Retail stores can't handle omnichannel fulfillment on their own
To successfully conduct e-commerce with an omnichannel fulfillment strategy, retailers will have to let supply chain managers oversee pick, pack, and ship at stores.
If retailers are going to be successful in conducting e-commerce with an omnichannel fulfillment strategy, then supply chain managers will need to get involved in some aspects of store operations. That's because—as the results of a recent study I was involved in made clear—retail stores are not capable of efficiently filling online orders.
The findings of the research on omnichannel distribution, which I worked on with Steve Banker of ARC Advisory Group, points to the problems encountered when stores perform pick, pack, and ship activities for Web-ordered merchandise. The study was conducted for Supply Chain Quarterly's sister publication, DC Velocity magazine.
Thirty-five percent of the 177 retail executives who participated in the study said they filled online orders from stock in their retail stores, and another 18 percent were doing so only at selected outlets. Now, if stores want to fill online orders, they obviously have to know what's in stock. Yet only 30 percent of respondents reported that their store inventory-accuracy level reached 98 percent or higher. That's noticeably lower than the cycle-count accuracy levels of nearly 100 percent achieved by distribution centers that are using warehouse management software.
One possible reason for the low accuracy rate was that most respondents failed to take advantage of point-of-sale (POS) information to update store inventory. Only 46 percent of the study sample said they use POS information to keep in-store inventory up to date. That's a concern, because a dearth of information on the whereabouts of items in the store could lead to retailers making promises to online buyers that they cannot meet.
There's another key issue associated with stores filling online orders, one that's so obvious that it should go without saying: Retail store operations are designed to sell products to shoppers; they are not set up, like distribution centers, for the efficient handling and picking of orders. For in-store order fulfillment to work, moreover, personnel must be taken away from cash registers, stocking shelves, or helping customers to pick and pack online orders.
If retailers want to successfully engage in omnichannel commerce using store inventory for online orders, then, they will need specially trained personnel in the stores to handle those assignments. And, I believe, those employees should be under the control of the supply chain chief, not the store manager.
In other words, if supply chain executives don't oversee pick, pack, and ship at the retail outlet level, then their retailer employers will fail at e-commerce.
Editor's note: For more about the omnichannel distribution study's results, read "Stores: the weak link in omnichannel distribution." The research will also be the topic of a special webcast on October 15, 2013, at 2 p.m Eastern/11 a.m. Pacific. Watch for details on DC Velocity's website. In addition, Steve Banker and I will be presenting the findings at the Council of Supply Chain Management Professionals (CSCMP) annual conference in Denver in October. I hope to see you there.
Supply Chain Xchange Executive Editor Susan Lacefield moderates a panel discussion with Supply Chain Xchange's Outstanding Women in Supply Chain Award Winners (from left to right) Annette Danek-Akey, Sherry Harriman, Leslie O'Regan, and Ammie McAsey.
Supply Chain Xchange recognized four women who have made significant contributions to the supply chain management profession today with its second annual Outstanding Women in Supply Chain Award. The award winners include Annette Danek-Akey, Chief Supply Chain Officer at Barnes & Noble; Sherry Harriman, Senior Vice President of Logistics and Supply Chain for Academy Sports + Outdoors; Leslie O’Regan, Director of Product Management for DC Systems & 3PLs at American Eagle Outfitters; and Ammie McAsey, Senior Vice President of Customer Distribution Experience for McKesson’s U.S. Pharmaceutical division.
Throughout their careers, these four supply chain executive have demonstrated strategic thinking, innovative problem solving, and effective leadership as well as a commitment to giving back to the profession.
The awards were presented at the Council of Supply Chain Management Professionals (CSCMP) annual EDGE Conference in Nashville, Tenn. In addition to the awards presentation, the leaders discussed their leadership philosophies and career path during a panel discussion at the EDGE conference.
The surge of “nearshoring” supply chains from China to Mexico offers obvious benefits in cost, geography, and shipping time, as long as U.S. companies are realistic about smoothing out the challenges of the burgeoning trend, according to a panel today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Those challenges span a list including: developing infrastructure, weak security, manual processes, and shifting regulations, speakers said in a session titled “Nearshoring: Transforming Surface Transportation in the U.S.”
For example, a recent Mexican government rail expansion added lines to tourist destinations in Cancun instead of freight capacity in the Southwest, said panelist Edward Habe, Vice President of Mexico Sales, for Averitt. Truckload cargo inspections may rely on a single person looking at paper filings on the border, instead of a 24/7 online system, said Bob McCloskey, Director for Logistics and Distribution at Clarios, LLC. And business partners inside Mexico often have undisclosed tier-two, tier-three, and tier-four relationships that are difficult to track from the U.S., said Beth Kussatz, Manager of Northern American Network Design & Implementation, Deere & Co.
Still, dedicated companies can work with Mexican authorities, regulators, and providers to overcome those bottlenecks with clever solutions, the panelists agreed. “Don’t be afraid,” Habe said. “It just makes sense in today’s world, the local regionalization of manufacturing. It’s in our interest that this works.”
A quick reaction in the first 24 hours is critical for keeping your business running after a cyberattack, according to Estes Express Lines, the less than truckload (LTL) carrier whose computer systems were struck by hackers in October, 2023.
Immediately after discovering the breach, the company cut off their internet, called in a third-party information technology (IT) support team, and then used their only remaining tools—employees’ personal email and phone contacts—to start reaching out to their shipper clients. The message on Day One: even though the company was reduced to running the business with paper and pencil instead of computers, they were still picking up loads on time with trucks.
“Customers never want to hear bad news, but they really don’t want to hear bad news from someone other than you,” the company’s president and COO, Webb Estes, said in a session today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
After five or six painful days, Estes transitioned from paper back to computers. But they continued sending clients daily video updates from their president, and putting their chief information officer on conference calls to answer specific questions.
Although lawyers had advised them not to be so open, the strategy worked. It took 19 days to get all computer systems running again, but at the end of the first month they had returned to 85% of their original client list, and now have 99% back, Estes said in the session called “Hackers are Always Probing: Cybersecurity Recovery and Prevention Lessons Learned.”
The first full day of CSCMP’s EDGE 2024 conference ended with the telling of a great American story.
Author and entrepreneur Fawn Weaver explained how she stumbled across the little-known story of Nathan Green and, in deciding to tell that story, launched the fastest-growing and most award-winning whiskey brand of the past five years—and how she also became the first African American woman to lead a major spirits company.
Weaver is CEO of Uncle Nearest Premium Whiskey, a company she founded in 2016 and that is part of her larger private investment business, Grant Sidney, Inc. Weaver told the story of "Nearest" Green—as Nathan Green was known in his hometown of Lynchburg, Tenn.—to Agile Business Media & Events Chairman Mitch MacDonald, in a keynote interview Monday afternoon.
As it turns out, Green—who was born into slavery and freed after the Civil War—was the first master distiller for the Jack Daniel’s Whiskey brand. His story was well-known among the local descendants of both Daniel and Green, but a mystery in the larger world of bourbon and a missing piece of American history and culture. Through extensive research and interviews with descendants of the Daniel and Green families, Weaver discovered what she describes as a positive American story.
“I believed it was a story of love, honor, and respect,” she told MacDonald during the interview. “I believed it was a great American story.”
Weaver told the story in her best-selling book, Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest, and has channeled it into an even larger story with the founding of the brand. Today, Uncle Nearest Premium Whiskey is made at a 323-acre distillery in Shelbyville, Tenn.—the first distillery in U.S. history to commemorate an African American and the only major distillery in the world owned and operated by a Black person.
Weaver and MacDonald's wide-ranging discussion covered the barriers Weaver encountered in bringing the brand to life, her vision for where it’s headed, and her take on the supply chain—which she said she views as both a necessary cost of doing business and an opportunity.
“[It’s] an opportunity if you can move quickly,” she said, emphasizing a recent project to fast-track a new Uncle Nearest product in which collaborating with the company’s supply chain partners was vital.
Uncle Nearest Premium Whiskey has earned more than 600 awards, including “World’s Best” by Whisky Magazine two years in a row, the “Double Gold” by San Francisco World Spirits Competition, and Wine Enthusiast’s “Spirit Brand of the Year.”
CSCMP’s EDGE 2024 runs through Wednesday, October 2, at the Gaylord Opryland Hotel & Convention Center in Nashville.
This story was updated on October 1, 2024.
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Miquel Serracanta of CSCMP International, Mark Baxa of CSCMP, and Sebastian Jarzebowski of Kozminski University sign an agreement making Kozminski University the newest CSCMP Academic Enterprise Member.
The Council of Supply Chain Management Professionals (CSCMP) and Kozminski University, a business school based in Warsaw, Poland, inked a deal on Sunday night, making Kozminski CSCMP’s newest Academic Enterprise Member.
This three-year collaborative membership will involve Kozminski using CSCMP educational content in its undergraduate supply chain program. As a result, Kozminski’s graduates will leave the program not only with a bachelor’s degree from the school but also certified through CSCMP’s SCPro certification program.
“This partnership emphasizes the global reach of CSCMP’s certification program and its applicability worldwide,” said Mark Baxa, CSCMP’s president and CEO.
Kozminski University’s Academic Director of Logistics and Supply Chain Management Sebastian Jarzebowki was on hand to sign the agreement at the CSCMP EDGE Conference in Nashville, Tennessee. Jarzebowski said that his students will benefit not only from receiving a globally recognized certification but also from joining a network of supply chain professionals.
Kozminski University joins the EAE Business School in Barcelona and the Rome Business School in the CSCMP Academic Enterprise Program. Baxa sees the membership program as a growth platform for the industry association not only in Europe but also worldwide.