Friday 28th Oct 2016 - Logistics Manager

Could costly hubs disappear?

The need for traditional, costly distribution hubs could be eliminated by using an advanced new logistics strategy, claims Walsh Western International (WWI). The third-party logistics provider has just launched Dynamic In-Transit Merge (DITM) to cut costs in the delivery cycle and improve efficiency by “dramatically increasing the speed at which inventory travels through the supply chain”.

Phil Cocking (pictured), managing director of WWI UK, explains the reasons behind the new concept: “Many companies merge orders at production or alternatively run a centralised warehouse in which products sit until they are needed for an order. Logistics providers need to focus on further increasing inventory velocity by using regional distribution hubs and delivery cross-docks as merge points. The demand for quicker delivery at a reduced cost is ever increasing and companies must be prepared to meet their customers’ needs.”

DITM increases the speed of the merge process by ensuring suppliers are shipping or building to order rather than to forecast. As soon as they are produced, components can be picked from different distribution hubs and then shipped directly to a cross-dock closest to the customer for consolidation into complete orders. Static inventory is replaced by inventory in motion with components spending less than 24 hours in a cross-dock, rather than 20 days in a warehouse.

WWI says that this concept “improves efficiency and reduces or eliminates the need for costly warehouse space”.