GPS combined into an adaptive, cognitive system that automates manufacturing and warehouse management, and reduces heavy machinery downtime through sensors and connectivity.
- Safe and Secure Supply Chain. An automated chain of custody will reduce spoilage, secure hazardous shipments, and guard against fakery in everything from purses to pharmaceuticals.
- 3D Printing. Everything from spare parts to medical devices will be individualized and printed as needed.
- Learning Systems and Network of Networks. Manufacturers, shippers, and consumers will know where any customized order is in the process, at any time, in any place, thanks to supply chain systems that learn cognitively, and a network that talks to all other networks.
What do these changes mean for your business? Is your business ready for this brave new world? And where do storage systems fit into the big picture?
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Warehouses aren’t in the business of manufacturing, so it might seem irrelevant to apply the precepts of Lean Manufacturing to the logistics industry. However, says author Jeff Maree, there are surprising bottom-line advantages to managing a “lean warehouse.”
Lean manufacturing seeks to reduce errors, improve efficiency, and add value – the famous Japanese principle of kaizen, or continuous improvement. Maree, writing in Manufacturing Transformation, outlines five ways to apply the same principle in warehouse management.
- Technology – Barcoding, RFID, AS/RS, and other such systems reduce errors and improve efficient flow.
- Touch – Well-planned and implemented technology reduces the number of times an item is touched. Fewer touches means lower costs.
- Racks – The right storage solution will dovetail with the right technology solution to maximize space utilization, reducing real estate costs.
- Just in time – Tracking inflow and outflow over time lets lean warehouses maintain inventory at just-in-time levels, to keep storage use optimal.
- Partners – From software suppliers to storage providers, the right professional partners will support the lean warehouse in its goal of continuous improvement.
Manufacturers are reaping the financial benefits of lean-manufacturing productivity. Shouldn’t warehouse managers enjoy the same kinds of gains?
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The e-commerce juggernaut shows no signs of slowing, as Target demonstrated when it threw down the free-shipping gauntlet to Walmart and Amazon. Many retailers are finding that their online sales outpace their in-store sales to such an extent that they are reducing their expensive retail space and increasing their storage space – a smart move that saves money as well as accommodating shifting consumer habits. This report in the Toronto Globe and Mail discusses the new paradigm: http://bit.ly/1E7oewL.
The move from malls to mail order raises other questions for retailers, however: Where will their e-commerce products be stored – Overhead lifts? Multi-level industrial shelving? And how will inventory tracking systems function for online-order fulfillment – can an existing RFID tagging system be adapted for fulfillment? If you’re a retail operation making the storefront-to-storage shift, how are you handling the transition? We’d like to hear your story.
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It’s no secret that Amazon’s warehouse management is state-of-the-art. In its pursuit of ever-faster fulfillment, Amazon has started using a robot-assisted picking system named Kiva. Dave Clark, Amazon’s V.P. of worldwide operations, says, “Kiva’s doing the part that’s not that complicated. It’s just moving inventory around.” People do the part that requires judgement, confirming that the item is the correct one (and whether it meets Santa’s standards).
In additional to efficiency gains, one of the great benefits of the robotic system is a net gain in storage space – robots don’t need aisles. Storage racks can be condensed to increase capacity without expanding the warehouse’s footprint – a cost-savings gift that keeps on giving throughout the year. Read the full story at: http://wrd.cm/16KebkB
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