Chain Reaction is Sourcing Journal’s discussion series with industry executives to get their take on today’s logistics challenges and learn about ways their company is working to keep the flow of goods moving. Here, Ninaad Acharya, CEO and CPO of Fulfillment IQ, discusses how the e-commerce fulfillment company helps brands and retailers create resilient and efficient logistics operations to withstand the fluctuations of the global market.
Name: Ninaad Acharya
Title: CEO & CPO
Company: Fulfillment IQ
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What industries do you primarily serve? Which industry do you think has the most to teach fashion about improving their supply chain logistics?
Fulfillment IQ is a leading supply chain technology company that provides software development and implementation services to major brands and Fortune 500 companies such as Nordstrom, Foot Locker, Gap, United Natural Foods, Glossier, Stord, GXO and more.
Industries such as automotive, general merchandise and pharmaceuticals manage a diverse array of products, each with unique logistics requirements. These sectors excel in handling complex challenges like managing extensive product lines and varied product dimensions with precision. The fashion industry can learn significantly from these practices, particularly in how to efficiently manage large volumes of items and the logistical nuances associated with them.
What are the main things brands and retailers could do (or stop doing) right now that would immediately improve logistics?
Brands and retailers can significantly enhance their logistics efficiency by reassessing their transportation strategies and service levels. Many companies can find immediate cost savings and operational improvements by analyzing their carrier mix and shipping policies. For example, instead of defaulting to expedited shipping options, companies could explore the feasibility of extending delivery timelines slightly, which can dramatically reduce shipping costs without significantly impacting customer satisfaction. This requires conducting customer surveys and A/B testing to gauge the impact of longer shipping times and identify a balance that maintains customer satisfaction while optimizing costs.
What area of logistics isn’t receiving the industry attention it deserves?
A crucial aspect of logistics that often goes overlooked is labor management. Despite being a foundational element of successful operations, this area hasn’t evolved as quickly as others, such as transportation or warehousing technology. Effective labor management involves more than scheduling and task assignment; it requires integrating advanced technology to enhance productivity and job satisfaction, directly impacting overall operational efficiency.
When it comes to creating efficiencies, there are quick wins and longer plays. What are a few things your company is doing to help its partners succeed on both fronts?
Our company occupies a unique niche in the logistics sector, focusing exclusively on supply chain efficiencies. This dedicated approach allows us to swiftly identify opportunities for immediate improvement in operations, distinct from larger, more generalized firms that spread their expertise across various sectors. By concentrating solely on logistics, we can quickly implement changes that often result in significant cost reductions for our clients right from the start.
For quick wins, our strategy involves conducting thorough assessments of our clients’ warehouse operations. By analyzing workflows and operational setups, we can identify and execute straightforward adjustments that typically lead to at least a 5 percent cost saving in the first month alone. These adjustments are not just about cutting costs but enhancing the efficiency and responsiveness of the entire operation.
What is the one thing brands and retailers could be doing to make better use of technology to improve logistics?
To significantly enhance their logistics operations, brands and retailers should first focus on implementing effective demand planning and forecasting tools. Investing in either custom or off-the-shelf solutions for demand forecasting is critical. These tools enable businesses to accurately predict future demand and adjust inventory management accordingly. By effectively aligning supply with anticipated market demands, companies can minimize excess stock and prevent shortages, leading to more streamlined operations.
What logistic challenges (if any) do you think the industry is currently facing?
The fashion industry is grappling with significant challenges related to sustainability, ethical sourcing and labor rights. Despite growing consumer awareness and criticism of fast-fashion practices, there has been no notable decline in consumer purchasing. This situation indicates that while consumers are increasingly vocal about ethical issues, these concerns have yet to substantially affect their buying habits.
Are you optimistic about the state of supply chains in the next few years?
My outlook is cautiously optimistic—but with reservations. Specifically, I am skeptical about the trend of fashion brands starting their own logistics networks as a reaction to the challenges posed by the pandemic. This approach often stems from a short-term perspective and might not be sustainable as it presupposes continuous growth and fails to address underlying inefficiencies in supply chain planning.
However, while there are challenges, there are also substantial opportunities for innovation and improvement in supply chain management. If brands can focus on long-term strategic planning and effective partnerships rather than just expanding capacity, I believe we can see a more resilient and efficient supply chain landscape in the coming years.
