For retailers, keeping shelves stocked with the right products at the right time is crucial for maintaining customer satisfaction and maximizing sales. Disruptions in the supply chain — whether from delayed shipments, inefficient transportation or mismanaged inventory — can lead to empty shelves, missed sales and frustrated customers.
“Retailers must find the ideal balance between efficiency, speed and inventory control. Those are the three critical decision points that drive their cost and output,” said Tracy Urbanski, senior vice president of operations at Penske Logistics.
Retail as a category is extremely broad. “It can incorporate everything from a convenience store to a clothing store, but there are a lot of similarities and general supply chain themes that apply to almost all retail locations,” said Andy Moses, senior vice president of solutions and sales strategy at Penske Logistics.
Third-party logistics (3PL) providers can help retailers in the supply chain optimize their networks and get the information they need to make informed business decisions. Here are four ways 3PLs are helping retailers maximize their supply chain.
1. Increased Visibility
Supply chain disruptions can be detrimental for retailers, making accurate visibility into their products and movement vital. “The first and most obvious issue when products don’t arrive on time is lost sales,” Urbanski said, adding that empty shelves also affect brand loyalty. “If you as a consumer don’t have access to what you want to buy, do you buy something different or do you go across the street to a different store?”
Having a high-level, connected view of the supply chain along with granular specifics helps shippers make data-driven decisions that boost resiliency and improve reaction times if they need to pivot quickly. Penske, for example, monitors real-time traffic and weather information along routes and near customers’ locations to get ahead of potential issues.
2. Network Optimization
3PLs can help retailers evaluate sourcing locations, delivery points and routes to optimize their networks, which can reduce transit times, increase efficiency and uncover significant cost savings. To help reduce delivery times, retailers are increasingly opening distribution centers and shipping smaller amounts of freight, Moses explained.
As part of the network optimization process, Penske can help retailers run various what-if scenarios with different warehouse locations, sourcing options, mode selection and routes to test-drive various solutions.
3. Middle-Mile Expertise
In retail, the middle mile — the journey from distribution centers to retail locations — is a critical link in the supply chain that keeps shelves stocked. “There’s a lot of focus around last-mile delivery in retail, but there’s a huge middle mile in retail,” Moses said.
Delays in the middle mile can ripple through the supply chain, leading to product shortages and lost sales. The middle mile also presents opportunities to streamline the movement of freight. For example, it may be possible to combine shipments from multiple suppliers or warehouses into fewer, fuller truckloads to maximize efficiency and reduce costs.
4. On-Time Deliveries
While on-time deliveries are always important, they can be an even greater priority in retail. “In retail, there are times when they can receive freight and other times when it becomes disruptive and a problem,” Moses said. “It is critical that you’re not clogging up the parking lot during peak customer times and that you have products available for the important surge periods.”
3PLs can help shippers adjust delivery schedules in response to real-time inventory levels, demand fluctuations and store needs. In addition, they may be able to provide value-added services, such as unattended deliveries. With unattended deliveries, professional drivers deliver goods, stock products and handle any reverse logistics needs. They also ensure the facilities are closed up and locked before they leave, so everything is ready for retail employees when they arrive in the morning.
Penske Logistics has many decades of experience in retail transportation and warehousing, serving customers in grocery, convenience, big box and chain retailers. To learn more about how Penske can help meet your retail delivery needs, contact us.