The Importance Of Omni-Channel Logistics

The first decade of the 21st century saw countries pursue a debt-fuelled growth. The 2nd decade, in all probability, seems like it is going to be dominated by the logistics sector. A study conducted by McKinsey & Company on International Trade has predicted that by the year 2020 around 80 percent of the goods in the world will be “manufactured in a country different from where they are consumed.” The current statistic is 20%, which means that a four-fold increase in volume of goods transported across the world has been predicted. These figures indicate the increasing reliance of the global economy on the logistics sector. They also highlight the fact that logistics is no longer a mere facilitator but a driver of global economic growth.

Economic

Omni-Channel Logistics: The boom of the e-commerce segment and the advent of smartphones has changed the supply chain landscape of the retail sector. Consumers have options of placing orders either online or offline. This new trend is called Omni-Channel Retail and from a logistics point of view it is important to integrate these online and offline orders in an effective manner so as to manage inventory and minimize costs. This had led to the birth of Omni-Channel logistics. Bob Silverman, Senior Vice President of supply chain and logistics solutions for commercial real estate firm Jones Lang LaSalle notes that “More facilities will be set up handling multiple channels with separate picking operations, replenished from a common

Cost-Effective Solutions

a. Demand for cost effective solutions in the developing world has led to the emergence of third-party logistics (3PL) providers. The outsourcing of logistics function by manufacturing companies calls for greater collaboration between the logistics providers and the companies. Unlike outsourcing in other industries, in the logistics sector the relationship is viewed more as a partnership rather than a customer-client relationship. Supply chain strategies have to be formulated by taking into consideration the functions of the logistics partner.

iv. Education

a. Adapting complex ERP systems to optimize processes but not having the skilled resources to operate the systems is a major challenge for logistics providers as well as software companies. A handful of resources can fulfil the techno-functional roles required in logistics sectors today thus it important to train more resources and make them capable of managing these complex systems. Many logistics providers opt for on-the-job training of employees but the industry lacks experts. There is also a dearth of Data Analytics resources who can interpret information being generated by the