Clemson professor says South Carolina plays central role in shipping gifts
By now, the presents are all unwrapped and the frenzy of the Christmas gift-giving season is over.
Not many people think about what happens between the time the consumer buys the present with a few clicks of a computer mouse and the time Santa – or the postal carriers, the FedEx guy or the men driving the big brown truck – drop the package off at the door so it can be wrapped and put under the Christmas tree.
But it’s a complicated process that retailers must have down to a science to meet the expectations of customers, said Dr. Scott Mason, the Fluor Endowed Chair in supply chain optimization and logistics at Clemson University.
South Carolina is already a major player in the logistics business with its interstates, port, rail lines and cargo airports and several distribution centers for major retailers within its borders, Mason said. Wal-Mart has a distribution center in Laurens and Target one in Lugoff. Amazon has two distribution centers, one in Spartanburg and another in West Columbia.
And Mason expects the state’s role to increase with the deepening of the Port of Charleston and the opening of the inland port near the Greenville-Spartanburg International Airport.
“We’re a major player,” Mason said. “We’ve got a good climate, we’re a right-to-work state, we’ve got a fantastic interstate system and the Southeast is booming. South Carolina is primed for success.”
Success is critical in the world of logistics, Mason said.
“We as consumers expect a package to be there in two days,” he said. “As a consumer, I don’t know and frankly I don’t care where a package is coming from as long as I get it when I’m supposed to.”
If a company can’t deliver, consumers will go elsewhere and spread the word to others via discussion boards and review sites, he said.
“As a retailer, you better keep up your end of the promise,” he said.
That takes an incredible amount of math, science and planning, Mason said.
Retailers take into consideration the location of its suppliers, distribution centers and stores, and whether it is best to ship by truck, train, boat or air. They need to figure out which products to keep at which distribution centers.
“The magic behind it is knowing where to put the product and how many to stock,” he said. “There are a whole host of decisions made behind the scenes. Retailers have to do their homework before the season arrives so that when the volume of business goes up during the Christmas shopping season, they can meet the demand.”
Mason said decisions are made based on historic data and projected demand for products.
“If all of your demand is on the Eastern Seaboard, you may not want to put all your facilities in Denver or Seattle,” he said. “You may not want to stock as many sweatshirts in your Miami distribution facility as you would in one in a colder weather state. You may want to stock more summer-related products in the Miami facility.”
Placement of items in various distribution facilities is one of the reasons customers may have orders shipped in more than one package.
“The Wal-Mart distribution center in Laurens is the distribution center for shoes ordered at Walmart.com,” he said. “They ship 50,000 pairs of shoes a day.”
While the volume of packages shipped increases during Christmas, logistics play a key role of retailers throughout the year.
Mason said it’s important that South Carolina keep up with infrastructure needs.
“We need billions of dollars to fix our roads,” he said. “We’ve got to give companies the infrastructure they need to get their products to their customers or they’ll go elsewhere.”
Researchers at Clemson are working on a statewide freight plan that focuses on the state’s commodities and where transportation infrastructure needs improvement. They are also studying the possibility of using standardized containers that could be shared between shipping companies.
“A UPS and FedEx wouldn’t have half-empty trucks but work together to get economies of scale for more efficient and more environmentally friendly transportation,” Mason said.
