When it comes to warehousing and fulfillment, traditional supply chains have typically been built on a long-term commitment model.
It works like this: A business either buys or leases a building to meet its warehousing and fulfillment needs directly or partners with a 3PL that leases a building to perform those functions. Getting the facility up and running might take over a year, and then that business will likely be tied down in the same building for five years or more.
This long-term commitment model assumes supply chains are stable and predictable. In today’s market conditions, however, this hasn’t held true. It’s not easy for shippers to determine what will happen in the next five, 10 or 15 years — and getting stuck with a fixed-size facility in a specific location can stifle growth and hinder the ability to adapt to market changes.
“On-demand” logistics isn’t a new concept. The freight brokerage model is a familiar example of it; when the need arises to quickly move freight from A to B, shippers can go to freight brokers who work on their behalf to source available truckload capacity that can get the job done.
Applying the on-demand concept to warehousing and fulfillment is changing the game for shippers. It makes it possible for a business to quickly establish a warehouse and fulfillment presence without a long-term commitment.
Here are five ways on-demand warehousing and fulfillment is helping shippers adapt:
1. Overcome supply chain disruptions.
Over the past few years, everything that could have gone wrong in the supply chain has. Pandemic-driven disruptions, port congestion, labor disputes, severe weather events and high inflation are just some examples. Rigid, fixed logistics networks, multiyear 3PL contracts and long decision cycles have made it tougher to respond to these unexpected challenges.
To overcome supply chain unpredictability, shippers can supplement and diversify their supply chain strategies with on-demand warehousing and fulfillment solutions. This can encompass adding additional locations, capabilities and labor to respond to issues and maintain service levels.
2. Expand into new markets.
Customer demand is continuously changing, and the need for faster and cheaper services and products isn’t slowing down. As a business grows to reach customers in new markets, it’s important that its logistics function expand and adapt to support this evolving customer demand.
On-demand warehousing and fulfillment allows an organization to explore and test without the long-term commitment and risk of the traditional model. At the same time, it doesn’t require capital expenses, so a large financial investment isn’t needed to establish those workloads and presence.
An agile 3PL partner can help organizations set up a distribution point in an area where they don’t have any footprint, sometimes in just 30 to 60 days, as is the case for Iron Mountain. This is because it has the resources and staff in place to allow organizations to quickly inbound their material, collaborate on workflows and put the solution into action.
3. Strengthen your e-commerce abilities.
E-commerce continues to grow exponentially. Merchants of all types and sizes are under pressure to address customers’ continuous demand for e-commerce fulfillment and shortened delivery timelines. With many options out there, customers aren’t likely to shop with a brand again after a poor delivery experience.
As small e-commerce brands scale, they’re faced with the challenge of providing professionalism while creating a solid experience for customers who have increasingly high standards for delivery time and service quality.
On-demand logistics gives businesses the ability to establish an e-commerce function and enter new markets quickly, and having the right partner in the space brings expertise and quality to the short-term warehousing and fulfillment capabilities.
4. Be prepared for demand fluctuations.
Demand fluctuations, especially caused by seasonality, can make it difficult to satisfy consumer demand. With a fixed logistics network, companies may not have the space to store excess inventory without having to buy or lease a building that will sit empty for the rest of the year. On-demand warehousing lets these companies leverage short-term warehouse solutions to stock up on inventory when necessary without long-term space acquisition.
“Everyone operating these facilities loves to see a lot of volume moving through their networks and warehouses operating at 100%. On-demand logistics can provide a shipper with an extension of their facility to work in lockstep with their workflows and proximity,” said John Pelczar, supply chain solutions sales executive at Iron Mountain.
5. Rapidly scale your business.
Many businesses are growing at a rapid pace, one that their traditional 3PL or in-house logistics network can’t keep up with. Companies can continue to scale up their distribution and fulfillment network short term with on-demand solutions while the company works to determine a long-term strategy.
“On-demand logistics allows companies to set up a couple locations in new markets across the country, see how that fulfillment model works inside their network and make an educated decision about what’s best for the future facility footprint they may have,” Pelczar said.
Other businesses want to shrink and consolidate, but they still need access to certain markets rapidly. As the organization shifts, an on-demand warehousing and fulfillment solution can be the “stop-off point” to allow them to assess, evaluate and then make the best decision possible for the business.
An on-demand logistics provider you can trust
Many people don’t think about Iron Mountain as a traditional 3PL. But as a trusted provider of information management solutions, the company has been providing storage and delivery services to businesses for the past 70 years.
As Iron Mountain has expanded to warehousing, fulfillment, e-commerce, logistics and the 3PL supply chain space, it continues to leverage its international presence and infrastructure to build the best solutions for its customers. Iron Mountain’s on-demand warehousing and logistics services help businesses prepare for growth and navigate disruptions.