The Future of Supply Chain for Ecommerce with DCL Logistics’ Dave Tu

DCL Logistics is a Bay Area company with nearly 40 years in the business of delivering for clients with complex distribution requirements. Yet even their long experience has been challenged by the disruption brought on by a global pandemic.

In this logistics-focused podcast, president Dave Tu, sits down with Jason Nyhus, SVP of global sales and partnerships at Digital River, to talk about how his company is meeting that challenge, and what steps ecommerce brands should be taking to adjust to the future of supply chain and meet customer expectations in 2022.

Disruption runs deeper than the pandemic There was a time when “just-in-time” supply chain was seen as a cost-efficient way to manage operations and still satisfy customer demand. Raw materials were aligned with suppliers and production schedules, warehouses could run leaner, and losses were minimized. That seems almost quaint now as ecommerce brands struggle with sourcing materials, finding warehouse space where they need it and getting their products in the hands of consumers.

Dave Tu, President of DCL Logistics, believes the trouble shaping the future of supply chains started brewing before the pandemic. Think back to the U.S. / China tariff wars. Add Covid to the mix, labor shortages and surging demand as people were forced to stay home, and brands found themselves facing supply chain disruption at a scale many had never seen before. “There’s this imbalance that’s going on,” Tu said at 7:46. “We work with 100 different brands, and they are feeling the themes that are talked about.”

Automation is key Tu describes his company as being at the end of the supply chain – a last mile provider. As such, DCL Logistics can face huge variability in workflow when backorders suddenly come in and thousands of orders need to be filled within days and quickly on their way to consumers.

To meet the demand and cope with labor shortages, DCL has looked to automation for help. “A couple of years ago we launched some very interesting robotics, that are able to have a co-bot, which is a robot arm, picking orders off a shelf and putting them in a box,” Tu explained at 11:02. “There’s been a lot of investment in automation in the industry.” Tu added robotics aren’t once size fits all. Robots are built to handle certain sizes and certain weights, which will factor into what type of investment a company can or will want to make into robotics. It’s likely robotics provide part of the solution, but not all of the solution. A good logistics partner will need to remain agile to meet customer demand.

Mine the data DCL works to give customers transparency on inventory and their shipping history in real time. At 17:10 Tu spoke about the concept of a modern 3PL, and the role data plays in optimizing logistics. Data is important so brands can determine appropriate inventories, not just in the short term, but over time. With machine learning, historical data can help brands plan over the course of a year, and hopefully avoid having too much, or too little inventory.

Global expansion considerations As ecommerce continues to gain traction, more shoppers are expanding their comfort zones and are more open to purchasing items cross-border. With that comes a number of considerations for brands, according to Tu.

At 23:15 Tu says brands looking to grow their global footprint will have to make a number of decisions for their ecommerce supply chain. Will they put inventory in hubs around the world, so it’s available in-region? Or does it make more sense to ship internationally from a domestic site? Having inventory in multiple regions can help speed shipping, but each choice has costs to consider. Working with the right partners can help brands find the best solution for global growth.