The logistics industry is facing challenges in predicting supply and demand. Elastic logistics addresses this challenge by allowing businesses to scale supply chains according to market fluctuations. Since elastic logistics expands and contracts capabilities as needed, it can improve the efficiency of the entire supply chain.

What is Elastic Logistics?

Elastic logistics is the ability to change logistics capabilities as a supply chain’s demand changes. This works in conjunction with supply chain forecasting to create a flexible infrastructure. Elastic logistics is driven by automation and big data to create an agile supply chain, with an increased focus on technology. It focuses on managing variables like container availability, warehouse optimization, and fluctuating demand while avoiding too much stock and improving warehouse throughput to create an efficient supply chain with minimal waste.

Technology is Key

Elastic logistics has gained popularity over the last few years because of its reliance on technology. Data that analyzes freight traffic provides more insight making it easier to predict volumes. It aligns the supply chain to the demand. Supply chain management software provides real-time visibility for customer demand and third-party logistics providers (3PL) make shipping easier than ever. Technology helps manufacturers and carriers scale according to real-time demand. Automation in the warehouse works to meet demand.

Technology solutions eliminate wasted space in warehouses by reducing storage space while automating processes in the warehouse. This results in just-in-time order fulfillment while being able to respond to new and revised orders, which is particularly true for omnichannel sales models which rely on a reduction of a facility’s inventory in order to be efficient. Logistics methods such as just-in-time and lean manufacturing are important of obtaining an elastic logistics model that can conform to the demand forecasts for a product.

Benefits of Elastic Logistics

Elastic logistics provides the following benefits to a supply chain:

• – One of the biggest benefits comes from automation which allows for flexibility in the supply chain. Elastic logistics reduces the chance for error throughout the process and increases efficiencies in fulfilling and packaging which means a company can adjust as needed.
• – Elastic logistics manages deliveries on one dashboard which adds to productivity. It also gives control over unexpected costs and delivery operations no matter what shipping method is used. The ability to track shipments streamlines warehouse planning and order status requests.
• – Better Inventory Management. Warehouse management systems (WMS) predict the correct stock levels for every facility. Along with safety stock, this calculation based on sales history and forecasts prevents the overstocking of a facility, or not having enough stock to meet demand.
• – Better Customer Experience. Being able to address issues on the customer level quickly and with real-time visibility improves the customer experience and satisfaction.
• – Third-party Logistics. Being able to partner with a 3PL reduces the cost of investing in internal operations. Businesses can lease additional warehouse space to meet short-term demand fluctuations. 3PLs can offer additional carriers to meet an unexpected rise in demand.

Who Would Benefit from Elastic Logistics?

Elastic logistics has been seen in all market sectors, particularly the retail industry where changes in demand are common. Online retailers have also had to create more flexible logistics systems that can respond to unexpected growth. Numerous online businesses have partnered with logistics companies to help with warehousing operations. 

Other industries that have also been impacted are consumer electronics, spare parts, and pharmaceuticals. These industries often have a large number of different products that require consolidation and parcel shipment and experience frequent changes in demand.