How 21st Century Retailers Manage Their Logistics


Ever wonder how the market leaders do it? After all, they have to be doing something differently to keep their market-leading position, don’t they?

We can’t go down the full list of everything they do. But we can discuss how they might manage their logistics.

  1. Cross Docking

Most inventory gets received, stored, picked, and shipped. With cross docking, you receive and ship while skipping the storage and pick part of the process.

Unless you have a high-volume warehouse or receiving center, this one’s tougher to pull off. If you don’t move high volumes of product, you have to receive and coordinate with the shipper. Hard to pull off, but the best companies make it happen anyway.

  1. Many Outsource Their Logistics to a 3PL

Decades ago, “third party logistics” meant having someone else do your transportation and warehousing for you. Some 3PLs still view their services that way, but they’re getting left in thecu dust.

Today’s 3PLs use complex software to give you more value than you can give yourself. And you can outsource just about every possible aspect of your logistics to them.

  1. Advanced Picking Systems

Picking today looks nothing like the picking of yesteryear. Today, pickers wear a small portable computer with a headset and microphone. They get commands through the headset. Then the operator must read a check digit back to the computer to confirm they picked the right box.

With voice picking, some sources say you can have a true accuracy rate of 99.9%. If you have 99% accuracy, that’s a .9% gain, which is significant for any company.

  1. The “5S” Method Prevails

What different companies mean when they use the term “5S” varies sometimes. But in general, it refers to:

  1. Sort (pretty straightforward here)
  2. Set in order (actually putting your system of organization in place)
  3. Shine (cleanliness)
  4. Standardize (the means by which you keep the first three “Ss” in place
  5. Sustain (discipline – doing this repeatedly over time)

In most companies, a sixth “S” gets added on: safety.

  1. Choosing the Right Metrics to Focus On

Everyone measures these days. But, it’s more important as to what you decide to measure. Your metrics must measure your progress against your goals.

For example, you might measure customer service with the percentage of deliveries that happen on or ahead of time. Or, you might look at how much of the inventory you ship gets damaged while in your possession.

Sounds simple, but many companies have trouble doing it.

Those are some tactics and techniques leading companies use to manage their logistics. Do you use those techniques?