Embracing “Phygital” Using Technology to Leverage Assets for Supply Chain Fluidity

There’s a new trend in how supply chain assets are being evaluated. We’ve all seen a re-emergence of physical retailing and the importance of stores in the post-COVID, e-commerce boom. The buy-online and pick-up in-store (BOPIS), curbside, and ship-from-store strategies that started growing during the pandemic aren’t slowing down. And it’s giving a major tailwind to re-embrace physical assets in a new way for newly formed consumer expectations. The physical is not just being re-embraced for consumer interactions but also further up the supply chain.

So how do brands leverage their current warehouses, fulfillment centers, and transportation relationships to navigate this new “phygital” world? WARP was built to help omnichannel brands reimagine their middle mile and it starts with thinking outside the box (literally). Today’s retailers offer consumers an endless supply of options when it comes to purchasing their goods but that means that they also need to be able to transfer or ship inventory at a moment's notice. They need the latest technology available to maximize their physical locations and facilitate better supply chain fluidity.

Getting Creative with Capacity 

Traditionally the concept of capacity in freight shipping meant that there was a finite number of drivers and vehicle equipment available to move freight at any given time. However, to maximize efficiency and deliver a truly phygital experience, it’s essential to broaden the idea of what capacity means. If retailers and brands are better able to consolidate their loads and consider different modes of transportation, they in turn can reduce the number of vehicles and trips, and reduce the time they need to wait to move them. 

By bypassing the traditional storage process, cross-docking allows products to move quickly through the supply chain, meeting consumers' new phygital expectations. This faster turnaround time enables retailers to handle more goods and respond more efficiently to customer demands. Cross-docks serve as strategic hubs where freight is sorted based on final destination, consolidated, and then reloaded onto different vehicles for onward delivery, ultimately optimizing the delivery process. WARP provides small, privately-owned cross-docks with turnkey technology that allows them to serve more shippers quicker and gives brands more flexibility.

In a traditional hub-and-spoke LTL network, shippers are only able to move their loads via shared truckload until enough other shippers have filled the truck, which is usually a 53-footer. However, new technology has made it possible for shippers to utilize a more diverse fleet of vehicles such as cargo vans, SUVs, or even sedans for freight shipments that don’t need to be palletized. This also opens up the ability to tap into the gig economy for lower pickup and delivery costs. By accepting the value that multiple vehicle types can provide, shippers can optimize their operations for different scenarios like reallocating inventory between two stores to meet real-time consumer needs, ultimately reducing costs and enhancing efficiency.

In addition, companies that own their fleets like Del Monte, Veyer (Office Depot’s logistics arm), and Misfits Market are opening up access to third-party companies to help streamline transportation for both themselves and their partners. By sharing unused truckload space, they can maximize their assets while helping other brands achieve their delivery goals. 

Maximizing Volume 

In today's competitive business landscape, brands and retailers are constantly seeking innovative strategies to boost their revenue streams and maximize their assets. One powerful approach that has gained traction is the concept of shipping goods for other brands in addition to their own. By leveraging their existing infrastructure and plugging in the right technology, companies can unlock a new revenue stream and gain the volume they need to ship their own goods efficiently and cost-effectively, while also fostering collaborative partnerships within the industry.

Brands and retailers typically invest heavily in establishing efficient supply chains to meet their own needs. By extending these capabilities to other businesses, they can utilize their assets more effectively, spreading out fixed costs and increasing overall volume. With more volume, they can respond faster to consumer requests and demands. This collaborative approach not only reduces operational expenses for each participant but also enables smaller brands to access reliable and cost-effective shipping solutions that might have been challenging to establish independently. Moreover, it creates a win-win scenario where both the host brand and the brands utilizing their shipping services can benefit from economies of scale and increased efficiency.

As brands and retailers embrace this innovative strategy, they not only unlock new revenue streams but also pave the way for a more interconnected and efficient future in the world of phygital commerce.

Dynamic Routing 

Traditional freight shipping relies on specific, predetermined routes that remain the same week after week, month after month, and sometimes year after year without taking into account volume changes, access to raw materials for production, weather, and more. Dynamic routing in freight shipping refers to the real-time optimization and adjustment of delivery routes based on various factors such as traffic conditions, weather, order volume, and delivery priorities. Unlike static routing, which follows predetermined paths, dynamic routing allows for flexibility and adaptability in response to changing circumstances. This approach utilizes advanced technology, often supported by algorithms and real-time data analysis, to make on-the-fly decisions that help streamline the entire shipping process. 

In the context of last-mile delivery, dynamic routing is crucial for achieving cost-effectiveness. This segment of the supply chain is often the most expensive and challenging due to factors like congested urban areas, diverse delivery locations, and varying customer preferences. Dynamic routing during the middle mile helps optimize delivery routes to minimize fuel consumption, reduce delivery times, and enhance overall efficiency. WARP takes into account real-time conditions and adjusting routes accordingly, freight carriers can avoid delays, optimize resources, and deliver goods in the most cost-effective and timely manner, ultimately improving customer satisfaction and operational effectiveness.

Long gone are the days when brands could wait to move products until they sold, now they need to constantly have inventory in motion and need the right technology and strategy to accomplish that. The old-school approach to moving freight either by full truckload or LTL is quickly dying out and brands are not going to survive with old-school thinking. 

Finding that balance to manage consumer expectations in a phygital world doesn’t have a be a headache. WARP leverages multiple vehicle types, route optimization, and a network of cross-docks to ensure that pallets and parcels are moved as efficiently as possible and with the fewest touchpoints, resulting in reduced damage while keeping inventory in motion and exactly where it needs to be for each sale.

By
Troy Lester
Co-Founder and CRO

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