Elastic logistics is a method of expanding and contracting logistical capabilities as it is necessary, thereby improving the cost-effectiveness of the supply chain as a whole. Elastic logistics allows companies to operate supply chains more efficiently in the face of market fluctuations, scaling up or down depending on seasonal activity or other factors. While lean or just-in-time business models have predominated in the ecommerce fulfillment and logistics space for some time, elastic logistics is becoming more prevalent.
What is Elastic Logistics?
Elastic logistics is the ability to quickly shrink and expand logistical capabilities to align with a supply chain’s demand. Elastic logistics works hand-in-hand with supply chain forecasting, creating an agile infrastructure that can reduce costs and improve efficiency based on the current need of the supply chain. Without elastic logistics, an organization is often required to operate at a less than efficient capacity, to provide for higher volumes of demand as needed. Elastic logistics is being driven both by big data and also by increased automation. Automation is an agile, flexible way to increase and decrease an organization’s logistical infrastructure in both an expedient and cost-effective way. Automated solutions and machines, when available, can be deployed as necessary, and an organization can only implement the resources that it needs. In this way, elastic logistics is the natural evolution of the supply chain with the application of the new technologies—data and machine automation—that have been emerging.
Increased Focus on Technology
One of the reasons why elastic logistics has gained so much popularity in the last few years is because its benefits are only realized through technological solutions. Data analytics of freight traffic are more insightful than ever before, and volumes are easier to predict within smaller time frames. Supply chain management software has moved past its infancy and grants logistics companies better, near real-time visibility of their customer demand. Third-party logistics providers (3PL) make procurement and shipment execution simpler than ever. Even things like container sensors are helping vessels iterate on optimal stacking and storage protocols, giving them better control over how they can achieve optimal capacity. Technology helps manufacturers, vessels, and delivery trucks scale according to both predictive and real-time demand. In warehouses, automation is the new tech most often linked with elasticity. Automated warehouse fulfillment works almost exclusively to meet demand.
Benefits of Elastic Logistics
Automation
The primary advantage comes in the form of automation, which turns out to be the most logical solution for a company that wants to be more flexible in its scaling abilities. Elastic logistics reduces human error and offers a more efficient packaging process in the production line, which directly enables the company to adjust according to the changes in demand.
Efficiency, Visibility and Control
Elastic logistics allows you to manage all the incoming and outgoing deliveries through one dashboard, which directly adds to your productivity as you don’t need to tinker around multiple platforms. This further simplifies control of unexpected costs and delivery operations irrespective of the method being used for shipping. Elastic logistics also offers a better tracking system, which makes it easier for you to track all the shipments. It streamlines warehouse planning for incoming freight and enables prompt responses to order status requests.
Third-Party Logistics
Another advantage of elastic logistics is third-party partnering, which reduces the risks of investing more in internal operations. Companies can now lease extra warehouses both locally and in distant locations to adjust to short-term demand fluctuations. Besides, using external fleets in the form of 3PLs is an effective way to stay ahead of unexpected rise or decline in consumer demand. Thus, elastic logistics provide robust scaling capacities.
Enhanced Customer Experience
All of this improves your ability to rapidly address issues irrespective of how you are transporting the freight shipment. Thus, it results in improved customer experience and customer satisfaction, which leads to increased customer retention.
Bottom Line
The growth in elastic logistics raises the need for businesses to become more agile in their operations and processes. And, there is no doubt the introduction of technologies like AI, IoT, analytics, and drones will impact the future of logistics as well. The increase in these innovations has made it essential for logistics companies to become more flexible and inevitable. With todays rising unpredictable demand fluctuations, along with the increasing need to maintain excellent user experiences, adopting elastic logistics has become an important factor to consider. Although the implementation of elastic logistics might seem daunting, with proper planning, it can turn out to be a revolutionary strategy for your business.
If you are looking for logistics and fulfillment support, we’d love to hear from you. DCL Logistics provides turnkey fulfillment solutions for brands of all sizes. We have a wide variety of services that include DTC and B2B expertise, RMA tracking, carrier optimization, Shopify and Amazon integration, plus international shipping support. Read more about why high-growth brands choose DCL Logistics.
