Notes from Momentum 2014: Time to Expand Your Supply Chain Thinking

Speakers at the recent Momentum 2014 conference held by Manhattan Associates in Hollywood, Florida, discussed a wide variety of supply chain topics. However, one theme that ran through many sessions was the expanded range of competition retailers face from a multitude of sources and channels. Properly meeting this competition requires a rethinking and broadening of supply chain strategy. Following are highlights from three industry experts who offered different pieces of advice for retailers looking to adapt their supply chains to the new competitive environment in which they do business.

Follow the Leader

Sucharita Mulpuru, VP/principal analyst Forrester Research, said that Amazon.com is going after almost everyone’s business and is establishing a significant presence in a dizzying range of verticals and industries. In response, she said, retailers need to copy the supply chain strategies Amazon uses that work.

Most importantly, Mulpuru advised retailers to adopt predictive shipping, which entails analyzing past purchase history of shoppers to determine who is likely to order a product at a certain time and move the inventory closer to them. This strategy works best when applied to regional clusters of shoppers with similar buying patterns and also works well with new product releases, such as the latest book or movie in a popular series.

Mulpuru also recommended that retailers consider co-binning, or opening the sale of select items to third-party partners who may be able to source or ship them more effectively and storing, picking and shipping them from their own distribution centers. In addition, she said retailers need to protect their turf by dynamically monitoring and responding to Amazon’s price and product offerings, as well as through fulfillment partnerships with other online retailers like EBay and aggressive omni-channel customer retention strategies.

Keep it Simple

Reed J. Stepleman, senior director of product services in fulfillment and e-commerce for Manhattan Associates, explained how technologies that simplify order processing can help ensure retailers stay competitive as they move into a 365-day operating model. These solutions include pick-to-light applications, which make the picking process easier by allowing warehouse associates to scan boxes and then pick items as directed by light displays.

In addition, Stepleman said retailers should examine automated unit sortation systems that allow employees to pick items in bulk and then feed them to a sorter that determines what orders go together on a chute. Other solutions include put-to-light “put walls” that light up to show workers where to put merchandise once it is picked and packed, based on a scan, and automated bagging systems that remove the manual labor associated with packaging goods for shipment to consumers.

Connect to Your Customers

Christina Bieniek, principal Deloitte Consulting L.L.P., noted that 80% of consumers engage with a smartphone before, during or after a purchase, and that for today’s “connected consumer,” online interaction is an everyday part of life. For Millennials, whose buying power will surpass that of Baby Boomers in 10 years, everyday connectivity is even more pronounced.

Thus retailers must utilize different supply chain business models that reflect this new connected reality, such as shipping products directly to consumers from brands. In addition, retailers need to start offering holistic assortments that look at all the needs of the individual customer and are then assembled outward.

And demand for the assortments must be fulfilled at any touchpoint the customer desires. Especially for Millennials, the overall customer experience needs to be highly personalized, as they are not brand loyal, meaning features like “social shopping” with friends are extremely important.


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