News Articles

April 7, 2009

How will fuel, transportation costs and the emerging green supply chain impact manufacturing and distribution strategies?

Thought leaders from the Supply Chain Execution and Technologies Group at the Material Handling Industry of America discuss the big issues confronting industry today as well as the emerging solutions.

How will fuel, transportation costs and the emerging green supply chain impact manufacturing and distribution strategies?
SCE, April 7, 2009

Shipping a product was once a cost of doing business. Today, it’s a strategic advantage. How else do you explain offers for same-day and overnight delivery, often for free. What’s more, retailers and manufacturers alike have relied on more frequent and smaller deliveries to reduce their investment in inventory. Will those remain viable distribution and order fulfillment strategies in light of rising fuel costs and the new attention being paid to carbon footprints? Or will new distribution models emerge?

Clark Skeen, Quantronix: There’s something to be said for a new distribution model that includes smaller distribution centers that are closer to retail outlets and customers and to greater specialization that allows goods to reach the market in more efficient ways. But I also think the existing distribution model with large distribution centers serving a region of customers or a division of a company is a model that will continue in the future unless fuel prices become exorbitant. Companies have invested a lot of money in their existing infrastructure. They have a great stake in the structures and strategies they have in place now and they will attempt to make best use of those until it no longer makes sense.   Read more

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