Logistics News

On-demand warehousing ready to be a game changer

Flexibility is the name of the on-demand warehousing game. Sure, it’s in early stages, but the potential is enormous.

Editor's note: This article originally appeared in Supply Chain Management Review.

From Melbourne to Mumbai to Manhattan, it seems the entire supply chain is taking a crack at something new – on-demand warehousing.

Actually, the concept is not as new as the name. After all, who doesn’t know that a fairly successful e-commerce company that has been practicing on-demand warehousing for some time. You know it as Fulfillment by Amazon (FBA).

Companies that sell products on Amazon can use FBA to fulfill those orders. Or as FBA says - “You send your products to Amazon fulfillment centers, and we pick, pack, and ship them and provide customer service.”

Now that is not the only way on-demand warehousing works, but it is the nub of the idea. If you don’t have enough warehouse capacity for your inventory, on-demand warehousing provides a flexible option to store inventory elsewhere for a period of time. 

Or, as Nick Vyas of the University of Southern California puts it, “on-demand warehousing is a game changer for the supply chain. It makes better use of underutilized warehouse assets for companies that need a home for inventory on a flexible basis.”

Vyas goes on to say, “it isn’t a whole lot different than what Uber and Airbnb do in matching people to underutilized vehicles and lodging, respectively.” For more on Vyas’ take on on-demand warehousing, see the NextGen interview.

Just as interesting, companies as diverse as KFC and Exploding Kittens have used on-demand warehousing.

In the case of Exploding Kittens, it is the only way it was ever going to be distributed initially. The company thought it could assemble, pack and ship its first orders at a launch party. Except a million orders flooded in almost all at once. Forget the launch party, enter on-demand warehousing.

Already, there are different flavors.

In one, the company providing the warehouse space also fulfills orders just like FBA. Or, the owner of the inventory might prefer to have its own people on-site filling orders. A third variation is a consortium of companies that efficiently stage inventory and fulfill orders across their private network.

On the operations side, on-demand warehousing is not so tough. Slotting inventory into empty space in a warehouse is manageable. And it’s not impossible to work out the details of who and how that inventory will be managed. The tough part is matching up warehouses with space and companies with inventory.

A tried and true approach here is third-party logistics. It’s a big business. But 3PLs usually want multi-year deals and big space requirements. They typically have no intentions of letting anyone but their own people manage the inventory. 

On-demand warehousing is not a new twist on 3PLs. Flexibility and short-term storage are the hallmarks of on-demand warehousing.

Clearly, 3PLs have quite a different business model. “There is a great void between the requirements of 3PLs and companies that might only need 300 pallet positions for three months,” says Jonathan Rosenthal, CEO of Warehouse Exchange. “This notion of flexible space just doesn’t exist,” he adds.

But Rosenthal and others are trying to change that. He compares Warehouse Exchange, which is in beta, to WeWork for office space. Both offer space and some supplemental services including security. All of the matchmaking is done electronically.

The challenge, he says, is finding warehouses that want to lease space short term. “That’s unfortunate since demand is off the charts,” says Rosenthal.

The claim that demand is strong seems to be confirmed by UPS’ jump into the fray last month. UPS’ Ware2Go platform is targeted at small- and medium-size companies. UPS says its service can handle the entire transaction starting with finding space and ending with fulfilling orders with guaranteed two-day order-to-delivery. Almost sounds like FBA.

Still another approach is a new consortium called MonarchFX. Engineered by long-time supply chain consultant Jim Tompkins, MonrchFX is an alliance of companies that brings together their assets and services. 

Beyond a base of Tompkins International consulting and hardware solutions, MonarchFX is a consortium of warehouse and logistics service providers.

Together, they provide services from design and implementation to operations plus technology and automation as well as delivery. Early members of the alliance include NFI, DHL, Kenco Logistics, Softeon, JDA and Piedmont National. 

However, a company needs to have joined the consortium to benefit from the capabilities of those partners. For many, that is too restrictive.

Clearly, there are several options already in on-demand warehousing. The challenge is to find the one best suited to your business. In any case, rest assured that the next time someone asks you what KFC and Exploding Kittens have in common, you know the answer—on-demand warehousing.

Gary Forger is the special projects editor for Supply Chain Management Review. He can be reached at [email protected].


Article Topics
Amazon   FBA   Warehouse   Warehouse & DC   warehousing   All topics


Comments
You must be logged in to post a comment. Login.

 
Latest Logistics News
New Digital Supply Chains are Powered by Artificial Intelligence and Predictive Analytics
Using AI and machine learning rather than using business-based rules to manage small parcel, ltl, truckload, intermodal, air and ocean shipments, the NextGen Transportation Management Systems bring a level…

Managing Online Shipping & Returns Expectations
How do you offer generous shipping and returns policies on your website to help first-time visitors feel more at ease about buying from an unknown brand, and do so without going broke?

Transportation & Supply Chain Predictions for 2019
For 2019, we believe the U.S. transportation industry and supply chain professionals will place more emphasis on digitization within the supply chain to help them address future complex challenges.

Developing a Less-than-Truckload & Ecommerce Focused Shipping Strategy
Companies must embrace the combined nature of omnichannel to realize its benefits, and the same is true of combined less-than-truckload and e-commerce shipping strategies.


 

24|7 Pro Team

The 24|7 Team is your direct pipeline to solutions for your business challenges. It's your opportunity to have supply chain and logistics experts look at your specific challenges and needs, and give you free, no-obligation advice, solutions, and information.

The 24|7 Team will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

1
  Choose a topic for your RFP

Transportation RFP/RFI

The Transportation RFP is your direct pipeline to solutions for your transportation challenges. It's your opportunity to have logistics experts look at your specific transportation challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect software or system can be an indomitable challenge. Using this transportation/TMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

Warehouse/DC Management RFP/RFI

The Warehouse Management Systems (WMS) RFP is your direct pipeline to solutions for your WMS challenges. It's your opportunity to have logistics experts look at your specific WMS challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect WMS solution can be an indomitable challenge. Using this WMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your WMS Request for Proposal list.

Supply Chain RFP/RFI

The Supply Chain RFP is your opportunity to have logistics experts look at your specific challenges and needs, and receive free, no-obligation advice, solutions, and information. It simplifies finding a pool of likely partners, building your knowledge base, and preparing your Request for Proposal list. The companies in the Logistics Planner have agreed to respond to your request for in-depth information and follow-up, and your request is totally confidential.

Software/Technology RFP/RFI

The Software/Technology is your direct pipeline to solutions for your logistics information technology challenges. It's your opportunity to have logistics experts look at your specific technology challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request. Whether it's WMS, TMS, Mobile or Cloud, our pros can help.

The companies listed below have agreed to respond to your request for in-depth information and follow-up. Your request is totally confidential.

Executive Education RFI

The Logistics and Supply Chain Education RFI can help you identify the schools, coursework, continuing education, distance learning and certification opportunities available from leading logistics educational institutions.

Upgrade and improve your logistics and supply chain skillsets. Whatever route you choose—advanced degree, executive education, certification or distance learning—the time and money you invest in your education today can pay off in continued career success tomorrow. Contact leading universities and professional institutions for the information you need to prepare for the future.

Third Party Logistics RFP/RFI

This 3PL Request for Proposal (RFP)/Request for Information (RFI) can help you find the 3PL and 4PL providers that can meet your specific 3PL service challenges and needs. The 3PL companies below will provide free, no-obligation third-party logistics advice, solutions, and information.

Ask your 3PL questions, you'll get answers. Simply complete the information, and detail your 3PL challenges. Then, check off the third-party logistics companies that you want to review your request.

1. Choose an RFI topic.
2. Enter your contact information and challenge.
3. Select companies and optional categories.
4. Submit.


2

Your Information



Your Challenge, Problem or Request *

3

Select Transportation Companies

  • Select All

  • 3Gtms
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • One Network
  • Pitt Ohio
  • Purolator
  • Quintiq
  • SEKO Logistics
  • SMC3


Select Relevent Categories

  • Air Freight
  • Intermodal
  • Motor Freight
  • Ocean Freight
  • Rail Freight
  • TMS

Select Warehouse/DC Management Companies

  • Select All

  • 3PL Central
  • Apex Supply Chain Tech.
  • Honeywell Intelligrated
  • Kuebix
  • Legacy Supply Chain Svs.
  • Swisslog
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Auto ID & Data Capture
  • Automation
  • Conveyors & Sortation
  • Lift Trucks
  • Packaging & Labeling
  • Pallets & Containers
  • Shelving & Racking
  • WMS

Select Supply Chain Companies

  • Select All

  • 3Gtms
  • 3PL Central
  • Amber Road
  • Apex Supply Chain Tech.
  • APICS
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Frontier Business
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • Logility
  • One Network
  • Purolator
  • Quintiq
  • SMC3
  • Synchrono
  • TAKE Supply Chain
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Global Trade
  • Inventory Management
  • Risk Management
  • Sustainability

Select Software/Technology Companies

  • Select All

  • 3GTMS
  • 3PL Central
  • Apex Supply Chain Tech.
  • BluJay Solutions
  • Honeywell Intelligrated
  • Frontier Business
  • Kuebix
  • Logility
  • One Network
  • Quintiq
  • SMC3
  • Swisslog Logistics
  • Synchrono
  • TAKE Supply Chain
  • Zebra Technologies


Select Relevent Categories

  • ERP
  • Sales & Operations
  • Sourcing/Procurement
  • Optimization
  • Transportation Mgmt
  • Warehouse Mgmt

Select Executive Education Choices

  • Select All

  • Graduate Courses
  • Online/Distance
  • Executive Education
  • Certifications
  • Undergraduate
  • Seminars
  • Associations
  • Conferences
  • Tradeshows


Select Third Party Logistics Companies

  • Select All

  • 3PL Central
  • Landstar
  • Legacy Supply Chain Svs.
  • Purolator
  • SEKO Logistics
  • Westfalia Technologies


4
 

24|7 Company Profiles