Creating A Simpler Supply Chain With Elastic Logistics

elastic logistics

With technological advancements and automation solutions growing more omnipresent throughout the supply chain industry, elastic logistics has become a popular model for warehousing and transportation services.

Elastic logistics is the term most often used to refer to a supply chain model that is easily scalable in either direction. This type of concept affords businesses the ability to scale up or down their shipments and other aspects of their supply chain. With this model in place, supply chains enable the most flexible response to changing market demand, ensuring operational infrastructure can cost-effectively meet the fluctuations of the market at any time. 

Let Redwood help you transform your business model to more effectively cater to the ebb and flow of the market and industry changes on the fly with the help of an elastic logistics strategy.


What is Elastic Logistics?  

Elastic logistics refers to a model of conducting business that is flexible and agile enough to upscale or downscale according to the demands of the market. This allows the supply chain operations to expand or shrink in almost real-time, based on predicted (and even unpredicted) happenings in the market. 

In a world where toilet paper can sell out overnight, fidget spinners can have a demand of 50 million in two weeks, or people suddenly stop buying single-serve water bottles, it’s critical to ensure that companies can grow or reduce capacity to meet constantly shifting demands. We live in a fast-moving, quick-changing world, and business operations need to be able to adapt and keep up. That sort of fast-paced responsiveness is the goal of elastic logistics. 

In most lean business models, the goal is to minimize expenses, control waste, and better match inventory requirements. Elastic logistics fall into the category of lean business, but it fills in the gaps that a lot of businesses have: warehousing and middle- and last-miles of operations. It is essentially the “lean” operations portion of a “lean” business model.


Advantages of elastic logistics

  • Maximizes and fills loads/capacity, especially for LTL shipments
  • Optimizes routes for faster delivery and enhanced transport efficiency
  • Reduces over-manufacturing and over-stocking 
  • Diminishes price volatility 
  • Minimizes risk
  • Increases efficiency at multiple checkpoints of supply chain
  • Enhances “perfect order fulfillment” 
  • Improves customer service

Arguably the most important benefit of elastic logistics is that it makes it easier to achieve perfect order fulfillment. POF is an important metric for supply chains that determines the overall efficacy of the logistical process. With greater technology and automation, perfect order fulfillment metrics are getting higher. This, in turn, creates a faster and leaner supply chain with reduced costs, while satisfying and retaining more customers. 


Requirements for elastic logistics

Elastic logistics has only recently become popular because technology advancements are a necessity in order for this kind of model to work. Data analytics and tracking make it easier to predict what is going to happen and then create plans to respond effectively and in real-time. 

Some of the tech that elastic logistics should employ to be most successful: 


Transportation Management Systems (TMS): These platforms help supply chains manage fleets in order to enable fast, on-demand delivery services. Click here to learn more about TMS solutions such as RedwoodConnect 2.0

Artificial Intelligence: AI helps predict and forecast risks, cost, and demand. With real-time data analysis, machine learning is the best way to expect the unexpected and forecast demand with the utmost detail. Find out how AI is driving supply chain management

Warehouse Automation: Everything from warehouse bots to container sensors to RFID devices have become a part of the fully “connected” warehouse.

Big data: Inaccurate or incomplete data can render deep data analysis essentially useless. This effectively halts the purpose of elastic logistics and its scalability. Thus, having a lot of quality, proven, accurate data is critical in order for the process and model to work successfully. 

Blockchain: The best way to store all that data is with blockchain technology. The blockchain can store every piece of data in succession, enabling machine-learning robots to analyze, predict, and assist in decision making. Blockchain is the future of the supply chain due to its ability to enhance transparency and communication between all chain partners. 

People: Some fear that people are going to lose their jobs as the supply chain moves toward automation. This has not been the case thus far with tech implementations, though. People are still the most valuable resource organizations have when it comes to supply chain optimization. If you want a truly agile supply chain, you need expert professionals who know how to make fast and effective decisions while cultivating a strong operational culture. When people work alongside technology, elastic logistics can truly thrive. 

Data is a necessity for predictive forecasting and effective response. This requires a deep understanding of trends, risks, and future-oriented scaling. Machine learning reads the data, and automation then uses it to streamline operations.

All of these aspects have to work together to create the most flexible and effective process. Essentially, elastic logistics is simply a combination of all of these various elements working in tandem. 


A Focus on Flexibility

The purpose of elastic logistics is the ability to turn your entire operations on a dime, regardless of what happens in your market or business. Whether you’ve had to scale back due to a global pandemic or suddenly sales have picked up from an awesome marketing campaign, an elastic logistics approach allows you to have the agile infrastructure to meet that demand head-on.

When employed successfully, elastic logistics means your business can scale up or down, even with the most unanticipated patterns or unexpected returns. Elastic logistics can help to reduce costs, improve services, minimize risk, and enhance the competitive edge for companies that are looking to optimize their operations. 

Elastic logistics requires the implementation of key technologies and service-based solutions. Find the right plan for your business with a free consultation with the Redwood Logistics team. We’re excited to work with you to create a proactive plan for even the most seemingly reactive situations.