Elastic Logistics: Definition and Benefits
Time to read: 6 minutes Modern eCommerce supply chains constantly look for sustainable and agile processes to meet growing consumer demand. Over the past years, many online merchants have become more familiar with “lean” supply chains. Businesses need to be flexible and responsive to constant market fluctuations. With the help of logistics technology, more online businesses are adopting elastic logistics to deliver products and provide excellent customer journeys.
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Elastic logistics is a means of increasing and contracting logistical capabilities as necessary. Only doing what is needed enhances the cost-effectiveness of the supply chain as a whole. Elastic logistics allows organizations to operate supply chains more efficiently. And its utility is all the more critical with seasonal changes or other variables that require essential operational scaling. While lean or just-in-time business models have prevailed in the eCommerce fulfillment and logistics market, elastic logistics is becoming more prominent.
Elastic logistics provides flexibility for many variables in the supply chain, including delivery schedules, carrier space, container usage, and route optimization. It keeps enterprises better equipped to address possible challenges such as overstocking and unoptimized vessel space. As a result, businesses can enjoy greater stability and remain competitive despite market fluctuations.
Understanding Elastic Logistics
Elastic logistics goes hand-in-hand with supply chain forecasting. It’s instrumental in creating an agile infrastructure that can reduce costs and improve efficiency based on your current supply chain needs. Without elastic logistics, your businesses will often operate less efficiently to provide for higher demand volumes as needed. Elastic logistics is powered by both big data and growing automation.
Automation is an agile, flexible way to increase and decrease an organization’s logistical infrastructure quickly and cost-effectively. Automated solutions and machines, when available, can be deployed as necessary. You only spend to implement the resources that you need. In this sense, elastic logistics is the supply chain’s inevitable evolution by applying newly developed technologies like machine automation and data analytics.
Elastic logistics is becoming more popular among online merchants because it is easy to implement. Its advantages can be taken advantage of through technological solutions. For example, supply chain management software has significantly advanced and now provides logistics companies with accurate, near-real-time visibility of their customer demand. Data analytics of freight traffic are more useful than ever, and volumes are easier to predict within shorter time frames.
Logistics organizations have improved drastically within the past three years. Thanks to supply chain management software, online merchants now have real-time visibility into consumer demand. More than ever, third-party logistics providers (3PL) streamline the purchase and shipping execution processes. Packing teams have more control over how to reach maximum capacity. Modern innovations like container sensors help your staff apply the best stacking and storing practices.
The Importance of Data Driven Decision Making for Business (datapine.com)
Thanks to technology, delivery trucks, ships, and factories can all scale in response to real-time and forecast demand. Automation is the modern technology most frequently associated with flexibility in warehouses. The primary purpose of automated warehouse fulfillment is to satisfy customer demand.
Warehouse automation provides the data required to track inventory movement in real-time, warehouse automation including inventory tracking. Warehouse management systems (WMS) will also be essential.
An inventory monitoring system can also offer historical order data insights to help decision-making around stock replenishment.
Five Ways Elastic Logistics Helps eCommerce Businesses
Agile operations and processes are becoming a necessity for online businesses. Furthermore, the advent of analytics, the Internet of Things (IoT), artificial intelligence (AI), and drones will surely impact logistics. Due to these developments, logistics companies can now be more flexible and reliable. Adopting elastic logistics has become critical with the increasing unpredictability of demand fluctuations and maintaining exceptional user experiences.
1. Automated Processes
The main benefit is automation, the most sensible course of action for a business seeking greater flexibility in its capacity to scale. Elastic logistics helps your business directly adapt to variations in demand by reducing human error. Logistics software and autonomous vehicles provide a more effective packing process in the manufacturing line.
2. Greater Visibility for Control
With elastic logistics, you can handle all incoming and outgoing deliveries from a single dashboard. You can be more productive because you won’t have to switch between several platforms. It also makes managing unforeseen expenses and delivery processes even easier, whatever the shipping option chosen. You’ll also have access to a superior tracking system, making keeping track of every shipment simpler. These systems facilitate instant replies to order status inquiries and expedite warehouse planning for incoming freight.
3. Aids Third-Party Logistics Partnerships
Third-party logistics (3PL) partnerships benefit greatly from elastic logistics. The added flexibility lowers the risks associated with increasing internal operations investment. Businesses may now lease additional warehouses nearby and in remote places to adapt to temporary variations in demand. Additionally, employing 3PLs as external fleets is a great way to keep ahead of unanticipated increases or decreases in customer demand. Elastic logistics offers strong scalability capabilities, which aligns with how eCommerce businesses interact with 3PL suppliers.
4. Enhanced Customer Experience
One clear advantage of elastic logistics is the capacity to scale up or down operations quickly. Businesses can promptly lower risk and costs while ensuring customers receive their orders on time. Elastic solutions increase customer satisfaction as consumers can quickly check for updates and track their delivery in real-time.
5. Route Optimization
The use of artificial intelligence in elastic logistics is excellent for route optimization. eCommerce depends on technology tools and efficient logistical operations to be competitive. Elastic logistics uses transportation management systems to optimize routes and find the most dependable, sustainable, and effective delivery path. Routing outbound orders uses the best path possible, even with projected roadblocks. Deliveries can be planned to minimize the risk of poor weather conditions and expedite delivery times in response to traffic. Your delivery fleets can save costs by using less fuel and improving sustainability.
Implementing Elastic Logistics
You may adjust production lines, product receiving, and dispatch procedures with elastic logistics to meet current demand. With its scalability of the technology, you can freely tweak processes without endangering the facility’s viability or adding to operating costs.
Digital platforms and big data are necessary to create a flexible logistics system. A warehouse management system may examine all of the data gathered at the site. Specific KPIs help identify each location’s consumer patterns, inefficiencies, and ideal stock levels.
Elastic logistics is made possible by seamlessly coordinating supply chain activities, tech-savvy personnel, and technology. The ultimate goal is to create a remarkable consumer experience and gain a competitive edge.
Microfulfillment Points
You can quickly “grow” your storage facility capacity using microfulfillment centers to meet increased demand. When scaling your business, you might first think of spending more to rent out a larger warehouse. However, you might not fully utilize the additional space without incurring even more overhead costs. Microfulfillment entails converting extra space within strategically placed retailers and offices in metropolitan areas. It will ensure faster and less expensive delivery. Place your products closer to your customers while only paying for your needs.
Cloud-Technology
Invest in the latest cloud-based logistics platform with AI and machine learning technology for a successful elastic logistics strategy. These digital tools provide actionable insights derived from real-time data collection. Making better decisions faster helps your business become more resilient. Additionally, fast data transfer improves demand forecasting, planning, inventory control, and end-to-end supply chain visibility. Deliveries and fulfillment methods become effective and economical when everyone along your supply chain is updated in real-time.
Businesses that adopt elastic logistics have a customer-focused mindset often. Creating enduring client experiences is one of their main goals to increase customer retention and obtain a competitive edge.
The rise of elastic logistics highlights online merchants’ need to enhance their operational and procedural agility. Furthermore, the arrival of technologies like analytics, IoT, AI, and drones will undoubtedly influence logistics in the future. The proliferation of these advancements has made innovation a necessity for logistics firms.
In this highly competitive market, becoming adaptable is necessary to stay ahead. Using elastic logistics has become crucial in light of today’s increasing unpredictability of demand. Businesses must also deal with the growing requirement to deliver top-notch customer experiences. While putting elastic logistics into practice may seem difficult at first, with careful preparation, it may prove to be a game-changing tactic for your company.
ZhenHub offers a complete suite of digital logistics services to help your eCommerce business get started with elastic logistics. Scale your business on a global level with our network of fulfillment and distribution partners. Sign up on our website for free and get access to our online dashboard. For more information on how to make eCommerce fulfillment simple, contact our experts online.
