DC Velocity - February 2015

4 DC VELOCITY FEBRUARY 2015 www.dcvelocity.com inbound

Report: 3PLs could fight
“commoditization” with
technology

It’s not the Academy Awards, but among warehouse managers, Chicago Consulting’s annual “ 10 Best Warehouse Networks” list is just as eagerly anticipated. Now in its 21st year, the list uses the latest U.S. population statistics to determine which locations offer the lowest average distance and time to market for nationwide warehouse networks ranging from one to 10 facilities. For instance, if you’re looking to serve the U.S. from a single facility, Vincennes, Ind., would provide the shortest time to market, with an average distance to customers of 806 miles and an average transit time of 2. 28 days. For a five-facility network, the optimal configuration would have DCs in Brooklyn, N.Y.; Macon, Ga.; Chicago; Grand Prairie, Texas; and Porterville, Calif., which would result in an average distance to customers of 265 miles and an average transit time of 1. 13 days.

This year, Chicago Consulting has added two new statistics to each of the entries. The first indicates the percentage of the U.S. population within 65 miles of the nearest DC—close enough to guarantee same-day delivery. The second shows the percentage of the population within reach for next-day and second-, third-, and fourth-day delivery.

Principal Terry Harris cautioned that there’s more to DC site selection
than simply finding the location with the shortest time to market—factors
like transportation, labor, and corporate strategy should also enter into the
equation. Still, he said in a statement, businesses of all types continue to
compete on quick responses to customers, and with some two-thirds of the
U.S. economy driven by consumer spending, time to market continues to be
a critical factor in site selection decisions
To see the entire list, go to www.chicago-consulting.com.

The 10 best warehouse networks – 2015 edition

Some of the disruptive technologies and social trends that are affecting society at large are making their way into DCs, according to “Seven trends shaping the future of material handling,” an article in the Q4/2014 issue of our sister publication, CSCMP’s Supply Chain Quarterly.

“Big data,” the Internet of Things, mobility, the tech-savvy millennial generation, advanced robotics, autonomous vehicles, and alternative energy sources are all going to influence material handling— and probably sooner than you think, says author Lew Manci. Manci is vice president–engineering at lift truck manufacturer Crown Equipment Corp.

These technologies and trends—even those that don’t directly relate to material handling—will help drive costs out of the supply chain while increasing the speed and predictability of product movement, Manci contends. “These trends are already finding their way into business applications in a number of industries that will serve as development laboratories and proving grounds for the next generation of material handling technology,” he writes. Material handling managers who begin to develop strategies for these technologies today, he adds, “will be in the best position to transform their disruptive power into competitive advantages for their organizations in the future.”

To read the full article, go to www.supplychainquarterly.com. Seven trends shaping the future of material handling

Third-party logistics service providers (3PLs) may be fighting to maintain relevance in an increasingly com-moditized business, but the game is by no means over. There are still opportunities for savvy 3PLs to differentiate themselves from their competitors, according to a recent report by the research and event management company eyefortransport (EFT). The publication, The 2015 3PL Selection and Contracting Report, is based on a survey of more than 400 logistics and supply chain executives, including both 3PLs and their customers.

What are some of those opportunities? One would be to develop services and expertise in emerging technologies such as augmented reality (think Google Glass), drone delivery, three-dimensional (3-D) printing, and driverless vehicles. In fact, demand already exists for these types of services, according to the study. Forty-two percent of shippers surveyed said they are looking for their 3PLs to have some expertise in driverless vehicles. They also want them to be knowledgeable about 3-D printing ( 33 percent), augmented reality ( 32 percent), and drone delivery ( 30 percent).

Despite the demand, the industry has yet to get fully on board with the concept. According to the survey, the bulk of 3PL respondents do not plan to provide these types of innovative services. However, roughly a quarter of respondents were doing some work with these technologies, and at least a few of them are already providing services around the technologies (with the exception of augmented reality).