LIVING LOGISTICS BLOG

    Micro-Fulfillment Centers Part of New Last-Mile Strategy to Make Holiday Season Merry and Bright… for Retailers

    Nov 13, 2020 9:00:00 AM / by Gina Anderson

    Evolving consumer demands are disrupting nearly every part of the supply chain. From a lack of logistical real estate for warehouses, to the shortage of seasonal labor, to increased click-to-door speed, online retailers are seeking innovative solutions for their fulfillment and last-mile delivery requirements

     

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    Since two-day shipping - once considered a luxury – has become an industry standard, many retailers have turned to micro-fulfillment centers to leverage a forward stocking network strategy that will allow them to keep up with the increased demand and delivery timelines, all while saving their overall bottom line.

     

    Micro-fulfillment centers (MFCs) are small warehouses, or sometimes temporary warehouses (think pop-up store model), that are designed specifically to fulfill online orders quickly and efficiently, while being located close to their residential end destination. These are often used to strengthen an organization’s competitive edge when it comes to its overall forward stocking network strategy, leading to increased sales, productivity, control, and profitability. This strategy also streamlines a retailer’s fulfillment process, prevents lost sales and expedites the pick, pack, and ship process for online orders.

     

    MFCs as part of a larger forward stocking location strategy offer key business benefits, most notably the ability to lower your shipping and operational costs. And since many retailers have opened “dark” stores, converting existing unused brick and mortar locations and mall-based stores into micro-fulfillment centers while COVID-19 has forced their physical doors shut, the reduced footprint and decreased distance to a customer’s doorstep is also benefiting the industry’s environmental impact. And with trends indicating 20% to 25% of malls will be closed by 2022, retailers need to consider how they can repurpose these important pieces of real estate before it’s too late.

     

    When implemented successfully, this strategy will optimize the areas of your supply chain that were once lagging - but be aware - micro-fulfillment involves more than merely adding a few conveniently located flexible warehouses to your network.

     

    While the concept is simple, the design and management of a successful micro-fulfillment strategy--including the key element of forward stocking--is complex. Also, to make this strategy work for your organization, it’s important to note how it will affect every area of your business. Start by asking some of these questions:

     

    • How will your current network strategy, from space to staffing, need to be reallocated to allow for this new forward stocking location positioning?
    • How will your large distribution centers and storefronts be impacted?
    • And how can you ensure proper inventory management with these additional locations now being activated?

    The key to success will lie in tying your micro-fulfillment strategy to a clearly-defined goal and objective.

     

    GEODIS | City Delivery partners with retailers to bring this micro-fulfillment strategy to life by providing premium last mile delivery solutions to get stock closer to your customers. Working with a logistics partner can dramatically improve both your delivery timeline and bottom line! Find out how you can get started on adding micro-fulfillment centers to your last mile delivery strategy to be most effective in your order fulfillment processes!

     

    Get in contact with our experts, visit our website: GEODIS | SCO - City Delivery

     

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    Topics: Supply Chain Solutions, Retail, Last Mile Delivery Solutions, City Delivery, Logistics

    Gina Anderson

    Written by Gina Anderson

    Vice President of Solutions & Growth. Gina Manis Anderson is an experienced entrepreneur, executive and logistics expert who’s spent more than 30 years helping Fortune 500 companies optimize their supply chains. A skilled leader and influencer, Gina has earned the respect of a large professional network through her businesses successes and passionate leadership.

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