By definition, being flexible is “characterized by a ready capability to adapt to new, different, or changing requirements.” In a world fueled by technology - where the pace of change is only increasing - this is incredibly important. Especially in retail. The playing field changes every day, key players aren’t even the game anymore—making flexibility not just important, but imperative.
Retailers and brands must be able to adapt and change to evolving market circumstances and meet ever-changing customer expectations. If not, they risk becoming another casualty of the “retail apocalypse.” Amazon’s recent announcement doesn’t help. The move to Prime one-day shipping is putting new pressure on retailers to get in the game.
To be adaptable, turn to your supply chain and the inherently inflexible distribution network that supports the movement of goods. Building flexibility into your supply chain has moved from a “nice-to-have” to a “must-have” as the rapid pace of change has made reactivity and responsiveness essential to survival.
What is network flexibility?
Network flexibility is the degree to which you can scale and change your distribution network to respond to market demands; for example, adding new fulfillment centers to support new markets or adding capacity to manage peak season demand.
There are two primary ways network flexibility gives retailers and brands an advantage: Handling supply chain disruptions and enabling future growth.
1. The flexibility to manage supply chain disruptions
Supply chain disruptions are inevitable. And, they come in all shapes and sizes: Inclement weather, natural disasters, tariffs, mergers and acquisitions, and price fluctuations are just a few of the unexpected challenges that can pop up. In fact, 74% of retailers and brands deal with inventory fluctuations and 2018 saw record-high rates of supply chain disruptions.
It’s more difficult to react quickly to supply chain disruptions without a flexible solution for managing them, which can put you at risk. Vetting new warehouse providers takes time. Integrating systems takes time. Onboarding and implementing new processes takes time. Time that you don’t have when dealing with unplanned problems.
Having a flexible logistics network makes it possible to mitigate supply chain disruptions with access to available warehouse capacity and fulfillment services, a simple-to-implement technology platform, and a team of experts to partner with.
2. Flexibility makes new initiatives and future growth possible
On the other side of the equation, new initiatives are difficult to execute without the agility of a flexible logistics network. In order to enter new markets, roll out products, and meet changing market demands (think: Amazon one-day shipping) you need a network that can adapt.
Retailers and brands with flexible logistics networks can reduce their last-mile transportation times (and delivery costs) by adding more locations to their network when they want to improve their delivery promise.
In addition to market expansion, on-demand warehousing gives you more agility to run seasonal product promotions, pop up temporary fulfillment centers, and test new markets.
Capabilities of a flexible distribution network
Without a flexible logistics network, it’s harder to stay in the game. Innovation is clunky and cumbersome. Creating flexibility in your warehousing and fulfillment network opens up a range of capabilities that are not otherwise possible. With a flexible solution, you can:
Easily expand your network as needed
To have flexibility within your logistics network, you either need a lot of locations, or access to an extensible network. Instead of managing a large network of locations, tapping into a network gives you greater options (and flexibility) to respond to market changes and supply chain disruptions. On-demand warehousing and fulfillment provides access to a network of providers with available capacity and services in every market. This allows you to do things like add locations to improve the last mile of delivery, solve for unexpected inventory overflow situations, pop up additional capacity to support new product rollouts, and run regional promotions.
Scale and grow with an integrated system
Flexibility hinges on your ability to scale. How well your systems are connected significantly impacts scalability. With an integrated warehousing solution, you can save time and costs associated with warehousing and fulfillment implementations, create simplified workflows, and automate reporting. Expanding your sales channels is simple when you know you can support partner requirements across different retailers, eCommerce platforms, and online marketplaces.
Have full visibility into your network performance
If you lack a way to holistically view inventory and orders across your entire fulfillment network, or have a time lag on those reports, you’re unable to be responsive to problems as they arise. Being flexible relies on visibility into performance. Without information, it’s impossible to respond to issues, let alone get ahead of them. Highly flexible networks have real-time reporting on network performance and quality including inbound/outbound shipment statuses, inventory levels, order data, and warehouse KPIs such as on-time ship rate and order fill rate.
Maintain control over your peak seasons
Even though the need is anticipated, many retailers and brands have difficulty managing their peak season demands for more capacity and resources. When you have the capability to add additional warehouse capacity and fulfillment services, where and when you need it most, you can address peak-season requirements more efficiently.
Now, more than ever, flexibility is necessary to ensure and sustain growth. The retail apocalypse has already proved that meeting today’s standards isn’t easy; imagine what the industry will be like ten years from now. To succeed, companies will have to continually adapt their retail and logistics models. Flexibility within your distribution network is a key component in your ability to do that.