Supply Chain Services

The changes to the retail market resulting from consumer omni channel shopping and purchasing are disrupting the retail extended supply chain as much, if not more than, the market itself.  The retail supply chain has always been changing and evolving to support the evolving demands of the retail consumer however now omni channel consumer demands have reached the tipping point and the disruption is beginning to extend to the supply chain.  Just as the omni channel shopping and purchasing demands of consumers have disrupted the retail marketplace, these demands will also drive changes to disrupt retail supply chain execution.  The extended retail supply chain must increase flexibility, collaboration, and improve communication across the extended supply chain partners, including consumers.  

The retail supply chain must become more flexible and transparent to support changing demands.  These changing will not level out or stabilize, the retail market has changed to a flexible and transparent market as a result of the technology available to and used by consumers and retail supply chain execution must also increase flexibility and transparency.  You can see the changes in a broad spectrum of the market and the resulting supply chain from dramatic increases in parcel deliveries to increased collaboration from consumers across social networks and shopping technology based on social networks, to new partnerships between retailers to support returns.  All of these demands impact the retail supply chain execution by changing the execution requirements.

The changing supply chain execution requirements require the entire supply chain to be rebuilt from the foundation to allow the network to collaborate and react to the demands more efficiently.  These demands require increased transparency and increased flexibility on the part of the retail supply chain just as the same demands are disrupting the retail marketplace.  These changing demands require the supply chain to rebuild functionality in ways that allow configuration of services based on the demand requirements so that the services and delivery of product meet the immediate needs of the sale.

These changes in retail supply chain execution will not slow and will only increase in both complexity and velocity.  The retail supply chain is required to serve two customers, retailer and consumer, and the challenge for the supply chain is the convergence of demands and expectations from these two customers.  In other words, the demands of the retailer for product inventory supply and location are beginning to converge with the demands of the customers.  In order to prosper and meet these demands require the retail supply chain execution to increase flexibility and transparency to meet the demands.  These changes require a dramatic increase in collaboration across the supply chain network in order to meet the flexibility demands.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Retail Supply Chain Specialization

The changing retail supply chain execution requires an increased level of specialization to deliver on the demands of the omni channel shopping an delivery requirements.  The retail supply chain must focus on developing functional components that can be put together to meet the retail market demands.  The market demands on the retail supply chain are changing so swiftly that the supply chain is required to increase flexibility and the most efficient manner to increase flexibility is to develop a component catalog that can be utilized to support the shifting demands .  The supply chain functions can no longer be segmented to one piece of the supply chain.  These functions must be able to mix and match in an efficient manner to support the swiftly changing demands of the marketplace or the supply will collapse from the weight of the demands.

Specialization can mean many things and in this case I am focused on the development of components within the retail supply chain to allow selection of the appropriate component, or function, that meets the immediate needs rather than the silos of functionality based on channel.  The retail market has continued its evolution over the years to the point now where the channel should clearly not limit the ability to support the demands of the channel and the market.  This increased flexibility brings with it and increase in complexity required to build, maintain and support the components.  The development of the component capability and the elimination of supply chain silos will allow the retailer to better support the demands and needs of the market.

The functional components require a means to oversee and control the usage and this is best done through a functional control tower of software that provides the glue that allows components to be combined to meet the market demands.  This control tower software or component of the supply chain encourages and supports the elimination of silos in the supply chain and also supports and encourages collaboration across the extended supply chain.  This control tower software allows complexities of the retail supply chain specialization to be monitored and managed throughout the extended supply chain.  Through the ability to monitor and manage the supply chain functionality this control tower also provides the flexibility in the extended supply chain that will support the changing demands for a long time.  

At this point in the evolution of the retail supply chain we can only confirm the importance of flexibility in the supply chain required to meet the consumer demands.  This requires the supply chain to eliminate the silos and increase the collaboration across the extended supply chain to support these demands.  The most effective way to meet these requirements is to implement a foundation that supports methods to combine capabilities as components to support new service demands of the marketplace.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Retail Supply Chain Execution

The changes to the retail market resulting from consumer omni channel shopping and purchasing are disrupting the retail extended supply chain as much, if not more than, the market itself.  The retail supply chain has always been changing and evolving to support the evolving demands of the retail consumer however now omni channel consumer demands have reached the tipping point and the disruption is beginning to extend to the supply chain.  Just as the omni channel shopping and purchasing demands of consumers have disrupted the retail marketplace, these demands will also drive changes to disrupt retail supply chain execution.  The extended retail supply chain must increase flexibility, collaboration, and improve communication across the extended supply chain partners, including consumers.  

The retail supply chain must become more flexible and transparent to support changing demands.  These changing will not level out or stabilize, the retail market has changed to a flexible and transparent market as a result of the technology available to and used by consumers and retail supply chain execution must also increase flexibility and transparency.  You can see the changes in a broad spectrum of the market and the resulting supply chain from dramatic increases in parcel deliveries to increased collaboration from consumers across social networks and shopping technology based on social networks, to new partnerships between retailers to support returns.  All of these demands impact the retail supply chain execution by changing the execution requirements.

The changing supply chain execution requirements require the entire supply chain to be rebuilt from the foundation to allow the network to collaborate and react to the demands more efficiently.  These demands require increased transparency and increased flexibility on the part of the retail supply chain just as the same demands are disrupting the retail marketplace.  These changing demands require the supply chain to rebuild functionality in ways that allow configuration of services based on the demand requirements so that the services and delivery of product meet the immediate needs of the sale.

These changes in retail supply chain execution will not slow and will only increase in both complexity and velocity.  The retail supply chain is required to serve two customers, retailer and consumer, and the challenge for the supply chain is the convergence of demands and expectations from these two customers.  In other words, the demands of the retailer for product inventory supply and location are beginning to converge with the demands of the customers.  In order to prosper and meet these demands require the retail supply chain execution to increase flexibility and transparency to meet the demands.  These changes require a dramatic increase in collaboration across the supply chain network in order to meet the flexibility demands.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Consumer Value Chain

The consumer value chain is taking on more and more importance as consumers have increased pressure and changes to the omni channel shopping and purchasing practices and capabilities.  Consumers have embraced technology to provide the tools and capabilities to support their changing lifestyle needs in their drive to redefine the omni channel retail market.  Consumers are looking at value that is derived from pricing comparisons across competitors along with the ability of the retailers to meet the availability and delivery requirements to support the consumer demands.  The consumer value chain now must be considered and addressed by retailers with at least the same level of importance as supply chain, omni channel capabilities and marketing plans.

Consumers now have the technology that allows them to quickly and efficiently shop for products along with the methods and capabilities to select the purchase method that best fits into their lifestyle needs.  This value chain now is impacting the entire extended retail supply chain as a result of the impact of consumer demands.  As the technology improves and expands in reach, this consumer value chain will also expand.  Some areas that are most important are inventory location and delivery capabilities, which will directly drive the greatest impact on the consumer value chain, and also the greatest impact on the retail market.

Retailers now are at another crossroads where they must revise their extended supply chain and sales capabilities in reaction to the consumer demands.  These changes in the the market require that retailers step up their efficiencies and capabilities in their extended supply chains in order to meet the changing demands.  This means that retailers must increase their collaboration with consumers in order to integrate and support the consumer value chain and especially to understand and meet the changing consumer demands.  Retailers are coming to realize the importance of the consumer value chain in their strategic plans and execution because now consumers have the capabilities to bypass individual retailers in their shopping and purchasing and most importantly, consumers are not shy about using these capabilities.

Retailers must incorporate the consumer value chain in their plans and this requires retailers to collaborate with consumers to provide the means and the process to understand and incorporate the future consumer demands.  Retailers must look to the future now and collaborate with consumers to incorporate the methods and practices to support the consumer value chain going into the future.  Retailers are in a major rebuilding cycle now and it is most important now to incorporate the methods that will allow the retailers to align with the continuously changing consumer value chain.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Consumer Collaboration Programs

Consumer collaboration programs have quickly become a priority and taken a prominent place in the retail marketplace almost everywhere.  This is especially true in shopping and search type tools in addition to many progressive retailers.  The next logical step for consumer collaboration is into the inventory management and placement programs to improve inventory availability and placement across channels to increase transparency and eliminate friction across channels.  Over the last couple of years retailers have been struggling with the changes consumers are bringing to eliminate the barriers across channels through the consumer collaboration not only with other consumers but also with third party shopping and product search tools.  

These consumer actions have certainly disrupted the brick and mortar retail outlets especially in malls and strip mall outlets because of the continuing shift to purchasing online.  While consumers have been shifting shopping and purchasing practices, retailers have basically stuck their heads in the sand and doubled down on the levers that worked in the past, namely sales and reduced prices.  These efforts have been largely unsuccessful mainly because there is always someone that will provide a lower price.  The large retailers have struggled with develop and acquiring capabilities to counter the consumer shifts in shopping and purchasing with Wal Mart providing the most significant example of this practice.  

To date, however, retailers are still simply providing expanded capabilities across the channels, with a mix of low price thrown in.  For example Wal Mart is now advertising two day delivery service as standard, without the membership to a customer program such as the Amazon Prime program.  This is good as a stop gap however retailers must expand their horizon into greater collaboration practices, along with shopping analysis via big data services to be able to create trends rather than react to trends.  Amazon is a good example of a retailer that creates trends, while Wal Mart, to date at least, is a good example of a retailer following trends.  

Consumer collaboration to enhance inventory management is one of the next trends that retailers should focus to support their future needs.  Rather than fighting the consumer demand to shop in the retail store and purchase online, retailers should embrace these practices because the online interaction with consumers provide additional data points to understand shopping that these retailers cannot capture simply in the store purchase.  Retailers must provide a cohesive collaboration program that allows the free flow of information between consumer in any channel.  This requires interaction and collaboration on the part of the store sales clerks along with the combination of eCommerce data related to the customer that will allow and encourage the store clerk to personalize the experience in the store with data captured online.  This collection of data combined with developing the consumer relationship will help retailers to re-evaluate their inventory management and improve the strategic inventory placement.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Strategically Placed Inventory

The omni channel retail marketplace requires a dramatic re-evaluation of inventory strategy from the planning and forecasting to the placement of inventory to support the consumer purchasing demands.  This new strategy must be fluid in order to support the discontinuous change in consumer demands and most importantly must not be complacent or settled in the way in which the retailer's strategy is monitored and managed.  Now more than ever retailers must implement a rigorous continuous change process to sense marketplace and consumer changes so they can quickly respond and adjust their inventory strategy accordingly.  The omni channel market requires a fluid and flexible inventory strategy that is based on changing consumer demands rather than on retailer existing practices.

The omni channel market is disrupting the retail inventory management requirements in a manner that has not been seen for a very long time.  We are in a time now where the omni channel market is changing so frequently and these changes are now combining into a market disruption that is reverberating across the market.  Retail stores are becoming more important as showrooms for products that consumers then order online, or consumers are foregoing the retail store altogether as a result of their changing lifestyles.  This is extremely difficult to predict and so it requires retailers to redefine their inventory strategy to place inventory strategically across their entire supply chain in order to react to the fluctuations.  

Where does this all lead?  Retailers must be prepared for dramatic shifts in inventory demands across channels with a moment’s notice and must be able flex inventory based on these demands.  This requires increased flexibility and smaller shipments to stores, shipments to consumers from the store and shipments from warehouse to warehouse or any combination of shipments from the warehouse.  In other words retail and especially omni channel retail inventory shipments will shift closer to the direct-to-consumer model of small and single quantity shipments of eaches rather than large shipments of cases or pallets.  

These shifts in shipment makeup will also impact the cost to support the new shipment models.  This will require a re-evaluation of the inventory placement to adjust for the changes to last mile delivery.  This shift in the inventory placement strategy will require that retail stores take on a greater role as direct-to-consumer distribution center as well as sales channel outlet.  The challenge for retailers will be the fluctuation according to season and consumer demands.  

Strategic inventory placement is going to be one of the most difficult challenges for the omni channel retailers because of the fluid and volatile demands of consumers that will fluctuate with very little warning.  Retailers must become experts in sensing and adjusting to these changing demands and this means that the importance and dependency on a the supply chain capabilities will also increase dramatically.  The extended supply chain of the omni channel retailers will make or break the retailer success and this means that supply chain leadership must step up their game to provide leadership and support for these changes.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Retail Supply Chain Practices

The retail supply chain must change the way in which they support the business to improve flexibility and most importantly support the changes in the ways that consumers interact with retailers through omni channel shopping and purchasing.  Just as the retail business must change to support frictionless shopping and purchasing across all channels to meet the changing demands of consumers, the retail supply chain must change in order to support the inventory replenishment and delivery across cycles.  The impact of these demands on the retail supply chain require a flexibility in communication, capabilities and expanded collaboration across the extended supply chain.  The key to meeting the demands is developing robust flexibility into the supply chain framework to react and support changes.

The good news is that the supply chain has been forced to react to pressures and changes to the practices over the years from a combination of changing manufacturing demands, natural disaster and cost pressures so the supply chain is in a position to provide leadership and direction to retailers.  The supply chain industry has spent years reacting to continuous disruption and these disruptions and practices to sense and respond to changing demands can provide the necessary framework for the large legacy retailers to support the frictionless omni channel retail requirements.  

Retailers must first change their supply chain practices to conform with a new omni channel market framework that supports a single inventory position across channels that provides a basis to support fluid movement of inventory across channels.  These practices require a change for many retailers in their operational practices as well.  To be more specific as an example, the retailers must extend their supply chain practices across all channels to support pick, pack and ship operations to customers, between stores and between warehouse in any direction.  This brings an increased demand across the entire supply chain for labor, transportation, inventory control and accuracy including expansion to inventory and sales forecasting and planning.  

These changes are focused mainly on the when and less on the actual functionality and expands the retail supply practices directly to the retail store shelf.  The supply chain function does not change, in other words product will be picked and packed, however these functions will be performed at the store as well as in a specialized distribution center.  The results of these expansions in supply chain practices are an increased focus on inventory management along with an expansion of labor in the and capabilities across the omni channel marketplace.

These changes in retail supply chain practices will bring increased cost management pressures to address the labor expansion in the retail stores.  Much of the expansion can be supported by repurposing labor and changing job roles and responsibilities.  These will require analysis and measurements through labor standards management which is again an expansion of supply chain practices across the omni channel outlets.  The challenge to the retail supply chain is to revise the view and activities in retail store outlets to align standard supply chain practices to all retail channel outlets.  

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Transformational Leadership

The transformation in the retail marketplace requires a leadership in both omni channel retail and the supply chain decision making process to support the new retail marketplace.  The retail marketplace requires a digital supply chain to support the velocity change in the retail marketplace.  This transition into a digital supply chain requires collaborative leadership to encourage and drive the transformation into the collaborative and flexible supply chain that can support the necessary changes.  Leadership in this digital supply chain model also require a great deal of flexibility along with patience to navigate through the internal and external change.  Transformational leadership in the supply chain process requires a long term commitment and the realization that there will be many struggles during this transformation.

Changes in the retail marketplace require leaders across the organization to collaborate to improve and in many cases redesign and replace the practices supporting the existing business.  This transformation of the retail market requires supply chain leaders an opportunity to play a major role in the transformation into a true omni channel retail market.  This requires a transformation of people, process and technology across the retail market to address the marketplace disruption that is being driven by consumer demands in an increasing velocity.  Leadership in this environment must provide vision and guidance through these changes by encouraging collaboration to deliver solutions to the business problems.  The transformational leader realizes that foundational changes must be made to support the new business model and then these leaders provide the vision and encouragement to explore the business demands and define the solutions to the business problems.

Transformation leaders realize that changes must be made, they do not know the end state but they provide the encouragement and the practices to help the organization define the challenges and the solutions to the challenges.  In the digital age the rate, volume and impact of change is too great to expect anyone to provide a solution that will survive the demands for an extended period.  The transformational leader brings imagination along with a commitment to both internal and external collaboration that will drive the business and resulting supply chain decision making to develop flexible and collaborative practices that will survive and even encourage the velocity of change in the market.

Consumers have taken control of change in the retail market through collaboration and imagination and the retail business and supply chain must incorporate these same building blocks of collaboration and imagination to change the omni channel market to meet the consumer demands.  Transformation requires imagination and courage to guide the supply chain through the changes and a key ingredient to success is increased collaboration in the supply chain.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Retail Transformation

The retail market is going through a major transformation causing disruption in the marketplace for the large legacy retailers in meeting new and changing consumer demands.  In the last year or so consumers have forced retailers to reevaluate their omnichannel strategies when consumers took control of their shopping and purchasing capabilities utilizing mobile technology and wireless network improvements.  In the past year or so market forces have come together as a result of these improved technologies, millennial growth and changing lifestyles to allow consumers to transform the manner in which they interact with retailers and these forces are, in turn, transforming the retailer market as a whole in ways that the large legacy retailers have not anticipated.  This transformation has caught the large retailers struggling to maintain their position and survive these changes.

In hindsight it is easy to look back and see the early stages of these changes from consumers window shopping in retail stores and purchasing online, throughout the steady growth of the eCommerce channel.  I think there were two recent factors that pushed the consumer transformation past the tipping point:

1. The expansion and growth of mobile technologies and wireless networks.  This provided the foundational framework for transformation of the consumer shopping and purchasing experience into a true omni channel market.
2. The growth of millennials in the market which also drove a greater comfort with technology, along with experience in the technology capabilities along with an expansion of social network integration with the shopping and purchasing experience.

These factors have allowed consumers to transform their shopping and purchasing in a manner that allows them to control the pace, the methods and the timing of shopping and purchasing to meet their lifestyles.

You can see the results of the consumer shopping transformation all around the retail market where large legacy retailers are expanding eCommerce capabilities while Amazon is expanding their brick and mortar presences.  The concept of anytime and anywhere and especially in conjunction with mobile technology and wireless network improvements is transforming the way consumers interact with retailers and this is then transforming the retail market in methods to meet the changing consumer demands.  

Amazon is still the category killer although Wal Mart has now taken an aggressive approach to embracing and extending their omnichannel capabilities through a series of acquisitions.  Due to the nature of the retail transformation and the driving factors of this transformation across so many levels and aspects of the market I do not think the retail market will ever stabilize.  In fact based on the the most recent year or two I really see the retail market having entered into a state of continuous fluid transformation that is defined and redefined continuously based on the demands, and probably most importantly the imagination, of consumers, retailers and the technology providers.  

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Inventory Forecasting Strategy

As a result of the changing consumer demands driving dramatic changes in the retail marketplace to implement a true multichannel experience retailers must overhaul their inventory forecasting strategy.  Consumer demands are driving purchases across channels which in turn is driving changing into the inventory planning and forecasting requirements to increase flexibility in the inventory placement.  This requires retailers to expand big data and analysis requirements in order to take into account the many new variables that are impacting the forecast and the forecast strategy.  One of the greatest challenges for retailers is the rate and impact of changes that are buffeting retailers now based on new and changing consumer demands.

The combination of the consumer changing demands and the velocity of these changing demands is disrupting large legacy retailers’ abilities to react to the changes and meet the demands.  The physical and virtual channels are blending into a cohesive consumer shopping experience and this requires retailers to adjust their inventory forecasting strategy.  These adjustments focus on an increased velocity of forecast and replenishment cycles, along with the fluid movement of inventory across channels based on changing consumer shopping and purchasing demands.  

These changes require the forecasting strategy changing to incorporate and analyze a great deal of information to be processed in much shorter cycles.  Internet time takes on more importance now for retailers and especially large legacy retailers and Internet time dramatically increases the velocity of changes to inventory demands.  These changes in velocity of inventory demands and especially demand across channels requires much shorter inventory forecasting cycles in order to support the need to quickly adjust to the changes in demand.  The demand for a product can explode in an extremely short period of time and by the same token it can also drop in short period of time and these discontinuous fluctuations in inventory demand wreak havoc on forecasting.

Large national retailers have additional complexity in their inventory forecast requirements based on fluctuations in regional demand for products.  These demands can actually provide benefits for both early reads on product demand and also, on the flip side, an outlet for overstock liquidation.   It is completely unrealistic to believe that retailers can meet all of the changing demands and this means that retailers must account for inventory fluctuations in demand in their forecast strategy.  This is where large national have an advantage of an early warning system for potential demand and then a natural outlet for overstock at the tail end of the cycle.  This provide some leeway to the forecast accuracy and should also be taken into account in revisions to the retailer's inventory forecasting strategy.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Strategically Placed Inventory

One of the greatest challenges in the new retail marketplace is the inventory locations and availability to fill consumer demands across changes.  This challenge requires improved forecasting and planning to address the inventory levels and in addition, and also extremely important is the strategic placement of inventory.  This new retail marketplace requires the systematic tracking availability based on shared forecast and planning across channels because the changing marketplace does not differentiate between channels more and more.  There is now an expanded requirement for the ability to ship from any channel to any channel based on destination and inventory availability.  

This requirement to ship from any channel to any channel is a relatively straight forward systematic configuration improvement.  However, the physical and logistical changes required to support these new requirements can be very complicated and require a great deal of effort to implement.  This also requires a very high level of flexibility in the execution as well because the rate of change in the marketplace is only increasing.   These changes must be reviewed and coordinated together and will require collaboration across external partners, internal business units and also external consumers.  These changes cannot be fully defined and implemented with the intent to be complete because the changes to the marketplace are not slowing down.  

Legacy retailers have a huge challenge in front of them to implement both cultural and operational changes to support the flattened customer delivery model.  It will also and perhaps most importantly require cultural changes to support the operational requirements.  In my opinion one of the key changes is the standardized shipping model that matches changing industry standards driven by Amazon and other online retailers.  In order for these large legacy retailers to survive they must implement the changes that improves inventory accuracy and most importantly inventory location accuracy in order to support these operational improvements.  

Strategically placed inventory is extremely important in this new marketplace because retailers only have one chance to complete the purchase.  This means that planning and forecasting by region, including blending channels is becoming more and more important.  Retailers must be flatten their operations in order to meet the purchasing demands and the legacy retailers must step up their operation to increase capabilities in the stores to be able to meet the purchasing and delivery demands.  Retail stores make a good base for regional direct to consumer deliveries and this means that the store employees must be beefed up to be able to support these new demands.

Retailers have realized this but the changes will require time, effort and funding to implement.  Most of them have finally realized this new marketplace reality and have begun this difficult change.  The retailer extended supply chain and logistics will play a large part in this redefinition.  This will put great pressure on the supply chain and the store operations and since this involves changes for people it must take into account training and staffing requirements.  

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Collaborative Inventory Planning

Inventory forecasting and planning is continuously increasing in complexity while the planning and replenishment cycles must be shortened in order to increase accuracy and maintain inventory levels in the necessary purchasing channels.  This becomes increasingly complicated because consumers are blending shopping and purchasing across channels now, creating a true omnichannel environment.  In order to support these demands retailers must increase their level of collaboration across internal and external partners and most critically increase focus on collaboration with consumers.  These demands and shifts in purchasing across channels can only be supported with the retailer increasing their level of collaboration with consumers.  

The retail supply chain has become extremely complicated and this level of complication is increasing continuously and being driven by the changing consumer demands.  In order to meet these challenges, the retail supply chain must:

• Increase levels of collaboration and cooperation across internal and external partners.  This is required for an early warning and also, most importantly, clarification and response to the changing demands.
• Eliminate silos within the retail organization to reduce the friction and increase the collaboration across all partners.
• Change the culture to one of collaboration both internally and externally.  This will probably be the most difficult requirement because of the cultural change required to truly achieve long lasting benefits.

In other words retailers must create a collaborative supply chain and this must start with collaborative inventory planning.  

Consumers do not really care where the inventory comes from when purchasing online and that is appropriate.  This is really the crux of the challenge for retailers; consumers want the product on their time requirements and delivered based on their need at the time.  This means that consumers may place a mobile order while in the retail store because they cannot find a size or color, or they may purchase in the store based on an impulse at the time.  Whatever the combination omnichannel retailers must be prepared for any eventually in the purchase.  

These changes require investments in culture, collaboration, technology, people and the extended supply chain in order to meet these demands.  Retailers must invest heavily now and they must be prepared for a continuous level of investment to sustain their relationship with consumers.  Inventory management plays a critical role in these investments and consumer relationship going forward because the relationship from the consumer perspective is based on delivery.  Effective inventory management requires collaboration across channels and most importantly communication and collaboration with consumers to understand demands in a manner and time period that allows the retailer to act.  

The days of retailers remaining in a tower and providing the product in the locations and stores based on the methods that meet the retailer best interests and simplicity are gone.  Consumers smashed this model years ago and retailers are now beginning to realize the impact on their operations.  Retailers must open up and work with new and existing partners in a manner that supports the demands of the consumer.  Retailers have been talking about ordering anytime and anywhere for awhile now and they are now realizing that consumers have defined this mantra to meet their lifestyles and this causing an upheaval in the marketplace.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Retail Consumer Purchase And Delivery

Consumers are no longer limited by channel in their purchasing and delivery choices and retailers are impacted in many unforeseen ways from these new consumer demands.  These purchasing and resulting delivery decisions and demands have been flattened by the consumer across channels and these changes are disrupting the retail marketplace in ways that were not foreseen by retailers.  The disruption of the marketplace requires the retailer not only to reevaluate their inventory management and forecasting strategies, it also requires that the retailer reevaluate their culture and internal and external partners to redesign the relationships.  Changes in consumer practices related to the purchase and delivery of these purchases have been changing for years now and have now reached a critical stage in the cycle where the changes are impacting the retail marketplace by shifting the purchasing to the eCommerce channel.

Consumers have wrested control of the shopping and purchasing practices to support their lifestyle requirements through a steady expansion of the consumer experimentation in addition to the growth of mobile and wireless technology.  Retailers have struggled trying to fit these new demands into their standard models and now in the last year or so consumers have broken through these models to disrupt the marketplace.  Retailers now are being forced into a period of rebuilding and redesign of their forecasting and inventory management strategies to support the new marketplace.  

This disruption started with consumer shopping demands that have naturally flowed into new purchase and delivery demands to meet the consumer lifestyle.  This has been a difficult transition for retailers and the major legacy retailers have struggled with the acceptance of these changes.  In hindsight now these changes are not difficult to recognize, however during the transition period the signs were easy to misread and this is exactly what happened during this period.  Consumers have not been shy about their demands however over the years the combination of the millennial generation growth and the growth of consumer technology have allowed consumers to push through the hesitation of retailers.  

Retailers must address these changes in the marketplace as a business process evaluation and modification challenge.  This requires evaluation of the facts in order to understand the business problem and then take the steps to redesign the processes, focusing on the current reality of consumer purchase and delivery.  This is something that must be addressed with the greatest urgency and focus by the larger legacy retailers because I believe that it will require a redesign of the retail marketplace to increase flexibility and collaboration.  Collaboration across partners and consumers will have a major place in this redesign because the business process must be designed with a high level of flexibility including processes to detect consumer demands early to analyze and react to continuously improve the process to meet changing consumer demands.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?

Supply Chain Collaborative Execution

Success in the Omnichannel marketplace requires the elimination of both internal and external silos and collaboration across the entire supply chain, including, in fact, consumers.  Large, legacy, retailers have spent a lot of time and money in collaboration and coordination with the suppliers and carriers in obtaining and delivering products and supplies.  This collaboration network though must be expanded to support efficient movement of products across locations channels to improve the shopping and purchasing experience of consumers and especially to improve the product delivery service levels across market channels.  In addition to the expansion of collaboration with external partners success is also dependent on elimination of internal retailer silos and the addition of consumers to to the collaboration model.

Large retailers must increase their efforts to eliminate their internal silos to improve and increase the speed of the smooth flow of inventory and information.  This requires a culture change to support and encourage the flow of information across the entire retail organization and in order to ensure this retailers must change their KPI measurements to include the communication and flow of information, including and most especially, the accurate inventory positions and ability to locate inventory maintained within stores and distribution outlets.  Inventory accuracy across all channels will allow the retailer to improve their product delivery performance and shorten the standard delivery time.  In my opinion a key stumbling block to success and increases sales is the ability of large legacy retailers to guarantee standard delivery of inventory within 3 - 5 business days and a key underpinning of this ability is inventory quantity and location accuracy.

This is only one piece of the equation though and the next critical piece is the relationship with the consumer.  This means the increase and focus on consumer communications and especially collaboration.  Retailers already enacted a means for one way communications with consumers through rewards programs where the retailer can push communications via various methods such as email, Twitter and text messaging.  These same retailers also have the ability for two way communications through Facebook and Twitter that can be used to increase the opportunities for collaboration with consumers.  Retailers must expand their use of these tools in order to develop and improve the relationship with their customers.  

Consumers are using technology and social networks to expand their shopping and purchasing capabilities in support of their lifestyle changes.  This means that consumers are no longer limited by channel or retailer for their shopping and purchasing.  The large legacy retailers must accept this change and break down their internal silos and change their culture to support and incorporate the changes demanded by their customers.  You can see some of the large large retailers beginning this process now and their velocity of change must be increased in order to succeed in the changing marketplace.  Retailers cannot afford to delay in decisions or enacting change because the rate of consumer demands and change is only increasing and will leave the retailers further behind as these changes increase.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?