Dive Brief:
- Creative early stage maker companies are outsourcing warehousing, packing, shipping and even sourcing to a new breed of companies, called front-end companies, specializing in quick response logistics, according to a recent article in Fast Company.
- Companies are finding that their fulfillment needs are too complex to be completed by themselves yet too small to be properly serviced by the large fulfillment houses. Fulfillment by Amazon (FbA), an industry standard option for companies in this market, is considered cumbersome and ineffective by some firms.
- Creative businesses with rapid time to market requirements are finding a fulfillment solution that addresses and understands their logistics needs in an efficient and effective way.
Dive Insight:
A rapid expansion of maker space companies is creating an opportunity for new front-end logistics companies to provide specialized services that complement these fast moving e-commerce based manufacturers. Traditional service providers are bypassing these companies, and the established fulfillment services, geared to businesses of this size, are underserving this expanding industry.
This small business segment is creating opportunities for support companies to fill an unmet need, in this case supply chain services. These new front-end companies are certainly not a threat to the traditional logistics industry, as they allow traditional providers to focus on their larger accounts. Some may call these new companies disruptors, but in general they seem to be operating under the radar of the larger firms.
However, what is not considered disruptive today may be considered disruptive tomorrow. These small agile companies will bring new techniques and technologies to the supply chain that will get the attention of logistics managers from companies of all sizes. Legacy logistics providers, perhaps slowly at first, will react to this competition with new and improved products and services, providing a win for those in the supply chain.
