At the 2015 WERC Annual Conference for Logistics Professionals, James Reardon, retail expert at Kurt Salmon, hosted a panel with Jeff Girard, senior vice president of distribution and direct fulfillment at DSW, about omnichannel network design and the need for speed in fulfillment.
What insights did you share?
Thanks to companies like Uber and Amazon, today’s consumers want, and expect, on-demand service. That expectation of speed is putting pressure on retail supply chain executives to change the way they think about their distribution network and supply chain strategies.
What resonated most with the audience?
While many retailers have distribution networks and supply chain strategies that are sufficient for today’s standards, they are not prepared to handle tomorrow’s demand. But when figuring out how to provide faster service, retailers must also recognize that their corresponding supply chain costs as a percentage of sales are going to increase. Thus, to effectively control costs and determine the ideal distribution strategy, retailers must weigh their capital and operational expenditures against one another.
What new thinking emerged?
While supply chain executives have long recognized the need for speed, there is an equally urgent need to secure program buy-in from other departments. To secure buy-in, executives need to explain to other departments how supply chain planning has evolved and how related improvements will resonate across the company.
During these discussions, it’s important to also address the idea that redesigning a supply chain first requires changes to a retailer’s organizational structure. Once these changes are made, retailers can then adopt the necessary IT updates. However, retailers should be cognizant that oftentimes the impact of changes won’t be realized for up to three years—so it’s important to start now!
Finally, when looking to identify speed-related areas for improvement, it’s critical that retailers compare their capabilities and aspirations against their true competitors—not just against industry giants like Amazon. An apples-to-apples comparison is the most effective way to find the best route forward and boost speed-to-customer time.
15 May 2015