Dear Supply Chain Professional;
Warehouse logistics companies are busy across the country. This month, DCA shines its spotlight on the burgeoning Mid-South market, where member company Barrett Distribution is proactively investing in systems, operations and infrastructure required for omnichannel retail service excellence. Feedback welcome — and we hope to see you in Orlando!
Distribution Centers of America – Team DCA
Team DCA Spotlights the Mid-South Regional Market
The Distribution Centers of America (www.teamdca.com), publishes a regular series of spotlights on its fifteen member companies, each a ‘best-in-class’ 3PL providing regional services, together providing national warehousing and transportation services strategically located throughout the US. The following article highlights the Mid-South market, drawn from an interview with Scott Hothem, SVP of Customer Solutions for Barrett Distribution, the DCA member company located in Memphis, TN and providing service throughout the Mid-South.
MEMPHIS ECONOMY IS BOOMING – MAJOR US LOGISTICS HUB
Memphis, Tennessee boasts one of the strongest economies in the U.S., primarily due to the fact that it is such a major logistics hub with five Class I railroads, a large motor carrier contingent, its location on the largest river in the country, and its world-class airport together make it one of the most important logistical hubs in the country. It’s also teeming with a growing network of logistics service providers to take advantage of all that infrastructure; firms that range in size from small to large national (and global) logistics providers that handle almost any kind of product, from agricultural chemicals to consumer packaged goods.
MANUFACTURERS, DISTRIBUTORS INCREASINGLY CHOOSE MEMPHIS
Even for those not driven by the outsourcing trend, the Memphis metro-area is highly attractive. Many manufacturers and distributors have chosen Memphis as a great location for proprietary distribution operations, including giants such as Nike, Pfizer, Medtronic, and Williams-Sonoma, to name a few. Recently, Target announced its intention to be added to this growing list by building a $50 million distribution center that will bring over 400 new jobs to the area.The apparel and footwear sector sub-group of consumer goods, is enjoying business growth in the Memphis metropolitan region. For example, Asics America Corp. added 342,144 square feet to its central footwear and apparel distribution center inside the Chickasaw Trail Industrial Park, pushing its total to 855,144 square feet.
BARRETT BUSINESS IS BOOMING: CONSUMER GOODS ON THE UPSWING
Distribution Centers of America (www.teamdca.com) member company for the region, Barrett Distribution Centers, is working with several new accounts in Memphis in recent months, and overall is enjoying an exceptionally robust, in fact record-setting, growth year.
“Following up on a record 2014, we’re also looking at a great first quarter and 2015,” said Scott Hothem, SVP Customer Solutions for Barrett. “Consumer goods overall have been in an upswing. We’re seeing demand all across the board – food related commodities, health and beauty, apparel, footwear, omnichannel & ecommerce fulfillment. Retailers are building inventory and demand is up. We’ve been very pleased with the level of success we’ve had.”
OMNICHANNEL RETAIL COMPELS OMNICHANNEL LOGISTICS
What is driving the growth in this consumer goods industry sector overall? The U.S. consumer shift to purchasing online, which in turn is fueling ecommerce. In 2011, it was estimated that ecommerce was approaching $200 billion in revenue in the United States alone and in 2013 industry estimates top $380 billion in the United States alone. Those numbers are only growing. At first, it was simply known as “digital retailing” and quickly grew because of the ease for consumers. “The Future of Shopping”, a Harvard Business Review article published in late 2011, rightly observed and reported that as digital retailing grew, it quickly evolved into something so different that it required another name, coined by the article: “Omnichannel Retailing”.
Responding to this shift to online purchases, the consumer goods retail industry must now plan omnichannel sales, marketing and operations. As explained in the Harvard Business Review article, the new ‘omnichannel’ retail reflects the new requirements of retailers to interact with customers through countless channels – websites, physical stores, kiosks, direct mail and catalogs, call centers, social media, mobile devices, gaming consoles, televisions, networked appliances, home services, and more.
Which in turn means that logistics service providers must grasp this reality and invest in the development of teams, processes and people to deliver accordingly. Major providers such as the Memphis home-town ‘gorilla,’ FedEx, are making huge investments to enable direct-to-consumer deliveries & reverse logistics with the recent acquisition of GENCO.
BARRETT INVESTMENTS SUPPORT GROWING OMNICHANNEL BUSINESS
Barrett Distribution Centers is a prime example of a leading 3PL making needed investments to properly serve the growing, demanding omnichannel marketplace. In the past few years, Barrett has invested in everything from physical infrastructure in the facilities to picking/packing workflow automation to improve order accuracy, efficiency & increase daily unit throughput, for its customers moving product through Memphis. “Essentially, we are doing whatever we can do to drive more orders out the door on any given day. We’ve been investing, modifying & enhancing the operations wherever we need to in order to keep up with the growing demands,” said Hothem.
SOCIAL MEDIA IMPROVES CUSTOMER RELATIONSHIP MANAGEMENT
Barrett Distribution is also investing in systems for their internal structure and efficiency. More3PL executives are recognizing how social networking can actually improve their communications. According to a recent InBound Logistics article, the use of social media communication is taking two forms: using public sites such as Facebook and LinkedIn to expose prospective customers to the company and its capabilities, and leveraging tools that use social networking’s basicunderlying technology to talk to closed groups of current customers, logistics partners and other supply chain parties.
The more progressive companies (in any sector), use social media as a forum for education rather than posting promotional content. At the moment, the use of this “social networking” is still more of a marketing and sales tool in the logistics space, but it is moving along in the process of transforming supply chain processes for the better. For example, one could take a look at how Barrett Distribution is using a social platform to improve its internal communication, as part of a first step toward enriching their customer experience. They have invested in the implementation of Yammer, a private networking tool that helps their employees collaborate.
Initially used by the company as a “top-down conduit to push messages out to employees,” Yammer has evolved in such a way for the company that people at all levels are sharing content with each other. It allows their teams to collaborate and share best practices, and for other scenarios such as if a team member has an issue with cycle counting, as an example, then they can reach out to many people for help through this system. It has proven to be very effective in improving communication within the company and Barrett Distribution is currently thinking of ways it can be used in the future to improve relations with their customers. This is just another step for Barrett Distribution in their investment in systems, tools, and people development for better service in an omnichannel logistics economy.
Congratulations to Barrett Distribution on its exemplary performance in 2014, with overall revenues up more than 30% for the year to a new record. Setting the pace, as an example of top caliber DCA 3PL’s, Barrett is investing in its people, systems and technology, actively recruiting and hiring staff and looking forward to another strong year.
Upcoming events for DCA Member Companies — See you there?
2015 Annual WERC Conference – May 3 – 6 Orlando FL