This is a guest post by Jeff Ashcroft of the Supply Chain Network
Following the largest single day of snow in 50 years, we continue to plough through January 2019 here in Toronto! I think this is an excellent opportunity to take a moment and reflect on some key emerging retail supply chain trends to get everyone's juices flowing again!
Every year at this time as I prepare to attend the RILA Supply Chain Conference, which has recently evolved to become RILA LINK2019, it's always a great time to take a step back and look at the bigger picture of the key changes I see coming that have the potential to create step changes in retail supply chains.
Almost all of those issuing prognostications and predictions for the upcoming year seem to focus mostly on TECHNOLOGY, and while technology is important, it's only the facilitator of positive changes. My goal here is to dig a bit deeper to get at 3 real foundational changes needed to transform your retail supply chains and brand businesses starting this year!
For 2019 these are Distributed Logistics, Flexible Automation and Empowered Brands.
I will now speak briefly about each of these and also connect you to additional resources to learn more. Or if you're connected with me, always feel free to reach out and set up a call as there's nothing I enjoy more than talking about retail supply chain transformation!
What is Distributed Logistics?
The definition I'm running with currently is below, but this rapidly emerging concept continues to evolve literally as we speak:
'A fully integrated and optimized network of two or more fulfillment centers operated in unison to increase sales and customer delivery service levels, which minimizes transportation costs and maximizes inventory optimization' ~ Jeff Ashcroft
Interesting you say, but why would anyone want to move to a Distributed Logistics network?
Probably the most compelling reasons are that simply put, positioning the right inventories close to customers saves on costs, improves service delivery lead times AND sustainability.
There's a growing body of work highlighting the fact that allocating stocks to demand flow closest to customers may also increase revenue.
To learn more on this emerging trend and how to take positive steps to start moving forward in this direction check out Discovering the Power of Distributed Logistics and explore all of the supporting linked documentation.
For those in the know in fulfillment it's clear that Automation is the future of fulfillment to both optimize labor utilization and help with current and growing shortages of people to work in fulfillment centers.
Traditional automation, where major steel sortation systems are bolted to the floor and require massive volumes in one site to cost justify, are anything but flexible and can best be described as brittle. Brittle from the perspective that any changes you need to make can mean lengthy downtime and high costs. Also, should the system need to be moved it can cost as much or more than the original installation.
Key to the first point on Distributed Logistics this reality means that flexible automation needs to be deployed on a smaller scale and have flexibility to grow/move as and when needed. Suffice it to say, traditional brittle automation solutions do not lend themselves to this new reality.
Many of the dynamics driving the need for change to flexible automation are described in The Automated Local Fulfillment Imperative and again this is a topic I'm passionate about so feel free to reach out!
As many retailers have optimized their internal network operations over the last decades, for smart operators there doesn't seem to be a lot of "low hanging fruit" available in your networks.
If you look at the inbound supply chain inclusive of all of your brand supplier operations this couldn't be further from the truth. If you work with and empower the brands whose products you sell to combine and jointly optimize networks, a significant opportunity presents itself.
Retail Infrastructure Obsolescence is Now Inevitable is post I wrote which captures and shares some context around how collaborating and working more closely to empower brands can result in even lower cost and lower inventory overall networks responsive to both store and consumer ecommerce needs.
Most interesting is when you put these three emerging trends together and begin to imagine, design and then build a Unichannel Distributed Logistics network, as all these pieces are now available to those with the vision to make it happen!
Look forward to catching up with many of you at RILA LINK2019 in Orlando!