Top Five Benefits of Forward Deployment for Inventory Management

Updated April 12, 2024

With customer expectations soaring, traditional supply chain models are evolving rapidly to meet the demands of modern commerce. Enter forward deployment, an innovative inventory management solution revolutionizing the way goods and materials are stored and distributed.

Gone are the days of relying solely on massive, centralized warehouses. Forward deployment embraces a hub and spoke model, leveraging a network of smaller hubs strategically positioned to expedite order fulfillment, especially for last mile delivery. This article explores the profound benefits of forward deployment within the context of the current supply chain landscape.

What is forward deployment?

Forward deployment streamlines order fulfillment processes, enabling businesses to meet the two- to three-day shipping standard with ease. This approach not only caters to diverse inventory forms but also enhances logistics l operations, resulting in quicker deliveries and increased flexibility.

Moreover, forward deployment yields significant cost savings in the long run, offsetting initial investments with reduced travel times and enhanced order processing capabilities. Perhaps most importantly, it fosters customer appreciation and loyalty by consistently delivering on time and exceeding expectations.

Let’s walk through the benefits of this system and demonstrate where it fits into your supply chain.

The current supply chain landscape

The modern supply chain has changed dramatically due to several factors: the long term impact of the COVID-19 pandemic, changing consumer tastes, and wage increases. In decades past, people almost exclusively shopped at brick-and-mortar stores, thus distribution centers were large and centrally located, built to move products to these stores on predictable schedules.

Today, distributors operate in a quite different environment. Here’s a snapshot of what has shifted:

• The rise of e-commerce: A 30% increase in online shopping compared to pre-pandemic levels
• Shrinking delivery times: Over 90% of customers expect two- to three-day shipping as a standard practice
• Growing wages and costs: The rate of hourly wage increases has shot up four-fold compared to its pre-pandemic level

Forward deployment is the ideal solution for these supply chain trends. It provides a faster and more agile system for meeting and exceeding customer expectations while reducing costs.

Improved order fulfillment

When inventory is closer to customers, orders can be processed and fulfilled faster. Businesses can pick the products that are in the distribution center that’s nearest to the purchaser, making that two- to three-day shipping goal that much easier to meet.

This strategy proves effective for a variety of inventory forms, whether it’s oversized skids that need flatbeds and specialized loading machinery or palletized freight on its way to retail outlets. But for this all to work, a regional partner with the necessary bandwidth and experience is vital.

Quicker deliveries

Forward deployment creates more efficient logistics operations, which leads to faster deliveries. Inventory that lives in multiple hubs across a given geographical region allows businesses to optimize local distribution and transportation networks. The last mile of delivery is notoriously challenging to complete efficiently, but hubs placed closer to customers make it that much easier.

Increased flexibility

As customer preferences and market conditions change, so must providers of products and services. Forward deployment allows organizations to redistribute resources quickly to address consumer demand, regional concerns, or seasonal priorities. In years past, a large distribution warehouse on the West Coast would serve customers as far away as South Florida. Now, freight for that same company is staged at closer, regional hubs in places like Atlanta or Baton Rouge.

Lower costs

Forward deployment systems carry some upfront costs, such as hiring staff and building or leasing space for multiple distribution centers. But, long-term, it can save companies money by reducing travel times and fuel costs, while increasing the number of orders that can be processed in a given time.

Appreciative and loyal customers

When consumers receive orders reliably on time, they view the company favorably and are more likely to order from them again. When a company provides remarkable customer service and exceeds convenience and speed expectations, it develops loyal followers who buy more and spread the word about their great experience.

Case study: NordicTrack

Many Ryder Last Mile customers can verify the benefits of forward deployment; one saw particularly strong results because of it. For ICON/NordicTrack, it lowered cycle times of delivery of their pioneering exercise equipment from 20 to 2.8 days in metro areas. It also gave them a 97% on-time delivery rate, and a 56-minute average equipment assembly time.

When the pandemic hit, this partnership proved even more valuable. NordicTrack’s peak season typically runs November to March, but the quarantine triggered a significant uptick in sales that continues to this day. Rob Critchley, senior director of logistics for ICON/NordicTrack, says that the company saw unprecedented growth. Ryder Last Mile’s forward deployment solution managed orders and delivered stellar customer service using hourly communication and daily reports.

A forward deployment partnership

A forward deployment partner that provides your company with state-of-the-art logistics can lower costs, speed up fulfillment, and increase customer satisfaction. Ryder Last Mile has strategically placed warehouses that allows easier access to customers.

Third-party logistics providers (3PLs) play a crucial role in facilitating forward deployment strategies, offering a range of services and expertise to streamline operations and maximize efficiency. Here's how 3PLs can contribute to the success of forward deployment:

Strategic Network Design: 3PLs can assist in designing an optimal hub and spoke network tailored to the specific needs and geographical reach of the business. By leveraging their expertise in logistics and supply chain management, 3PLs help identify the most efficient locations for hubs and determine the best routes for distributing goods to customers.

Warehouse Management: 3PLs operate warehouses equipped with advanced technology and efficient processes to handle inventory management, order processing, and fulfillment. They can manage multiple distribution centers in different locations, ensuring that inventory is strategically positioned to minimize transit times and meet customer demand.

Transportation Management: Coordinating transportation is a critical aspect of forward deployment, and 3PLs excel in managing complex transportation networks. They leverage their relationships with carriers and logistics partners to optimize transportation routes, reduce costs, and ensure timely delivery of goods to regional hubs and ultimately to customers.

Technology Integration: Many 3PLs offer sophisticated logistics technology platforms that integrate with a company's existing systems to provide real-time visibility into inventory levels, order status, and transportation movements. This visibility is essential for monitoring the flow of goods across the supply chain and making data-driven decisions to improve efficiency.

Flexibility and Scalability: Forward deployment requires agility to adapt to changing market conditions and customer demands. 3PLs offer scalability, allowing businesses to quickly ramp up or down their operations as needed without incurring significant fixed costs. This flexibility is particularly valuable during peak seasons or periods of rapid growth.

Value-Added Services: In addition to core logistics functions, 3PLs often offer value-added services such as kitting, assembly, packaging, and returns management. These services can further enhance the efficiency of forward deployment operations and improve the overall customer experience.

Continuous Improvement: 3PLs are committed to continuous improvement and innovation in logistics processes. They regularly analyze performance metrics, identify areas for optimization, and implement best practices to drive operational excellence and cost savings for their clients.

By partnering with a reputable 3PL, businesses can leverage their expertise, resources, and technology to implement and optimize forward deployment strategies, ultimately achieving faster order fulfillment, lower costs, and greater customer satisfaction.

The imperative to meet and exceed customer expectations has never been more pressing. Traditional supply chain models are rapidly evolving to keep pace with the demands of today's consumers, and at the forefront of this evolution is forward deployment. By embracing a hub and spoke model, forward deployment revolutionizes inventory management, offering businesses unparalleled agility and efficiency in the distribution of goods and materials.

FAQs

Does Ryder offer forward deployment?

Yes, Ryder provides forward deployment services and gives companies access to its more than 125 strategically place e-commerce and last mile hubs, bringing you closer to your customers.

What is the difference between forward deployment and freight forwarding?

Forward deployment and freight forwarding are both important components of supply chain management, but they serve distinct purposes and operate at different stages of the logistics process.

Forward deployment refers to the strategic positioning of inventory closer to the end customer in order to expedite order fulfillment and improve overall supply chain efficiency. It involves storing goods and materials in multiple smaller hubs or distribution centers, strategically located to reduce transit times and meet customer demand more effectively. Forward deployment focuses on optimizing the distribution network to enhance the last mile delivery process and improve customer satisfaction.

Freight forwarding primarily deals with the transportation aspect of logistics. Freight forwarders are third-party entities that specialize in arranging the movement of goods from one location to another. They handle various logistics activities such as booking cargo space, coordinating transportation modes (air, sea, road, rail), managing customs clearance, and providing documentation services. Freight forwarding is essential for ensuring the smooth and timely movement of goods across different regions and international borders.

While both forward deployment and freight forwarding contribute to the efficiency of supply chain operations, forward deployment focuses on inventory management and distribution network optimization, whereas freight forwarding primarily deals with the physical transportation of goods.