Direct to Customer vs Reaching Customer via DCs

Reaching Your Customer in 2022

Companies are looking at new ways to reach out to customers that will give them a chance to stay engaged direct to customers. This gives them a unique touchpoint almost akin to grasping the customers’ hand to feel the pulse. What better way than getting a touchpoint to improve the customer experience.

Thanks to digital technologies and modern material handling techniques, companies can safely implement strategies that give its end customers a good feel of the order handling process of their suppliers.

A good mix of hardware and software working in harmony and interfacing with the business ERP system can ensure efficient order handling processes via Distribution Centers that could benefit all the players in a supply chain – manufacturers, wholesalers, retailers and end users.

Evolution of Digital Supply chain Networks

In the modern supply chain networks where strategies are continuously emerging and evolving all players must show willingness and agility to adopt newer techniques and solutions to deliver value not just to themselves but also to its customers. Currently companies that provide smart solutions to overcome the last mile delivery issues will gain in the battlefield of supply chains.

Latest trends point to emerging practice of Direct to Customer (D2C) over reaching customer via Distribution Centers (DC2C). One must keep in mind that this strategy is not just about eliminating a middle layer in the supply chain. As opposed to this, it is to gain efficiencies just by adopting automation and technology to eliminate a dispensable layer. Economies of scale is a driver to adopt this strategy and hence large players benefit from this.

A centralised warehouse that caters to one or more of the following needs and that implements techniques and solutions using modern digitization technologies will help companies realize this ambition:

• Enough area for storage of a wide variety of products and SKUs.
• A good location that provides access to transportation of inbound and outbound deliveries
• Reasonable proximity to marketplace
• A good potential to adopt digitization technologies to automate the processes and systems with benefit from ROI

Of course, while adopting modern technologies and strategies to drive higher supply chain efficiencies benefit from ROI is a sine qua non while making investment decisions.

Benefits of D2C

Why would a company choose to deliver direct rather than through third-party distributors? The answer lies in gaining direct access to end-users that are its customers. This is especially true for large FMCG players that cry for gaining better insights into its customers’ behavior and use patterns. Companies will benefit by gaining first-hand information and data about their customers thus enabling them to better serve its customers. Data ownership, its use, and security must be respected according to local practices and regulations.

A strategy to deliver direct will demand smart warehousing and logistics solutions that may call for dramatic retooling of operational expertise – from customer service and experience to returns management, direct merchandising, direct delivery, and, of course, warehousing and logistics. Any strategy should result in financial gains as well as an edge over the competition for a business enterprise.

Implementing a D2C model calls for significant changes in the following areas of their warehousing infrastructure – Intralogistics which is the art of managing the flow of materials, products and information within the walls of a warehouse; picking; sorting; storage and retrieval.

A well-designed solution combined with the efficient layout in design and technology will result in improved ROI as compared to a force-fitted solution. Hence enough ideation and planning should form an essential part of any strategy to implement digitized and automated supply chain in a Direct to Customer program.

Technology and Solutions portfolio

One of the key elements of successfully adopting this strategy is to leverage the advanced solutions that deliver efficiency, flexibility, scalability, and safety.

Some of the most automated products & solutions that a completely automated warehouse comprises:

• Mobile robots and driverless forklifts for material movement in a Distribution Centers
• Picking solutions using pick to light, pick by voice and pick by vision technologies
• Dense storage of SKUs using Carton shuttle or pallet shuttle shelving systems
• ASRS solutions using shuttle based and/or crane-based systems
• Order Sortation using Sorting robots
• Powerful software systems to manage all the operations like WES, WMS, and WCS

It is precisely in these areas Addverb Technologies, with its domain expertise of both technology and business processes will provide a full bouquet of products and solutions to meet the digitization program of business to modernize their warehouses and supply chains.

Adoption of technology will result in operational improvements of a warehouse, but the key differentiator is in choosing technology wisely, and here Addverb’s portfolio comes with a promise of delivering results beyond compare.

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