Your Warehouse in the Sky

Your Warehouse in the Sky
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Your next online order may drop from a warehouse in the sky.

No, really!

Just look up. You see that airship? No, it is not the Goodyear blimp. Its Amazon's flying warehouse or airborne fulfillment center (AFC). It's dropping off your package from that drone you see coming your way. After completing your delivery the drone will catch the next nearby shuttle to take it back to the blimp.

The ongoing strategy for Amazon is to get products into the hands of buyers as fast as possible.

Amazon's AFC patent just recently became public. While the drone concept is not new any longer, however, the designs reveal more detailed information about how the drones will be used in conjunction with the airship.

So one way this will work is that the AFC will hold stock for a specific event and be stationed nearby such as a sporting event or concert. It may have a refrigeration center for restocking food as well as sporting merchandise for a scheduled delivery, such as the demand for caps and sweatshirts. It could also be used to advertise an event nearby.

The filing revealed that the shuttles and drones would operate in an overlay fashion and send data back and forth about current weather conditions or other atmospheric information that could impact the delivery process. It could also relay new routing information such as delivering a just-purchased eBook.

Popup fulfillment centers

But wait, there's more when it comes to the wide world of online shopping and delivery.

Another new element is pop-up warehouses for retailers to support short-term buying cycles, such as Christmas and summer. Unlike the airships, temporary fulfillment centers are not out in the future. They are springing up now. It's all about reducing the cost of the "last mile" delivery. Temporary fulfillment centers make a big dent those costs. Popup warehouses can:

•Can scale up or down depending on the season and market.
•Delivery products more quickly.
•Improve replenishment.
•Cut transportation costs significantly.

Additional benefits of temporary locations include fast, low-cost delivery to customers. It is a way to add capacity when needed and takes half the time to set up and a fraction of the cost. No long term leases involved.

The top three cities during peak shopping time are Seattle, WA, Edison, NJ and Indianapolis, IN.

Uberization of ground delivery

On-demand transportation has taken another bite out of the cost for ground shipment.

At a moment's notice, trucks can be deployed to pick up products and get it to the customer for in-store pickup or same day delivery. It's expensive to send trucks from store to store without knowledge of the needs that also deal with unexpected road and weather circumstances. If that part of the service can be postponed until the trucks are needed, it saves a lot of money. Instead, retailers are looking for options from such companies as Cargomatic or Convoy, trucking companies that offer on-demand services.

Building a transparent supply chain

As a whole, supply chain delivery services and inventory management have taken off big time in the past ten years. Today, new innovations in inventory and networked optimization tools offer higher levels of visibility to control what is where in the supply chain, giving organizations much more control.

Newer technologies manage control and centralize data from one or more warehouses, compiling all data into one system.

Inventory is a major expense for most organizations that sell a physical product. Therefore, it is imperative they keep a close look at product levels. Newer technologies allow companies to track and manage procurement along the way. Robotic systems are highly efficient in the warehouse industry. Programs options manage receiving and returns as well as assist with forecasting and planning. For the food industry, robotics can track spoilage and "sell by" dates.

Pulling together airships, drones, on demand trucking and warehouse robotics would seem to eliminate troublesome areas of online and catalog orders. The technology for reducing errors and keeping better records is clear, but there is still a need for human activity. It takes a human to fulfill a single order faster than a robot.

The costs of the software technology for the airship, warehouse systems (fixed or temporary) and robotic systems are still significant. What can be saved is the time and reduction of errors in managing thousands of SKU's minute by minute.

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