Top Five Benefits of Forward Deployment for Inventory Management
Ryder Last Mile|Blogs
One of the largest expenses when shipping materials, equipment, or goods long distances is transportation. Customers expect fast, efficient deliveries whether your company operates on a service-level agreement to a B2B partner or direct-to-consumer.
Forward deployment is an inventory management solution that uses a hub and spoke model to store and distribute goods and materials. Rather than relying on a single, large warehouse, hub and spoke uses a system of smaller hubs to receive, sort, and ship orders to customers more quickly.
Let’s walk through the benefits of this system and demonstrate where it fits into current supply chains.
The current supply chain landscape
The modern supply chain has changed dramatically due to several factors: the long term impact of the COVID-19 pandemic, changing consumer tastes, and wage increases. In decades past, people almost exclusively shopped at brick-and-mortar stores, thus distribution centers were large and centrally located, built to move products to these stores on predictable schedules.
Today distributors operate in a quite different environment. Here’s a snapshot of what has shifted:
- The rise of e-commerce: A 30% increase in online shopping compared to pre-pandemic levels
- Shrinking delivery times: Over 90% of customers expect two- to three-day shipping as a standard practice
- Growing wages and costs: The rate of hourly wage increases has shot up four-fold compared to its pre-pandemic level
Forward deployment is the ideal solution for these concerns. It provides a faster and more agile system for meeting and exceeding customer expectations while reducing costs.
Improved order fulfillment
When inventory is closer to customers, orders can be processed and fulfilled faster. Businesses can pick the products that are in the distribution center that’s nearest to the purchaser, making that two- to three-day shipping goal that much easier to meet.
This strategy proves effective for a variety of inventory forms, whether it’s oversized skids that need flatbeds and specialized loading machinery or palletized freight on its way to retail outlets. But for this all to work, a regional partner with the necessary bandwidth and experience is vital.
Forward deployment creates more efficient logistics operations, which leads to faster deliveries. Inventory that lives in multiple hubs across a given geographical region allows businesses to optimize local distribution and transportation networks. The last mile of delivery is notoriously challenging to complete efficiently, but hubs placed closer to customers make it that much easier.
As customer preferences and market conditions change, so must providers of products and services. Forward deployment allows organizations to redistribute resources quickly to address consumer demand, regional concerns, or seasonal priorities. In years past, a large distribution warehouse on the West Coast would serve customers as far away as South Florida. Now, freight for that same company is staged at closer, regional hubs in places like Atlanta or Baton Rouge.
Forward deployment systems carry some upfront costs, such as hiring staff and building or leasing space for multiple distribution centers. But, long-term, it can save companies money by reducing travel times and fuel costs, while increasing the number of orders that can be processed in a given time.
Appreciative and loyal customers
When consumers receive orders reliably on time, they view the company favorably and are more likely to order from them again. When a company provides remarkable customer service and exceeds convenience and speed expectations, it develops loyal followers who buy more and spread the word about their great experience.
Case study: NordicTrack
Many Ryder Last Mile customers can verify the benefits of forward deployment; one saw particularly strong results because of it. For ICON/NordicTrack, it lowered cycle times of delivery of their pioneering exercise equipment from 20 to 2.8 days in metro areas. It also gave them a 97% on-time delivery rate, and a 56-minute average equipment assembly time.
When the pandemic hit, this partnership proved even more valuable. NordicTrack’s peak season typically runs November to March, but the quarantine triggered a significant uptick in sales that continues to this day. Rob Critchley, senior director of logistics for ICON/NordicTrack, says that the company saw unprecedented growth. Ryder Last Mile’s forward deployment solution managed orders and delivered stellar customer service using hourly communication and daily reports.
A forward deployment partnership
A forward deployment partner that provides your company with state-of-the-art logistics can lower costs, speed up fulfillment, and increase customer satisfaction. Ryder Last Mile has strategically placed warehouses that allows easier access to customers.