Complexity in the Retail Supply Chain!

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As consumers the complexity in the retail supply chain is usually oblivious to us. We go to the store and pick up the goods that we want. Or we order goods online from our devices at home, in the office, or anywhere for that matter. We consume the items, returning them if necessary, unaware of all of the work that went into making those goods available to us.

A phenomenal amount of activity goes on behind the scenes to make this experience as seamless as possible. I am not saying that it always goes smoothly. Sometimes items are broken. They are late. Or there is some other issue.

But behind the curtain that is Retail there are a lot of people managing a lot of processes and dealing with a lot of complexity earnestly trying to make your goods available to you.

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Last Mile Delivery: Stop Shipping Air and Empty Boxes!

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When you order something Online there is great excitement in anticipation of opening your package when it arrives.  With any luck the company you have ordered from has provided a positive experience in the online ordering and payment process.  Now you are just waiting for the package to arrive.  You certainly don’t want them to stop shipping.

Most recently we ordered a couple of items online.  They were relatively small items and could easily fit in the palm of your hand.  Within a couple of days a large box arrived at the front door.   I wasn’t quite sure what it was because the box was rather big, big enough for a toaster or perhaps a couple of large board games.

I was surprised when we opened the big box, removed a bunch of crumpled paper and packaging material, and found the 2 small items we had ordered sitting on the bottom of this box.  The items could have fit inside a standard envelope.  Instead they were deliberately packaged in a box which could have held 200-300 of the items.  Why don’t they stop shipping air?

What a waste!

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Multichannel vs Omnichannel Fulfillment Solutions!

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Unchaining Change Leadership

“Omnichannel” is certainly the prevalent phrase in the E-Commerce arena.  The expectation in an Omnichannel Fulfillment world is that a customer can order what they want, when they want, on whatever device they want, and have it delivered how they want.

The physical delivery part of the Omnichannel expectation can be very elusive.  Many companies claim that they are Omnichannel service providers.  But are they really?

How many E-Commerce Fulfillment options are there?  And how many do you provide in your company?

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Black Friday Readiness – Is Your Supply Chain In Trouble?

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The Black Friday/Cyber Monday shopping extravaganza is almost upon us.  While it may seem like a long time for functions such as Marketing or Sales, for your Supply Chain the Black Friday push should be on right now!  Your focus must be on Black Friday readiness.

If you have products manufactured overseas for instance then if those products are not either on the ocean right now or en route over land to your Distribution Centres then you are already in trouble!  Black Friday readiness is critical.

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What is a Multichannel Distribution Management System?

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Multichannel Distribution article originally published at and permission to publish here provided by tenfold.com.

Many businesses begin with single-channel distribution. That sole channel could be a brick-and-mortar store or an e-commerce website. In either case, all sales flow through one outlet.

The advantage of a single-channel distribution management system is simplicity. There’s only one channel to manage, one channel to stock, and one channel to market to customers. As a business expands, however, the single-channel model can limit growth.

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Featuring Our 10 Best Warehouse Order Fulfillment Articles!

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Our latest “Featuring” series article covers the topic of Warehouse and Distribution Centre order fulfillment. With the exponential growth of E-Commerce and online shopping the backbone of activity that makes it all happen is order fulfillment.

Every time you place an online order someone somewhere is picking up those items and placing them in a box for delivery to you. Given that hundreds of millions of people are doing the same thing at the same time it is imperative that companies have the most efficient fulfillment process possible, whether they do this work themselves or outsource it.

We have had the opportunity to lead the implementation of some world class fulfillment processes, even surpassing the speed of Amazon. So take some time and check out our very best Warehouse and Distribution Centre fulfillment articles!

Enjoy!

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The Omni-channel Approach to Customer Experience!

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Unchaining Change Leadership

Customer experience article originally published at, and permission to publish here provided by Karl Crisostomo at tenfold.com

In the last decade, the growing adoption of ecommerce has been swift–and ruthless. Huge retail market players like Best Buy and Toys R’ Us are shutting down huge chunks of their physical locations due to plummeting revenue. Not only is this a result of not embracing ecommerce early in its wave, they are also now competing with ecommerce giants like Amazon and Alibaba who sell the same or competing products online.

Traffic drought in physical stores could be attributed to the rising number of purchases made over the internet for certain customer and product segments. For some, the revenue drop is significant. And yet another part of the challenge big box retailers face as publicly traded companies is that they have to answer to their investors–and with ecommerce delivering superior results, the patience afforded to big box retailers is just not as generous.

So, where does the success of ecommerce lie?

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Turn your Brick And Mortar Stores into E-Commerce Distribution Hubs!

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Retailers with Brick and Mortar stores continue to be under tremendous pressure.  Competition is intense in the fast growing Omnichannel E-Commerce world.  Every week there seems to be news about how one Retailer or another is closing more of their stores when they could be using them as Distribution hubs.

And very few Retailers with Brick And Mortar stores have been able to make a profit in E-Commerce.  Competitors who only sell online without physical stores appear to have an advantage with lower overhead costs.

So how can Brick And Mortar Retailers turn their stores into a competitive advantage plus a source of greater profitability?

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Cutting out the Middleman: The Growth of Direct to Consumer!

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Direct to Consumer article originally published at https://www.bringg.com/  and permission to publish here provided by Raanan Cohen.

As supply chains evolve and grow, products are often passed between dozens of hands at factories, shipping vehicles and pallets, distributor warehouses, retail warehouses, shop floors, and delivery fleets. They often travel thousands of miles and go through multiple intermediaries, something which has an impact not only on the profit margins, but also on the brand’s ability to connect and communicate with their customer.

With revenue growth remaining a challenge, almost half (48 per cent) of manufacturers are racing to build Direct to Consumer (DTC) channels, with almost all of them (87 per cent) seeing these channels as relevant to their products and consumers.

Leading brands that once upon a time relied solely on partners to distribute their products are now embracing Direct to Consumer sales, which can be a powerful distribution channel with the added benefit of full control over the supply chain, and therefore also in full control of the overall brand experience.

The evolution of digital technologies, and in particular the boom of e-commerce means that brands can relatively easily set up an online store and work with delivery partners if they don’t have their own delivery fleet, or if they need to supplement it.

As brands, companies and manufacturers become more comfortable with selling direct to customers this trend will only grow. What’s more, customers also often prefer to buy directly from the source when possible – with the understanding that they will get the best brand experience by ordering directly from the brand itself. According to Forbes, over a third of consumers report that they bought directly from a brand manufacturer’s web site last year. And the number of manufacturers selling directly to consumers is expected to grow by 71% this year to more than 40% of all manufacturers.

Social Media

This trend doesn’t apply exclusively to customer-facing products. B2B manufacturers, service providers and startups are all reaping the benefits of a digital era which enables industries to optimize their supply chains and get much closer to their customers.

Below are some notable examples of how entire industries are either already being re-shaped or gearing toward a Direct to Consumer approach.

 

Global Megabrands

This summer, Nike announced their Consumer Direct Offense – a faster pipeline to personally serve customers at scale. For the brand, which has traditionally relied upon other retailers to sell their products, it’s a significant strategic move focused on distribution through their website and in their own stores with an emphasis on 12 key cities across 10 key countries. The effort is expected to represent over 80 percent of Nike’s projected growth through 2020.

 

Nike is not alone. Other megabrands such as L’Oreal, which in the past has been almost fully dependent on retailers to stock and sell their products, announced that their ecommerce sales rose by 33% year on year in 2016 and now account for 17.6% of their sales. Even though many of their digital sales go through other portals, they could also be looking to grow their Direct to Customer approach with the mighty force of Kim Kardashian who is able to directly launch and sell out an entire cosmetic line in under 3 hours.

 

Disruptive Startups

Startup companies are disruptive by nature. However, over the past decade we’ve seen companies disrupting established industries by bringing a Direct to Consumer approach to their products. After all, it takes years to slowly build a retail network – whether it’s owned or not. The direct approach is risky but if the brand promise is fulfilled through the purchasing experience, young companies have the capacity to change the landscape.

WarbyParker, OneDollarShaveClub, Casper – all these $1B+ brands, and many more, have paved the way in recent years. They’ve had the ambition to reinvent the rules and to take on highly crowded and competitive markets by fully owning the relationship with customers. What these brands know for sure is that “their customer is their asset”.

The competitive edge that these startups have relied on revolves around remaining in control of 4 things: customer data, customer relationship, profit margins, and the overall customer experience – from discovery to delivery.

DSD Delivery

Although not exactly a ‘Direct to Consumer’ example, Direct to Store Delivery (DSD) is also on the rise. In essence what this means is that manufacturers deliver the products directly from their warehouses to the store – without relying upon their traditional warehouses and distribution networks.

A DSD model establishes a “closed loop” network from the consumer good manufacturer’s warehouse to various retail outlets, making multiple stops before returning to the point of origin. This enables companies to be faster and more responsive to their customers’ needs and to stock demands coming from their retail partners – something which translates to a better customer experience, healthier margins and tighter ownership over a simpler supply chain.

This model is on the rise and although it might not be suitable to all manufacturers, it’s worth considering as an alternative in order to get closer to customers and retail partners without relying on intermediaries whenever possible.

Personalization, simplicity and choice

Cutting out the ‘middlemen’ is as much a measure to improve efficiency as it is a strategic move which enables companies to get closer to customers. This enables them to build a direct communication channel, gather invaluable feedback and collect customer data which is otherwise left in the hands of partners who can leverage this knowledge to their advantage.

This shift doesn’t happen overnight and by no means does it undermine the necessity of using retailers, distributors and other partners to reach all potential customers. However, it does provide new opportunities, more customer data and the ability for companies to gain unprecedented visibility and control over their relationship with customers.

Advances in ecommerce and delivery logistics technologies are giving companies the opportunity to explore new distribution channels, gain a better understanding of their customers and ultimately create better brand experiences that are seamlessly personalized.

 

 
 
Originally published on Supply Chain Game Changer on May 2, 2018.

Last Mile Delivery! What is your Strategy?

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Amazon has set the benchmark for Last Mile Delivery.  With massive Distribution Centres within a short distance of every major population centre they are able to offer fast delivery of virtually any product they sell.  The Amazon Prime Now service promises delivery within 1 hour.

Amazon Fresh is their grocery delivery option and with their Whole Foods acquisition they are obviously planning for rapid delivery.  Amazon Go is their Retail store option.  Amazon Key is their in home delivery service.   And the Amazon promise of drone delivery will further cement their leadership in the Last Mile Delivery race.

So how do you compete with that?  What are your options?  And what is your Strategy?

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What’s the Difference Between Fulfillment and Replenishment?

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People who do not work in Supply Chain may hear the terms Fulfillment and Replenishment and consider that they mean the same thing.

Interestingly many people who do work in Supply Chain consider the terms Fulfillment and Replenishment to be synonymous.

I have worked in many different industries and all around the world but the place where I heard these terms used most frequently was in Retail.

Given that there is some ambiguity in the understanding of these terms it makes sense to provide the distinction.

What is the difference between Fulfillment and Replenishment?

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3PL Fulfillment Prices! (Infographic)

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Article originally published by, and permission to publish here provided by, Adam Robinson at cerasis.com.

Growing e-commerce fulfillment demands and costs have collided to bring about an uptick in average 3PL fulfillment prices within the outsourced fulfillment industry, as was evidenced by FulfillmentCompanies.net’s annual poll of 500+ warehouses across the US.

Each year, the online fulfillment match-making service surveys their network of 3PL companies to gauge the industry’s average costs of doing business, as well as what prices they charge users of fulfillment services. 

Below are the survey results at a glance.

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What are the Supply Chain Impacts of Amazon’s Whole Foods Acquisition?

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Whole Foods article provided by http://argentus.com.  Argentus is a boutique recruitment firm focused on Supply Chain and Procurement.

Big news out of the grocery retail world as Amazon has announced its acquisition of major organic foods retailer Whole Foods Market – for an eye-popping $13.7 billion sale price that doesn’t look so massive given Amazon’s $136 billion sales volume in 2016.

Analysts across the retail industry are talking about the huge implications of this sale for a retail industry that many say is in the middle of a major meltdown, in part owing to Amazon’s massive growth in the eCommerce space. This foray into the grocery business is a big challenge to companies like Target, Wal-Mart, and others, and also a sign that reports of brick and mortar retail’s demise might be greatly exaggerated.

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Same Day vs Next Day Delivery … What’s the Difference? (Infographic)

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Same day vs next day delivery article originally published at https://www.gopeople.com.au.  Permission to publish here provided by Jake Smith.

E-commerce has changed the game of how parcels are transported and delivered to customers. With the help of advanced technology, the days have become shorter. We no longer have to wait for the sun to rise and set a few times before we receive that box of meat pie that’s probably not safe to eat anymore. What once felt as if a pack mule was used to deliver a package, now seems like a teleportation device is involved in the delivery.

This massive improvement in delivery speed has set high standards in the logistics and supply chain industry, with consumers now expecting a fast delivery service from businesses so they can patronise their products. With both next day and same day delivery service currently available, customers are left happy and satisfied with their entire buying experience.

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DIM Weight Pricing Explained!

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DIM Weight pricing article originally published by, and permission to publish here provided by, Jake Rheude at https://redstagfulfillment.com .

The 2014 holiday season marked the last Q4 end-of-year sales period where packages shipped based on actual weight. With the start of 2015, UPS and FedEx instituted a dimensional (DIM) weight pricing structure.

The US Postal Service has since adopted this pricing model, also referred to as DIM weight pricing. This has changed the way freight companies calculate shipping charges.

The model means that if you are an eCommerce seller you need to consider size as well as weight. This may change how you package and ship your products, so it’s important to understand DIM weight.

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