De logistic industry in changing continuously. Before 2000, the logistic flow was simple: Manufacturers shippped big pallets to wholesalers or retailers. The attendance of webshops, caused a big part of this change. The number of webshops is increasing enormously. Instant delivery by the manufacturer to the consumer is a booming trend as well. By means of a client case, in this blog the logistic differences and similarities between consumers and business to business will be enlightened.
New Cakes uses the WICS Warehouse Management System since 2012. New Cakes is a manufacturer of all kinds of cake supplies, for consumers as well as business to business. Founded in 2004, New Cakes started a webshop for consumers. Since then, the company is having an explosive growth: There came a webshop for wholesalers and physical stores were opened. Nowadays, New Cakes has 11 stores. This gives New Cakes a lot of logistic challenges. What are the differences and similarities between logistic services towards consumers (B2C) and logistics towards retailers and wholesalers (B2B). Bas van de Water, logistics manager at New Cakes, explains how these processes are managed at the cake supplies manufacturer.
Size of the orders
The first difference between B2C and B2B logistics is the size of the orders. A consumer often orders one order with a maximum of 3 order lines. While orders from retailers or wholesalers usually have bigger amounts. New Cakes wants to fulfill their customer needs as much as possible, but also thinks of solutions to save delivery costs. Van de Water: "Clients can order by piece in both segments (B2C and B2B). We try to stimulate B2B customers to order full packages by offering price advantage."
A fluent process is essential for B2C and B2B logistics. Consumers order, as said before, small amounts and the outbound delivery process differs a lot with B2B. Consumers often get a box (collo) as package material, sent by a external shipper. For retailers or wholesalers logistics are mostly by pallet and by own transport. When these processes are mixed together in one warehouse, the processes need to have a proper structure to make it executable by the employees efficiently.
Van de Water: "Every warehouse employee is able to fulfil B2C orders, in contradistinction to B2B. We fulfil B2C and B2B orders at the same time, although we distinguish the segments at the packing table. The B2C packing process has many of the same actions. That means that you have to have a different approach for this segment, to work efficiently. Also, B2B orders are heavier and not everyone is able to handle this."
Efficiency is the key to low logistics costs. Order picking is essential in this field. By using intelligent software, multiple orders can be picked at the same time (Wavepicking). New Cakes uses different order picking techniques for B2B and B2C: "For B2C we use the wave strategy and for B2B we usually use order for order. Only B2B orders with few order lines are picked in wave as well."
Consumers and retailers / wholesalers have different issues. According to the logistics manager at New Cakes, it is important to differentiate B2C and B2B service: "We differ the both segments. Obviously, the B2B segment is more businesslike. Consumers have questions about the usage of the products as well."
For both B2C and B2B, transparency is a major case. The B2B client wants to plan inbound, and this also applies to customers. The consumer wants to give in a preferred delivery date. Van de Water: " On the webshops, we provide the stock status in colors. The client receives a order confirmation when the order is about to be shipped, with a matching Track & Trace code. We are also developing a system where you are able to define a delivery day when placing an order.
Time of delivery
Consumers, but B2B clients as well, want shorter time of delivery and cut-off times. New Cakes adapts to that trend: "For us, the time of delivery for wholesalers and stores are much shorter nowadays. We had to work on that matter, because of the competition and since our internationalization. For consumers, we made the time of delivery shorter and made huge steps in a later cut-off time.
We thank Bas van de Water from New Cakes for this contribution to this blog.