Elastic Logistics Explained

Businesses used “lean” practices to streamline processes while increasing value to customers. The goal was minimized waste, increased customer satisfaction, contained costs and continual improvement. These goals are still important but more unpredictable supply and demand, combined with the ever-increasing speed of business, require a different approach. That’s why Elastic Logistics is increasingly popular today. 

What is Elastic Logistics?

Elastic logistics is the flexibility to expand and reduce capabilities to accommodate changing demands within the supply chain. It’s the agility to handle sharply increased and decreased needs in production, warehousing and shipping while controlling costs, efficiency, visibility and customer experience. The ability to scale operations as needed without long-term investments is key to accomplishing this type of adaptability.

Elastic Logistics and Festive season

Elastic logistics is the ability of sourcing and logistics providers to expand and shrink their capabilities across geographies in response to market and demand fluctuations, changing consumer preferences, and socio-political changes.

During festivals or other special occasions, the normal supply-demand cycle of products goes for a toss. For example, during the Diwali season, e-commerce players and retailers face a sudden surge in demand. To cope up with this sudden burst of demand, companies often hire additional staff or add extra hours of work to the existing personnel. However, the number of personnel to be hired and the additional amount of deliveries in the extra hours are factors that are only estimated by supply chain managers based on their experience and intuition.

Even though the estimate can be correct for a typical day, the festive spike in demand means that there is a good chance of the predictions going haywire. In such a situation, a shortage of personnel can affect the delivery, and an overabundance of staff can lead to extra costs for the company.

Benefits

With the use of elastic logistics practices comes efficiency, control, visibility, customer satisfaction and the ability to scale quickly. Managing all incoming and outgoing deliveries through one dashboard increases efficiency. No need to toggle between multiple platforms. This also simplifies control of delivery operations and unexpected costs, regardless of the shipping method being used. Enhanced visibility makes it easy to keep track of all shipments. This simplifies warehouse planning for incoming freight and allows quick responses to customer order status requests. Elastic logistics automates the carrier selection and dispatch process based on preferences and goals. As a result it’s possible to quickly and efficiently scale shipping processes as needed. All this creates the ability to rapidly address issues as they arise, regardless of how the freight shipment is being transported.  It produces a superior customer experience and increases overall customer satisfaction. And that leads to customer retention, which is key to maintaining consistent business growth. 

How to make your logistics operations more "Elastic" ?

A great way to start making your logistics operations more “elastic” is to use a transportation management system (TMS) in your business. Additional automation in your warehouse may be appropriate to streamline the packing of orders, without increasing staffing, as demands fluctuate through the year. If additional warehousing is needed locally or in different regions during certain period, a third party is an excellent option. To avoid increasing a company-owned fleet to then experience a decreased demand, partnering with a third party is a great solution here as well. In the not-too-distant future, technological advancements will further enhance logistical elasticity. Things like advanced analytics, artificial intelligence, machine learning, and IoT connectivity will come into play. Some of these trends are already becoming more common.

With today’s increasingly unpredictable demand fluctuations combined with the need to maintain excellent customer experiences, remaining elastic in logistics operations is more important than ever. An easy way to begin implementing these practices is by partnering with a third party logistics provider. This simplifies the transition by leveraging their resources and expertise to make your logistics operations more elastic.