A Logistics Evolution in DTC is Part of the New Normal

To succeed in this new world driven by fast-moving ecommerce, ever-shifting customer demands and pandemic-related disruption in retail, smart brands are moving away from a reliance on selling through retailers and going direct.

The financial and brand benefits of the direct-to-consumer (DTC) model can be substantial, but require a dramatic retooling of operational expertise and efficiencies. This includes everything from customer service and experience to returns management, direct merchandising, direct delivery and warehousing and logistics.

As website software improves its capability to integrate directly to warehouse management systems (WMS), more and more companies are eliminating the profit-reducing stages of using a retailer and setting themselves up in DTC.

Trying to process ecommerce “each” orders in the same way they picked pallet and case orders for retail quickly proves inefficient. Without process changes, the cost of picking will be disproportionate to the order value.

Consequently, intralogistics needs to be carefully managed in the DTC model as it’s all about efficiency with higher volume and smaller orders, while satisfying customer demand for shrinking delivery timeframes. A highly configurable and adaptable WMS helps with the competing demands of efficient storage vs. variable order pools, no longer a wave-planned task.

It’s all about perfecting the order flow. An advanced WMS will optimize operations and labor by controlling every development on handheld devices in prioritizing sequence. It will juggle and interweave movements, order pick optimization, route optimization and carrier pickup cut-off times to get the most efficient use of precious resources, delivering savings of around 20% in most areas.

Understanding the importance of material handling at a more granular level is also vital, as companies moving to DTC need software to deliver better data quality, resource allocation and streamlined process flow. This in turn enables simultaneous order picking for further efficiencies, along with the segregation of single-item orders, since the latter can be picked into a tote, cage pallet or trolley. Multiple line orders are key as well, often using a segmented pick trolley.

Furthermore, each order quantity can be directed into its allotted compartment during the pick itself, with multiple compartments where each deposit is confirmed by a tote scan to avoid errors. The trolley or cage then moves to the pre-packing area and a carrier label is automatically printed where required, drastically reducing the time required to match up picked stock with customerorders.

Automated storage and retrieval systems (AS/RS) have grown popular since functionality controlled by the WMS automatically places and retrieves stock quickly and easily, ensuring the right product is in the right place. This enables efficient storage solutions in a better organized fulfilment center, reducing labor costs as picking roles can be freed up and resources allocated to more productive functions.

Carton or tote-sized AS/RS systems can be ideal for storing large volumes of small or similar products in high density. But if this isn’t balanced carefully with the product mix, it can become inefficient, so carefully consider the putaway and re-travel time.

Control via a fully integrated WMS is central, because the cost of AS/RS systems can be high and fit-for-purpose software can bring it all together. The return on investment is fantastic in terms of labor and space saving, but getting it wrong can be an expensive mistake. Make sure you choose a system that can react swiftly based on shifting business needs and customer demands.

Don White is CEO of Snapfulfil

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