Digi-Key Electronics’ director of logistics, DeAnna Alby, looks at what’s impacting logistics and how distributors are navigating the challenges to deliver components on time.
As a distributor of millions of products to more than 600,000 customers in over 180 countries, global logistics is an important part of what Digi-Key does. The past few years have thrown curveballs from every direction, with a profound impact on global logistics. We navigated pandemic shutdowns, regulatory changes and capacity constraints, as well as port workforce shortages and lockdowns, creating backlogs for months.
In the past, capacity wasn’t a challenge, but all that changed when the perfect storm hit over the past two years. Order volume increased due to people shifting to working from home and ordering online, there was less capacity with fewer passenger aircrafts flying (typically shipping packages too) and port congestion increased.
Diversity in carrier partners has become increasingly important to maximize capacity, maintain shipping stability globally and provide options to customers to select which carrier they prefer. Digi-Key offers multiple carrier options—DHL, FedEx, UPS and USPS—and has built strong partnerships with them, including having them on site in the Product Distribution Center, loading and shipping out an average 27,000 packages a day to customers worldwide.
Over the past two years, many countries have made changes to their regulatory requirements that impact customs clearance, which vary from country-to-country. It’s important for distributors to be proactive and stay ahead of changing requirements around regulations and documentation as early as possible to ensure shipments are cleared efficiently through customs. Digi-Key ensures its IT team is up-to-speed and in synch with regulatory changes to keep shipments moving through customs and to customers on time.
Visibility to real-time movements of both inbound and outbound shipments is critical to replenishing stock and ensuring customers receive orders on time. Visibility into costs is also becoming more important as shipping costs are increasing. If it’s possible to pivot and find a less costly and faster way to ship, Digi-Key works to find it.
For procurement professionals, having flexibility with a variety of shipping options is also of growing importance. For example, Digi-Key provides options to place scheduled orders to take advantage of price breaks and save time placing the same order repeatedly, and multi-ship consolidation to ship all orders together even if they’ve been placed on different days.
Advances in technology and automation are helping to provide solutions for the skyrocketing growth in shipping demand. For example, last mile delivery options include drones, smart lockers, drop boxes and automated guided vehicles.
Digi-Key is continuing to invest in technology and automation through its new Product Distribution Center expansion which will provide 2.2 million square feet of space—plenty of room to scale as order volume increases and more products become available. The new Center also provides room for carrier partners to grow and incorporate their own automation onsite that will allow for ongoing and improved delivery options to customers.