There is a company which does the way of “troublesome work on
purpose”. Yamazaki Baking Co. Ltd. which is major baking company is the one. In
normal case, retailer offers logistics provider for the logistics between
distribution center and shop because it takes labor. But Yamazaki Baking never
let go of this logistics part. What is the reason?
What
is last mile?
The reason why Yamazaki Baking doesn’t let go of the logistics
part, is only one, because it would only get profit from selling breads if it
didn’t concern to logistics part. There will be a big difference in the eventual
profit for a company depending on whether the company is involved to logistics part
or not.
We can mention the same thing for the logistics called “last mile”
which is the logistics “from shop to consumer” as well as the one between
distribution center and shop. Whether to be able to take a service at last mile
or not, there will be a big influence whether or not to be able to add value or
to add profit. Nowadays, “last mile” can do become “last plus profit” for
venders such as Yamazaki Baking.
The
change surrounding last mile
Now leadership dispute is performed beyond the industry concept surrounding
this last mile service. Especially the motion in EC shop is aggressive. Online shopping
companies such as Major EC site Yahoo! or Rakuten have been using deliverer
company such as Yamato or Sagawa, sending items to consumers, the flow is widely
about to change.
For example, Yahoo! collaborates with Askul which has a huge
logistics network, and Rakuten is developing its own logistics structure such
as Rakuten Super Logistics. In addition, although Major Amazon had been
collaborating with Sagawa Express until 2012, Sagawa decided to separate
because of Amazon’s concept of importance on its profitability. Amazon,
collaboration with Yamato, is aiming for deploying the service of including in
one package (FBA) which Rakuten or Yahoo! is presenting.
Last
mile - 3 choices
There are 3 choices as below for managing the service of last
mile.
1.
Providing a service by building its
own logistics.
2.
Providing a service by
collaborating with a company who has its logistics but is not a major delivery
company.
3.
Providing a service by
collaborating with a Major delivery company.
Well, what kind of advantages and disadvantages are there? Simply
sorted out below:
1. Building own logistics.
Advantage:
It’s possible to get a maximum profit of last mile because it’s
possible to coordinate total logistics on its own. Also its flexibility is high
and it’s easy to start a new service.
Disadvantage:
It takes huge cost and also takes a long time for depreciation. It
takes a long time to build and settle logistics.
2. Collaborating with a company which
has logistics.
Advantage:
Experts can provide services by sharing knowledge or know-how of
specialty between each other, it takes less time to build and settle logistics
than 1. and also initial investment only costs few. And also, it costs quite a
few because of asking other company, but it doesn’t cost much comparing to
asking Major delivery company.
Disadvantage:
The profit becomes low comparing to 1. It takes a while to find
out a reliable partner.
3. Major delivery company.
Advantage:
No new implementation or investment is needed specially.
Disadvantage:
A log of delivery companies have turned to profitability importance
oriented, it costs higher comparing to 1. and 2. Also comparing to 1. and 2.,
the flexibility is lower.
The
secret to survive the Age of Civil Wars
After all of above, it is considered that for a major company such
as Rakuten, to collaborate with a company which has a function of logistics and
also has know-how as a partner is the choice with advantage. The last mile
which changes tremendously across the boundary as mentioned before.
Not only the industry of the Internet including EC site but also
convenience stores, online supermarket, or electric stores have the same
movement. Where the delivery between shop and consumer exists will be
definitely involved in this war.
To find a reliable partner and build a reliable relationship not
for loosing last mile war. That is what to be considered as the secret to
survive this terrific last mile period.
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