Disruptive Forces On Supply Chain

Over the last 20 years there have been many disruptive forces on the supply chain, each one of these forces, whether technical or operational in nature, have made their mark on the supply chain indifferent manners to bring transformation to the supply chain. While disruption is not new to the supply chain the velocity has increases to a level of discontinuous disruption with cycles of continuous disruption driven by combinations of technologies, operational practices to incorporate the the technologies and the growth of collaboration and point solution providers in the supply chain. The disruption comes from putting together new solutions by combining these factors in new and creative ways to meet the demands. The greatest disrupting factor though is the the technology and the end consumer use of new technologies and collaborative opportunities.




The end consumer is eventually the customer that purchases the finished goods and the disruption starts and end there. The end consumer has embraced the the technology across generations now and there is an increased demand from younger generations that have grown up with and are comfortable with the technologies. I think that the growing acceptance and comfort in the technology from consumers is probably the greatest disruption force on the supply chain. This is, I believe, ground zero, for the disruption and the supply chain is driven by these disrupting forces of the consumer that now has the ability to build their own capabilities. Consumers now can develop their own shopping and and purchasing capabilities utilizing mobile technologies and network improvements that were not imaginable fifteen years ago and as the comfort and acceptance of technology has grown the disruption from the consumer demands has grown.




The supply chain is buffeted by these demands and is continuously looking to streamline and optimize the the disruption to bring transformation of the supply chain to support the demands. Technology has played a huge role in this supply chain transformation and the signs and direction forecast only increased disruption through technology. These demands have forced the supply chain to build a more collaborative network of their partners in order to quickly and efficiently sense and respond to the disruptive forces. Probably the greatest tool incorporated by the supply chain in their drive to react to these disruptive forces are data and analytics tools.




I believe that in the disruptive transformation of the supply chain the silver bullet factor, if you will, is data and the tools to analyze the data to allow the supply chain to effectively sense and respond to these forces. The knowledge brought about through the analysis of data will provide the supply chain with tools to identify trends and react more quickly than before and the objective for the supply chain in this current environment is reaction time. This is all new ground being covered and there are no off the shelf solution in the analytics of the data and then just to make things a little more difficult, the same data will mean different things to different partners within the supply chain. This requires the supply chain network to create a highly collaborative network to sense and respond to the same demands in the ways that make the most sense for each partner. The collaborative network will allow the supply chain to quickly sense and respond to the demands.

Innovation Cycle In Supply Chain

We have entered into a time of discontinuous disruption that is being driven by innovation demands in the supply chain. This disruption is spawned by recent innovations driving new demands that are in turn driven in large part by the technology improvements and capabilities. These demands have create an innovation cycle in the supply chain that has produced amazing results and produced a framework through data analytics and artificial intelligence to support the discontinuous disruption cycles through the innovation cycle responses resulting from the analytics and artificial intelligence innovations. In the future this will become the expected norm in the supply chain and will require increasing innovation in analytics and artificial technology delivered through a highly collaborative extended supply chain network to meet the disruption.




The question comes now of how to continue to meet the innovation demands in the supply chain in order to react and meet the disruption that is driven clearly by technology and customer demands. I am referring in this case to customer / partner demands in the extended supply chain, in other words, everyone in the supply chain is feeling the pressure from demands of their customer / partners and every partners is demanding innovation to meet the disruption in their process and procedures from these demands. In the extended supply chain demands and disruption can only be met with collaboration and innovation. The extended supply chain has been building the network and the collaborative partnerships especially over the recent years to give them the foundational tools in collaboration to meet the disruption in an efficient and robust manner.




This is now where all the efforts to build a robust collaborative network to provide the framework and foundation for partner integration comes into play to provide the basis to support the types of innovation required to support the demands. This network provides the ability for partners across the supply chain to plug in to provide goods and services to support the innovation demands. This is really where the value comes from the collaborative network. Innovation cannot be delivered in this environment without a robust collaborative network that can adjust and support the demands. As an example, the collaborative network provides the framework for pop-up point solution providers to jump in to quickly and efficiently support changing demands thereby eliminating the requirement for the service to be developed internally by a partner. This method of collaborative delivery is much more efficient than any previous model for supporting changing demands and discontinuous disruption.




The final piece of the puzzle necessary to support the innovation cycle in the supply chain is the control tower framework that supports efficient integration and collection of data that is necessary to support the data analytics and the artificial intelligence demands that are driving the successful response to the supply chain demands. Everything runs on data today and without a robust control tower framework to manage the efficient collection and integration of data the supply chain would quickly be overwhelmed with the changing demands. The control tower provides the means for the analysis and reaction to changes in the most efficient manner.

Disruptive Innovation In Supply Chain

There are so many factors driving transformation and disruption now in the supply chain that we have moved from a model of discontinuous change to a model of discontinuous disruption. The disruptions in the supply chain now are driven by the developments and incorporation of new capabilities that are more and more identified and developed utilizing the information and capabilities delivered by increased capabilities in data analytics and artificial intelligence technologies. The pieces of technologies are being brought together through the immense amount of data and abilities to fully utilize the data that themselves have been made possible by technology. In the same way that technologies have allowed consumers to mold their professional interactions to meet their lifestyle needs, technology is also supporting the supply chain and extended partners to meet the supply chain business interaction and operational needs.




In a very real way consumers are driving the disruption through their embrace of technology combined with increased network capabilities that are blending their interactions across every corner of their professional interactions. Supply chain leaders and partners have embraced growth in data analytics that is made possible by technology improvements in data storage, network improvements to move the data and then most importantly the computing power improvements to drive the data analytics growth in capabilities to analyze the data available to understand and define direction and capabilities required to improve the supply chain to meet the demands. The supply chain supports the consumer demands across all industries and the computing power along with the network capabilities available to every individual across the supply chain is driving the discontinuous disruption.




The pieces of discontinuous disruption have been developed and also been growing in their use in the supply chain starting with the growth of the Internet of Things technologies and tools and naturally expanding in the supply chain arena into automation of processes and then add to this the robotic movement that is growing now, especially in the third party logistics industry and you can see that these pieces required a technology and capability to coordinate and connect the dots. All of these technologies are collecting immense amounts of data for the supply chain to utilize to improve the services and increase their capabilities without necessarily increasing the long term costs.




Supply chain leaders are using these technologies and really driven by their own imagination and questioning ‘why not’ to drive this growth and expansion of supply chain processes and operational improvements and most importantly efficiencies. These technologies are disrupting through the implementation and growth of automated operational and process improvements that are driving efficiencies into the supply chain. The true disruption innovation in the supply chain is the imagination that has been released through the implementation of these technologies that are driven in large part by the improvements in analytics and computing power to release and encourage this imaginative approach to disruption.




This is the amazing thing in my opinion, that the consumer is at the center driving the disruption into the supply chain industry based on their demonstrated imagination and use of technologies to put together their own solutions. This has driving the basic need in the supply chain to understand and maintain the velocity of disruption in the supply chain processes and operations in order to meet the business partners that are now driving the same types of demands into the supply chain.

Low Carbon In The Supply Chain

Low carbon initiatives in the supply chain are important for both current and future supply chain initiatives because of the growing focus on climate change and the impact of the supply chain on the climate initiatives. The supply chain transformation includes low carbon as a key tennant resulting from the transformation initiatives that will impact the supply chain carbon footprint, especially demand forecasting improvements across the entire supply chain. Because the extended supply chain plays such a large role in the overall climate improvements initiatives it requires a focus from the supply chain to delivery on the improvements in a manner that does not dramatically increase the costs to the consumer. Also, and most importantly, these low carbon initiatives support the supply chain initiatives currently driving the transformation of the supply chain and the extended supply chain partner and services.




Low carbon initiatives have been an integral part of the supply chain for a long time. In reality low carbon initiatives started a long time ago with a focus on reducing costs of transportation in the supply chain to improve profits and these initiatives really kickedinot gear with the increases in fuel prices. These increased costs drove improvements in transportation efficiencies and with these efficiencies reduced carbon levels. The improvements in efficiencies was also coupled with new regulations into emissions which in turn also pushed increased efficiencies. These costs though were essentially a zero sum gain because the increased efficiencies driving the reduction in fuel consumption more than anything simply covered the costs of increased fuel.




Then regulations began to impact the supply chain by spreading the focus from transportation into buildings and also locations of the distribution centers to improve the transportation efficiencies. These regulations were coupled with tax incentives to offset the costs and entice supply chain partners to convert and build using the new efficiencies. These are also driving supply chain partners to reduce their carbon footprint through solar energy, low power LED lighting, increased insulation to reduce heating and air conditioning cost along with increased safety through the implementation of these measures. These building regulations though expanded the low carbon initiatives into the warehouse, distribution center and offices thereby lowering the overall carbon footprint of the supply chain along with the entire business community.




The supply chain in the last five to ten years has increased use of intermodal transportation methods to increase efficiencies in long haul transport, especially from import ports around the coasts. This is another area where the outcome will provide benefits to the environment while also not increasing the costs in the supply chain. In fact, I think this is one of the major areas where the impact on the environment and the supply chain may result in reductions. We are quickly reaching the point where transportation demands in delivery time reductions and efficiencies in the volumes of deliveries demand a model that takes into account all factors in the supply chain to develop the most efficient, cost effective and environment neutral solutions.




The latest piece in the puzzle is the use of the data analytics and artificial intelligence to develop highly efficient solutions that are flexible and highly efficient to improve the end to end supply chain while maintaining and reducing costs. We have reached the limit, I think, of what I would call non-assisted solutions and artificial intelligence solutions can take the vast amounts of information available to analyze and develop new solutions. The demand for low carbon solutions is only increasing and the supply chain will continue to be at the forefront of these solutions through the implementation and integration of AI designed solutions.

Artificial Intelligence Improving Logistics

Over the last few years there has been a great deal of interest and development in the area of artificial intelligence (AI) and the potential to improve the supply chain and logistics. There is an immense amount of data available across the supply chain from a combination of Internet of Things (IoT) devices connected directly to supply chain partners and the partners across the supply chain network. In addition to the data produced internally to the supply chain there is now also an immense amount of data available from external customers to the supply chain partners though the direct interaction with in the supply chain through through partner portals and direct interactions through integration points with supply chain external customers. The Internet and online interactions provide this data and supply chain partners would be foolish not to use this data to improve their logistics capabilities.





The challenge though for the supply chain has been two fold, how to utilize the data and what data to collect for the analysis and use of the data. Artificial intelligence starts with the collection of data for analysis and this is an important starting point. There is no way early on in the journey to determine what data will be important because the analysis must be performed first to understand the foundation and the potential. The intelligence part of the analysis also requires a great deal of information in order to validate the the hypothesis and then to determine direction based on the intelligence. Starting with the data then you can see why it is so important to collect everything because the intelligence part of the equation will generally require additional data from the same periods to confirm and validate direction.





It is important to collect all data then because you cannot tell what may be important for the analysis and then determining direction. The good news here though is that storage is cheap and the technology to analyze vast amounts of data has been improved through the improvements in technology. These two points have probably done more for the growth and development of artificial intelligence than any other developments over the last few years. These improvements in technology allow the supply chain to refine and redirect logistics activities and practices based on facts and data rather than hunches and hopes. Combine these two technologies with the growth of the Internet of Things capabilities and technologies and the potential for improvements is almost overwhelming.





These capabilities bring improvements and opportunities in automation including warehouse location and slotting, drones and robotics to improve efficiencies and reduce costs. These are not the only areas of improvement to the achieved through artificial intelligence. There will be improvements in volumes, inbound and outbound, forecasts for instance, that will bring dramatic change to the supply chain as the extended partners in the supply chain, especially manufacturers and transportation providers as the revise their processes to incorporate the analytics into their plans and procedures. The warehouse operation though will also be dramatically impacted as artificial intelligence brings the analytics to the equation that allows the operation to understand and immediately adjust labor forecasts to changes in the operation during the date based on near real time events. Artificial intelligence is just another force bringing transformation to the supply chain and the supply chain must start with a baseline of continuous improvements in the flexibility and continuous change practices in order to meet the transformations.

Smart Manufacturing Impact On Retail

The retail marketplace is poised now to truly leverage the capabilities and benefits of smart manufacturing with the integration and expansion of the collaborative retail network. Smart manufacturing provides capabilities to customize and deliver on demand and the practices in smart manufacturing supporting the efficient product changeover and customization allows retailers to refine and expand their offerings into a type of endless aisle without the expense of manufacturing an endless aisle of inventory. This is just one example of the opportunities available with the combination of the collaborative network when combined with the capabilities of smart manufacturing. This can be the next wave of improvements in the retail shopping experience and is really just in the infancy of development and implementation in the retail marketplace.





I believe that retailers have a great opportunity to develop a relationship with smart manufacturers to enhance the consumer shopping and purchasing opportunities for new and customized products for customer purchasing. This will be an awesome development in the retail shopping experience and is an important improvement and additional transformation for the consumer shopping experience. This capability potential from smart manufacturing combined with the capabilities of the collaborative network provide the framework for the next retail transformation.





I see this transformation utilizing smart manufacturing to start from two different directions both the smart manufacturer through direct interaction with consumers and through specialized service providers that partner with smart manufacturers. This will be the first wave of transformation in the retail marketplace because of the traditional retail culture this marketplace change will start with the small and nimble providers that are experimenters and forward thinking. The benefit to the marketplace starts with the collaborative network that provides the framework for the types of services and offerings that are required to introduce the opportunities from smart manufacturing.





Retailers and especially the large retailers should focus on embracing these capabilities offered by smart manufacturing to refine their product development and replenishment strategies. The smart manufacturing capabilities will provide retailers with the opportunity to develop a replenishment strategy to reduce overstock and refine and improve the replenishment cycle in a manner that transforms their forecasting and replenishment to reduce overstock and the costs associated with overstock. This requires though retailers to reevaluate much of their retail strategy because of the recent growth and expansion of the overstock marketplace. The capabilities fit perfectly with the collaborative network capabilities though and this is why it will catch fire with consumers.





Unfortunately, from an historical perspective, the large retailers have historically followed the lead of smaller retailers to experiment and develop the new technologies or capabilities in the retail experience. This needs to change though because of the speed in which the retail marketplace is changing now. The marketplace development is not slowing down and every new development and improvement in the marketplace is in fact speeding the changes in the market. This should be the next focus for the large retailers in their transformation because consumers will embrace these capabilities because it fits right in with their lifestyles.

Conversational Commerce

The retail omni market along with the entire retail supply chain collaborative network is being driven by consumer demand towards a transformation into a social commerce, or conversational commerce, marketplace. I think the conversational commerce name is highly descriptive of the transformation and provides a highly descriptive name to the next transformation wave. The next transformation wave will be focused on the two way interaction between customer and retailer or customer and service provided or retailer and service provider, I’m sure you get the drift. The next transformation will eliminate the hierarchy across the retail marketplace and replace the hierarching with direct connections to the appropriate partner at the appropriate time in the retail transaction. The benefits of this model are dramatic for all parties involved and provide the framework for interaction through the next transformation wave.




Conversational commerce is the next logical step in the transformation of the social commerce marketplace and provides a great way to frame the transformation. The focus of conversational commerce is a two-way interaction connections between consumers and partners to support shopping and purchasing in the omni market. This is a further clarification and more importantly an enhancement to shopping and purchasing in the marketplace. This creates a virtual shopping capability that incorporates virtually the interaction that normally occurs in the physical retail shopping trip. It provides the ability to interact across all of the parties involved in the shopping experience to provide the value added services and products during the shopping experience that would be difficult in the current standard eCommerce or omni market shopping experience. The two-way interaction is a very powerful tool that will improve the shopping experience and increase the opportunities for additional sales and add-on services.




The transformation definitely requires a means to coordinate and direct the communications across the involved parties and this is where the control tower concept and technology comes into play. A control tower framework is required to provide a plug-and-play framework for communication and collaboration with external partners and even consumers that allows the partners to focus on the business benefits rather than the communication requirements. The control tower framework must be embraced and implemented across all of the partners to maintain the communication and realize the benefits. This framework provides the basis for integration from a message perspective to allow the partner to communicate with a partner in the most efficient manner for the partner while maintaining a clean and stable interface with their own internal systems. The framework provides an externally facing tool that is flexible and robust to simplify the addition and integration with other partners, it does not eliminate the work to external partners, it eliminates the work on the internal integration though to the business applications.




Conversational commerce focuses on the two way communication between partners, including manufacturers, transport, service providers and consumers. This model will transform the omni channel retail marketplace again based on the consumer lifestyles and the consumer embrace of technology to support the social network. Conversational commerce is another term for what I have been calling social commerce which is the two way direct communications with all players or partners involved in the retail marketplace. Consumers view retail shopping as a social experience which is why malls were so successful and now the consumers are using conversational commerce to create a virtual mall.

Predictive Analytics In Omni Market

Retailers and their supply chain partners including carriers, manufacturers and other service providers have come into a treasure trove of data for analytics and the challenge is using this data to guide their interactions with consumers and other supply chain partners to improve the retail omni market shopping and purchasing. The wireless and network capabilities provide these partners and retailers with a great deal more data than was available from the brick and mortar outlet only and they are taking advantage of this information in many ways to improve consumer shopping and also the products and services offered to consumers. Combine the data available with the connectivity of the collaborative network and the consumers have the opportunity now to collaboration with the retail market as a whole to transform the way that consumers interact with the marketplace.




You see the reactions from the data analytics now in every outlet that interacts with consumers, from delivery services supported by the individual retailers to the final mile delivery customization now offered from UPS and FedEx. These services will start to expand across multiple partners with the expansion of the collaborative marketplace. This is the next frontier really, to socialize teh predictive analytics to put together combinations of services and offerings crossing the entire marketplace. All partners in the marketplace should be building the social network capabilities to allow theme to fully utilize the data and improve the support and interactions with the consumer.




The marketplace now is made up of a series and groups of partners that support different aspects of the consumer shopping experience. This is changing and flattening the relationships across the network that creates a flat social network with the center being the consumer and the network being the partners supporting the individual consumers shopping experience at that point in time. The partners in the marketplace must use data collected from consumers utilizing predictive analytics practices to determine the types of goods and services that will support the consumer demands at that point in time. This means that the collaborative network is critical to the marketplace to meet these needs.




This end result of this transformation of consumer shopping and the marketplace is that there is no single partner in the network that can support all the needs of the consumer and that the goods and services must have the capability to be put together at the point in time of the consumer shopping. This calls out the importance of the collaborative network to support the consumer demands across retailers, suppliers, carriers and specialized service providers. Another important point of this observance is both the importance and the benefits of retailers participating in the collaborative network and the benefits to the retailer of this network. The collaborative network allows the retailer to focus on the activities that differentiate them from others and utilize the collaborative network to support the standardized processes and procedures. This is extremely important for retailers, and especially the large retailers, because they can then focus on the data collected to support refinements and improvements in predictive analytics.

Next Wave For Retail

The next wave for retail is the convergence of the internal business networks that include the supply chain partners and the external social network that includes consumers and the variety of social network sites and connections. The consumer is driving this convergence through their use of network services and connectivity as they are building their own network of connections for services and goods along with their connections to not only retailers but the extended supply chain partners such as transportations services and manufacturers. The consumer network and computing capabilities, especially mobile capabilities, have given the consumer the tools to build their own social commerce network and many service providers have recognized this and have developed and continue to develop new services that allow the consumer to create their own personalized shopping and purchasing capabilities.




There are two things bringing this together; the computing and network capabilities, and second is new service providers taking advantage of these changes. A big part of this next wave is how retailers and service providers utilize localized and personalized services in their practices. These services will provide the secret sauce that will fuel the next wave of retail. This has been growing for a while now through experimentation, consumer experimentation and service providers. You can also see that some retailers have embraced the wave and are working towards developing the market in this direction.




I see the key aspect to the next wave as the localization of services and especially as it relates to interactions with consumers, the personalization then can grow as a result of the localization. Consumers have been using social networks and technologies for a while now to develop their own virtual shopping practices and even virtual shopping malls of their favorite retailers. They are using the services that are available from mobile app developers and now Google has jumped into the localization with both feet to provide consumer capabilities to search and shop based on their current location and even their destination location.




The Google developments and offerings they are providing through Maps alone will drive the localization of eCommerce to new levels. Retailers, restaurants and entertainment are offered and consumers are providing the personalized evaluations, ratings and recommendations on goods and services. Consumers are already tapping into these services in their shopping and travel decisions and retailers must recognize this and then take actions to incorporate the capabilities into their plans, services and offerings. Google is commercializing these services to expand their apps and services further into the lives of consumers and retailers and other service providers have a great reason to embrace this capabilities in their offerings to support their own sales and services.




Fortunately for retailers and service providers Google, for one, is providing the framework for localization that can be utilized by retailers and they are happy to provide this framework for others because it extends the Google brand and the data Google is able to obtain from this framework. This is an important benefit that should also push retailers into this next wave; the amount of customer data available as a result of this localization and personalization can be immensely valuable to retailers.

Localized And Personalized eCommerce

One of the benefits of the technology and network improvements and especially in the last couple of years is the opportunity for retailers to personalize the offering a customer is shown and then the ability to alert customers to local specials and even alert customers of sale offerings when the consumer gets close to a retail outlet. These are big deals in the retail marketplace and the next logical step for retailers to utilize technology and consumer purchasing and shopping information that is collected through their rewards programs. This is my definition of localized and personalized; the ability to specialize offers based on location and then in addition the ability to personalize the offers based on consumer shopping and purchasing habits. The technology capabilities provide the retailer with additional information to target specific audiences to encourage shopping and purchasing.




The power of the technology is the ability to use the technology to localize interactions with others. Personalization provides two opportunities for interaction with consumers to focus the offering to the shopping and purchasing practices based on the individual and to reach out to the consumer as the are shopping or even entering into the localized retail outlet. You see more and more of this technology now from mobile technology and many apps from shopping, mapping, food and social networking. As an example mobile payment such as Google Pay, Samsung Pay or Apple Pay alert when you enter within a localized area that accept payment to provide reminders and offers. These technologies provide a great deal of opportunities to tie together the pieces and parts of both data and shopping capabilities into a compelling offering of reminders and hints that generate snap purchases that may not have happened without the nudge.




I believe this is the next area of consumer focus and opportunity and will drive the next wave of transformation through the retail network. The previous wave focused on demands to support shopping and purchasing operational capabilities for purchasing and delivery across the marketplace and channels. Those changes flattened the channels into an omni channel marketplace. Now the next wave of social demands will focus on connectivity and personalization across the marketplace to extend the omni market capabilities and most importantly extend the direct consumer contact across the extended supply chain collaborative network and the network partners.




There is another transformation in the marketplace to refocus the center of control from retailers to the customer to allow the customer to customize shopping and purchasing based on their needs or demands at the time of shopping. This transformation brings together the supply chain partners and service providers with the consumers as the center of the shopping network. This is really the next step in a virtual mall where retailers ‘cohabitate’ in the virtual mall as participants and the extended supply chain partners come together to provide the framework of goods and services to support this virtual mall concept. This is where the next wave of transformation will be focused and in this wave the focus will be on localized and personalized eCommerce to bring the consumer to the table. This will be the focus of the next wave and will drive the next wave of disruption that retailers must address.

 

Control Tower and Social Network In Retail

The collaborative supply chain network and the integration of social networking practices in the retail omni market is the perfect application for a control tower framework to support the integration and coordination of the communications across the network. A key aspect to this network framework is the distributed nature of the integration and communication that is not focused on any one partner or function within the network and this is one of the key strengths of the control tower framework. There is a great deal of disruption generated and driven by consumers through social network capabilities and their interactions between retailers and all partners in the extended supply chain and retailers must put a framework in place that will allow the navigation and through the network and the integration and collaboration with the partners in the network.




The control tower framework has been historically utilized to coordinate and support interaction and collaboration across the extended supply chain and this model fits very well with the social interactions and the collaborative network now developing and growing in the retail omni market. There are a great deal of touch points across the retail omni market and consumers are leveraging these touch points to support their lifestyle demands in their shopping and purchasing practices. These aspects are now disrupting the retail marketplace and present the next frontier for the retailers especially who will be required to support these changing demands.




Consumers have taken the lead in this interaction and the extended supply chain partners such as transportation carriers and manufacturers have encouraged and extended this interaction through their own new services and capabilities. This has caused the retailer to move from the center of retail marketplace to an orbit around the consumer and really on the same level as the other partners in the extended supply chain. I view this as the most significant development in the retail omni market and as such requires the next round of development from the retailers to support this new framework and new reality.




This framework becomes something of a virtual mall with the consumer at the center and the stores and services in this mall constantly developing and changing to support consumer demands. This framework requires a means for the partners to quickly connect to new partners, support new capabilities while insulating their internal business systems and operations from the storm of this discontinuous change cycle. In all of this the control tower framework provides the means to support the interaction of new partners, existing partners in new manners and new and changing services without upheaval of the partner business systems.




The retail marketplace is in a time of turmoil and transformation that will continue for the the foreseeable future. There is a critical need for the partners, and especially retailers, in the marketplace to implement a framework that allows them to support the external turmoil and allows the internal back office operations to continue without the same velocity of disruption. This control tower framework supports this need and demands effectively and efficiently and I see more partners in the marketplace embracing this framework moving forward.

Optimize Fulfillment Through Logistics

Customer order fulfillment services remain front and center in the priority list of retail services and capabilities and this will remain for the foreseeable future. The customer is continuously demanding improvements in fulfillment services in support of their changing lifestyles and this has been increasing in velocity of the years and again these changes in demand show no sign of slowing. These points come have been coming together to push the demands for change even earlier in the supply chain to require changes in supply chain logistics to support the fulfilment demands that are coming in quicker and more powerful waves. The supply chain and the partners in the supply chain from fulfillment services, to product and material supplies, to demand forecast and planning are all coming together now in the extended collaborative network to optimize fulfillment services.





According to Wikipedia ‘in a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations’. Based on this definition, fulfillment is a piece of the logistics chain and benefits from the improvements to the entire chain. This is important to understand the interactions and dependencies across the entire extended supply chain in order to understand both the demands on the entire supply chain and also the dependencies and interactions required to support the demands in any function within the supply chain. Based on these demands and the relationships across supply chain you can see the importance of the network and the importance of the means and the methods to communication across the entire supply chain in order to optimize the fulfillment services within the network.





Communication and collaboration requirements have increased dramatically and will remain a key requirement to the continued support of the changes across the supply chain. This requires a control tower network and process that allows the supply chain partners to plug in and provide integration and communication tools through the entire supply chain to reduce the cost and effort for new partners to participate and support new services and products across the entire supply chain. The retail extended supply chain cannot afford to continue in a command and control practice and procedures and must transition to collaborative practice a procedures in order to effectively support the demands with the velocity that the changes demand.





The extended supply chain partners are in a position now to support the changing demands to improve the end fulfillment of goods and services. The network partners are in place now with the goods and services to optimize the fulfillment and not only that but to also to provide the framework to support the changing demands. The focus now for the extended supply chain should be implementing the control tower communication and collaboration capabilities to support the collaborative interaction required to create the supply chain collaborative network. I believe we will begin to see an increase in discussions and topics focused on this control tower communication and collaboration tools and capabilities to support the optimization not only in fulfillment services but probably more importantly in the entire extended logistics supply chain.

Velocity Of Social Innovation In Retail

The velocity of change in the retail marketplace has been increasing for quite some time and this velocity will increase with the increased social innovation that is driven by consumers in their interactions. The social innovation has been embraced by consumers to implement changes and new capabilities using social networking capabilities in their retail shopping. Consumers have incorporated specialty service providers and specialty omni market retailers in their shopping and purchasing practices along with their social networking to meet the demands of their shopping and purchasing changes that are in turn have been embraced to support their changing lifestyles.  This combination of social network and the omni market network and network partners come together now to encourage a collaborative approach across the retail marketplace to support the velocity of the social innovation driven by consumers.

While retailers have been building out their operational capabilities to support purchasing and delivery demands across the entire omni market network, consumers have been utilizing their social network to develop new methods to shop and then utilize the purchasing and delivery capabilities developed by retailers in new and innovative ways.  Consumers are introducing increasing amounts of innovation through the use of specialty providers of services and even products to the omni marketplace to mold and specialize their capabilities by utilizing these social network capabilities to enhance the purchasing and delivery capabilities of the omni marketplace.

There have been a couple of developments in both the consumer social network capabilities and the retail omni marketplace that have helped to increase the velocity of social innovation; the introduction and expansion the specialty providers in both the retailer and the social network and the collaborative capabilities that have been growing and improving.  These capabilities are combined then utilizing the improved wireless networking capabilities and the growth and expansion of unlimited data on all of the wireless networks to bring about a discontinuous social innovation in the retail marketplace that is both increasing in velocity and the depth and span of the marketplace. In other words, consumers and speciality service and product providers are coming together now in ways that increase not only the level and amount of social innovation and also an increased velocity of social innovation.

The challenge that large retailers are facing now is the embrace of the social shopping capabilities and expansion of the retailer collaborative network to link and collaborate with the social shopping and specialty service and product suppliers that support eh social network to link the retailer into the expanding consumer capabilities. The challenge for these large retailers is their need to change to a collaborative interaction that enhances the social retail network of shopping, purchasing and delivery of products to consumers in this expanded collaborative network environment and then to plug into the social innovation of this network.  The challenge is the combination of the consumer social networking with the retailer supply chain purchase and delivery network to support the social innovation.

The forward thinking large retailers are beginning to realize there are many forces coming together in the larger omni marketplace creating a new reality where the retailer’s success and survival is based on their ability to integrate and become part of this network.  The benefit of the network to the retail marketplace is the ability to sense and respond to the velocity of innovation introduced by consumer demands along with the cost of this support being born by the network and not just by the retailer. This is the future of the retail marketplace and really the only way that retailers can hope to keep up with the velocity of change in the marketplace.

Social Innovation In Retail

Innovation across all aspects of the retail marketplace from shopping methods to the partner services support is driving the retail transformation and social interaction is driving this innovation.  Social interaction driving the innovation change to drive social innovation in the retail marketplace that is driving the disruption in the retail marketplace. The social innovation drive is bringing about a significant change in the marketplace by changing the control from centralized and driven by a small number of key players to a decentralized control mechanisms that are driven by the social interaction of the consumers with a wide range of partners that support the marketplace.  This decentralized control mechanism is driven by consumers and supported by point solution innovators in the retail marketplace to experiment with support of the changing consumer lifestyle.

Consumers have been going through a series of innovations in their shopping and purchasing over the years and now we have reach a point of technology capabilities and network capabilities that allows and more importantly, encourages the innovation to increase in velocity.  We have reached a point of convergence in the retail market with technology, consumer demands and retail partner collaboration where the market is now forcing retailers to participate in this social collaborative network. There is really no choice for retailers in this current environment and the retailers must engage in the network in order to prosper.  We are seeing the results of this across the marketplace in the reactions and plans, or lack of plans, from major retailers in their efforts to expand and integrate the consumer shopping experience seamlessly across all channels.

This integration of the consumer shopping experience across all channels provides the foundation for the social collaborative innovation in the marketplace.  I find it especially fascinating that you can see the difference in results between major large legacy retailers that have embraced the consumer demands from the retailers that have not embraced the consumer demands in the marketplace.  Forward looking retailers have embraced the consumer demands and the collaborative network capabilities and demands that buffeted the market over the recent years. These forward looking retailers have stepped up to understand and incorporate the capabilities into their practices and these are the retailers (I’m thinking of Macy’s and Walmart as key examples) that are preparing for the future innovations in the market and these are the retailers that will also drive the partners to view and understand and incorporate the capabilities to support the collaborative network to navigate and embrace the innovation.

Retailers really have a choice in this matter and the choice unfortunately is to embrace and drive the innovation in the market to survive, or to hold back and wait for the dust to settle and potentially fail.  The key force now is the velocity of the innovation that is driving the retail marketplace. In the past, retailers have been divided between innovators and large major retailers and the large retailers waited for the dust to settle and history to select the innovations that were accepted by consumers in order to change.  Unfortunately now because of the velocity of the innovation the large retailers no longer have an option to wait for the dust to settle, instead these retailers must develop the framework that allows efficient and quick change capabilities to incorporate new innovations and drop innovation that fails.

Maintaining The Innovation Chain

Maintaining the innovation change is both deceptively simple yet exceedingly difficult at the same time.  It's simple because it doesn’t cost a great deal of money to maintain, the key requirement and effort to maintain the innovation chain is simply to maintain a line of open and active communications across the partner network.  It is difficult because keeping a line of open and active communications requires a culture change that embraces the importance of the communications required to maintain the innovation chain. The culture change is the hangup that will lead to the failure and is really the most difficult to ensure over the long term.  The culture change must be allowed the time and the encouragement to success while the change is taking hold and becoming a mainstay of the innovation chain.

Many retailers and their partners embrace the culture change over the short team however do not have the patience to nurture and allow the change to become ingrained and part of the nature of the organization.  In addition to the the partners must have the patience to encourage the same changes in culture across the entire collaborative network in order to allow the change to become part of the network culture. This is very difficult because each partner is at different levels of change and different levels of engagement.  The commitment and engagement is a cyclical factor in maintaining the change and this is also encouraged by the active participation of the partners across the network, along with the resulting benefits derived by the engagement of the partners. This is where the change will most often fail, its not that the partners do not see the benefit, and it's not that the partners do not want to participate,  it is more that the partners feel they cannot sustain both the level of commitment and the level of engagement required to ensure the long term success of the innovation chain.

You see, partners can maintain short bursts of engagement across a large number of partners for a short period of time and these same partners seem to lose their focus and commitment after a period of time if they see no change or improvement in the key measurements.  The partners in the innovation chain must be encouraged to participate and this must be a constant and continuous encouragement to participate otherwise the partners will stop the methods and practices that encourage participation. The partners in the innovation chain will only try for so long without benefits and without the encouragement to participate.  This is a bit of faith that must be practiced so that when one partner is down another picks up the slack and takes on the responsibility for encouraging the others.

Just like everybody has an off day in life, every partner will have the off day or number of days where there must be another partner willing and able to step up and support the innovation chain while the others recuperate.  This is one of the benefits of the innovation chain, every partner does not need to be on their game all the time in order to succeed. The benefits of the collaborative network and the partners in this network is that they will carry each other during the ups and downs to support the demands and the needs of the innovation network.  There is really not a very high cost of entry and yet there can be a very high benefit achieved as a result of the active participation of the partners in the chain.

Innovation Chain

The collaborative network provides the foundation and the framework to support an innovation chain that will drive the continued retail marketplace transformation.  The market must address develop and maintain a means to interact directly with the entire chain of partners and consumers in order to react and direct the change demands from consumers.  Consumers have the means through technology to take a major role in these new developments and the retail market transformation. This collaborative network is the best vehicle to integrate emerging technologies and new services into the retail marketplace in an efficient and effective manner that supports the transformation without a great deal of disruption.  This is an important concept that the the partners across the marketplace must be aware and account for in the transformation so that momentum is not lost to address disruption and the transformation.

Consumer technology has been driving the transformation for a while now and in many cases during the initial days of eCommerce channel sales the retailers maintained control of the market and the shopping and purchasing.  During this time retailers were at the center of the marketplace and controlled the shopping and the purchasing, For all intents and purposes the early eCommerce offerings were electronic catalogs that provided consumers another channel to make purchases of the same products. During this time though the consumer technology and network technology were changing and consumers started using the technology for shopping and purchasing practices that supported their lifestyle changes and these changes really started pushing the transformation of the market.  

The center of innovation now has shifted from the retailer to the consumer and omni market service providers with the retailers now taking advantage of the services and capabilities that can be provided by the collaborative network.  The collaborative network is still in the conceptual phase of the transformation and there are still many areas for improvement along the way. The key though is the focus on the social network aspect of the collaborative network that provides a means to communicate and connect with partners and consumers through the social network framework.  This provides a great boost to the innovation chain in that it provides the framework to easily change with the consumer transformation of the retail marketplace.

The key benefit to the social network framework is the distributed connectivity supported by the framework that supports and encourages distributed connectivity that does not depend on any single centralized network connection routing.  This is a bit of a mouthful but the concept is simple; the distributed network encourages and supports non-centralized connectivity that allows the network partners to build and utilize connections based on the demands at the time and not based on centralized network connectivity requirements.  The challenge for the retailer is breaking the habit to control the activities and relationships as the center of the market and center of innovation. The shift now is to the consumer and the specialized service providers that are developing and supporting new services. This shift will only increase in velocity as new innovations and the new specialized service providers join the collaborative network based on consumer demands.  This innovation chain requires acceptance and support from retailers and one of the key benefits of this model for retailers is that the retailer can take advantage of innovation without a huge investment or risk of failure to deliver change.