Benefits from Logistical Complexity and Volatility
A company can benefit from logistical complexity and volatility by gaining an advantage over their competitors. The following exemplary factors can influence this competitive advantage:
In recent years, Supply Chains have become more volatile due to major geographic and demographic trends.
Market power has shifted towards the end consumer, which was amplified by the financial crisis.
Maturity of the millennial generation who require individualized products that are delivered immediately and purchased through new channels.
Emerging middle class in the developing markets, which has resulted in a global rebalancing across geographies.
Complexity of growing logistics requirements.
An automotive service parts wholesaler guarantees their dealers and end-customers a 30 minute replenishment cycle.
Suppliers such as Amazon have introduced a distribution center strategy, which allows them to deliver products ordered through their website within two hours.
Retailers such as Walmart have introduced a process to deliver directly from the closest store to a customer when an order is placed online. This requires an excellent replenishment process between the distribution center and the store to avoid stock-out or an out-of-shelf situation.