CREATIVE INNOVATION
LAST-MILE solutions (LMS), a key aspect of modern supply-chain management, is gaining in relevance, while also changing and expanding its meaning as the fast-moving consumer goods industry continues to evolve, placing ever-greater importance on sustainability, digital solutions and delivering real value.
The traditional understanding that LMS is merely the journey from a retailer’s distribution centre to the store is too simplistic of an explanation of LMS.
LMS combines merchandising, promotions tracking, platform design and a holistic supply-chain approach.
LMS must serve the interests of all stakeholders – manufacturers, retailers, wholesalers, consumers and the environment to be most effective and sustainable.
The challenge of reaching consumers is constantly evolving and accommodates changing consumer preferences, living patterns, technology, retail strategies and a growing social and environmental consciousness.
As such, LMS is intimately affected by the trends in the supply-chain management industry, while also helping shape these trends.
It is the LMS area where most of the current challenges and costs affecting the supply chain are felt. This is especially apparent when looking at on-shelf availability, store replenishment, promotional management and product display.
In tandem with this has come a trend towards smaller pack sizes. In Europe, High Street convenience stores are moving away from big-box stores, as household sizes shrink, and people shop little and more often. Besides this, shoppers in the UK and worldwide are beginning to take an omnichannel approach.
The days of the big monthly shop may be numbered, as consumers embrace a wider suite of shopping options, buying from convenience stores, wholesalers, as well as local and international online stores.
Online shopping itself has various manifestations, with different implications for the supply chain. An online purchase can be fulfilled by staff that pick in-store at a regular supermarket, or at a retailer’s purpose-built “dark distribution centres” for fulfilling e-commerce purchases only. Then, there are “pure-play” online stores like Ocado in the UK, which only offer online shopping.