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How e-commerce retailers and Brexit are changing the warehousing and fulfillment landscape

Total ETO

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Managing a warehouse in today’s manufacturing environment requires more flexibility, resourcefulness and innovation than ever before.

 

The rise of omni-channel fulfillment has created an uncertain supply chain environment that can make it difficult to effectively estimate jobs. In addition, the recent vote in Britain to exit the European Union may potentially have a long-term impact on sourcing materials.

 

Thankfully, warehouse managers can gain a crucial leg up on the competition by implementing an enterprise resource planning solution. Using an ERP helps custom-design manufacturers keep an eye on their projects, ensuring actual costs are staying within estimated ranges.

 

The rise of omni-channel fulfillment

“E-commerce sites are pressuring wholesale distribution centers to handle the fulfillment side of shipping.”

At $4.8 trillion in annual revenues, the size of the wholesale distribution market is staggering, especially considering these are almost 100 percent higher sales than consumer packaged goods, Industrial Distribution noted. Currently, this huge market is undergoing a major transformative shift as e-commerce sites pressure wholesale distribution centers to handle the fulfillment side for many of the products sold online.

 

The traditional fulfillment structure within the wholesale distribution operation utilizes a central distribution center to provide goods and parts within a multi-channel model. This model has been effective for decades, and has provided a process for fulfillment and delivery. The three prongs of the multi-channel model include:

– Store replenishment

– Direct-to-consumer delivery

– Supplying local distributors, which then ship to consumers and commercial clients

 

However, the sustained growth of e-commerce retailers has allowed these companies to leverage their market strength to force wholesalers to transform into shipping points for direct-ship customers. These consumer demands and expectations have given rise to the omni-channel fulfillment model, which better utilizes local and regional distributions centers. Further, the increased usage of digital tracking and sensors has allowed these centers to manage a higher volume of goods and products moving through their warehouses.

 

As wholesale distributors take on a greater role in handling distribution, it may bring potential upheaval to manufacturers who might rely on the same facilities. This could lead to price changes and quicker deliveries. Custom-design manufacturers dealing with these major changes must ensure they have the best enterprise resource planning solutions so they can rapidly adopt budgets as these industry shifts take hold.

Brexit’s impact on sourcing

By voting to exit the European Union in a referendum held in June, Britain now begins the long period of formally abolishing the open borders between itself and the other 27 member states and potentially establishing a new set of tariffs. Experts anticipate the negotiation for this extrication process to take up to two years, and, as noted in Supply Chain Management Review, there’s a chance it might not even come to fruition.

 

“More than 40 percent of the shipping flowing through ports and terminals in the U.K. are EU-related.”

However, manufacturers who source materials from Britain and the EU cannot wait for the dust to settle. If Britain does leave the EU, there will no doubt follow a new wave of legislation on everything from tariffs to international tax compliance to new policies for free movement, which were all governed by EU laws. As noted by the source, more than 40 percent of the shipping flowing through ports and terminals in the U.K. are EU-related.

 

Not only does this hurt manufacturers who source materials from Britain, but for many U.S. and Canadian enterprises, the U.K. has been a gateway into the rest of Europe, due to similarities in language, cultures and business models. New regulations and tariffs may impede the efficacy of using Britain as a focal point for sourcing materials throughout the EU.

 

On the plus side, there is potential for Britain to forge new trade deals with countries around the world, such as China and India. With new agreements in place with these emerging economies, there is the possibility that these new rules might make the U.K. even more attractive for companies to source materials.

 

How Total ETO can help custom-design manufacturers

As major upheavals continue to shake up the warehouse and supply chain sectors, custom-design manufacturers reliant upon these factors for their fulfillment need to be able to handle these changes. Using Total ETO, managers gain access to the granular financial information necessary to ensure they’re capable of quickly responding to any industry shifts as they occur.

 

Total ETO easily integrates with most accounting systems, which lets custom-design manufacturers view all purchases, receiving and payables in a single dashboard across the entire enterprise. In addition, with its early warning job-costing system, all orders, stock allocations and hours logged are reported in real time against the budget, providing an accurate financial assessment from the start of a project through to completion. With greater access to these crucial numbers, engineer-to-order manufacturers can maintain properly allocated budgets during these major changes.

 

Watch our Total ETO product tour or request a demo today.

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