COVID-19 has brought some unprecedented challenges for America’s supply chain businesses. Restrictions on imports, shortage of ground resources, and limited manufacturing operations are causing stiffness in supply chain movement. Meeting the rising consumer demands and managing fulfillment operations is becoming increasingly difficult for companies in E-commerce, consumer goods, pharmacy, and retail supply chains across the United States.
The severity of the pandemic has put supply chains in a fix, and the only way to deal with the emerging problems in logistics, warehousing, and distribution operations is by implementing flexible business practices that are both efficient and cost-saving.
Fulfilling bulk consumer demands of essentials, groceries, and medical supplies through pop-up distribution centers is now a growing trend in warehousing. But what are pop-up distribution centers all about, how do they operate and how can businesses benefit from this distribution model in today’s unusual times?
What are Pop-Up Distribution Centers (DCs)?
Pop-up distribution centers are pretty much like the temporary kiosks that we see at local shopping centers and malls during peak seasons, new product launches, or promotions.
These distribution centers are on-demand, pay-for-use rental spaces that are centrally located to the target consumer market.
Companies can fulfill the dynamic demands of millions of locked down Americans, through short-term leases or the use of a public warehouse or through innovative arrangements with third-party logistics providers. Many retailers and E-commerce companies are now turning to this temporary warehousing system across multiple locations to fulfill demand spikes faster, instead of depending on traditional warehouse facilities.
How can supply chains benefit from pop-up distribution centers
In times when supply chain enterprises are being pushed to their limits to fulfill customers beyond all odds, pop-up distribution centers offer cost-effective last-mile delivery efficiencies. Here are some reasons why opting for a pop-up distribution center could be the best strategy in solving warehousing challenges during the pandemic.
The biggest advantage of pop-up distribution centers is that they run on a pay-per-use or pay-per-period rental model. There are no annual or long-term charges involved. Companies can select the storage space and time frame for which they want to use the warehouse facility and keep paying rent, without having to worry about warehouse maintenance and operating costs. It helps in lowering overall transportation costs, without a major investment in building a warehouse facility.
Proximity to Customers
Traditionally warehouses are located away from residential areas, usually in the city outskirts. Deliveries mostly get delayed with the COVID-19 movement restrictions all around. Pop-up warehousing facilities are usually located within city markets, making it easy for supply chain enterprises to store goods and ship instantly to customers within a few hours. Storing goods in a location that is close to the customer saves time spent on logistics and improves customer delight.
Scalable Storage Spaces
As pop-up distribution centers are flexible in nature, they allow companies to manage their storage space as per business requirements. Retailers and distributors can easily scale up or scale down inventories going into these pop-up warehouses based on customer demands in specific locations.
Inbound and Outbound Logistics
Pop-up warehouses also manage the inbound and outbound logistics for companies, which includes receiving shipments from trucks, trains, and planes coming in the warehouse, loading, unloading, and shipping of packages, and making them E-commerce ready to be delivered to the end customer.
Efficient Last-Mile Logistics
Since inventory is received, managed, and sent out by professionals in warehouse management at a pop-up distribution center, distribution networking becomes more efficient and organized. Based on the type of packages, and the delivery timeline, they are distributed to retail stores or customers directly as needed. They also take care of cross-docking and careful shipping of products that need special conditions, improving the quality of distribution networking and transportation.
With the pandemic situation worsening in the United States, more people are placing orders online, and the demand for faster delivery has substantially increased. 69% of American customers consider home delivery as an essential service to be offered by retailers. Optimized logistics is much needed to flex supply chain practices to suit the evolving shopping trends. Using pop-up distribution facilities could be a smart decision for enterprises in the supply chain to improve last-mile logistics and fulfill customer expectations even during the ongoing crisis.
Locus offers best-in-class supply chain optimization solutions driven by Artificial Intelligence. Get in touch with our logistics experts for a free demo.