8 fulfillment lessons for 2016-2017 from Bill Stankiewicz, www.savannahsupplychain.com
8 key fulfillment lessons for 2016-2017:
1. Inventory: Customers want buy-from-anywhere flexibility and an endless aisle of products. Retailers desire single inventory pool to control investment. Key challenges for retailers include system-wide visibility, in-store accuracy levels, technology capabilities and DC integration activities.
2. Labor: The cost of employment and labor turnover issues justify a new model for DC operations. To solve this issue, retailers should analyze ROI for automation opportunities. To achieve this goal, retailers have to be able to justify major investments and integrate omni-channel operations. In many operations about 25% of the management are of age 55+.
3. Time: Customers expect an array of rapid fulfillment options and no-cost delivery. Retailers must match capacity and capabilities to volume and service requirements.
4. Space: Creating separate fulfillment facilities for uncertain volume carries significant risk.
5. Transportation capacity: Carriers are more selective about lanes served and strategic customer relationships. Retailers must be creative and think long-range when developing transportation strategies. The problem is that innovation options are limited and some retailers continue to be plagued by the aftermath of port disruption.
6. Transportation cost certainty: In 2015, we saw the implementation of dimensional (DIM) weight pricing. Retailers have been since assessing the impact of this new parcel pricing strategy. Key challenges include the volume of split ships, store personnel training and packaging options at stores. Right now many large truckload/LTL carriers are installing scales with dim measurement equipment that will automatically check weights/dims; to a cost matrix off bill of ladings to be sure they conform to correct costs. This is a low hanging fruit for the carriers to be sure costs are accurate & they will continue to unload non profitable or low margin customers.
7. SOLAS is the most commonly used name referring to the International Convention for the Safety of Life at Sea. This convention is in place under the International Maritime Organization, and it serves as the basis for the regulations in place for goods that are shipped, via waterway, globally. You will see a major development that is scheduled to go into effect on July 1, 2016 . On this date, every shipping container travelling on the water will need to be accompanied by a signed (electronically or physically) document that contains the container’s verified gross mass. This weight verification is the responsibility of the party shipping the goods, and therefore applies to EXPORT shipments from the country of origin.
8. Omni Channel Challenge for shippers/suppliers/retailers:
Nielson: Nearly 50% of U.S. smartphone owners are using shopping apps each month
Booz & Co.: 40% of shoppers are “show-rooming”
UPS and commSource say:
- 44% more likely shop retailer if they could buy online and pick up in store
- 62% want the ability to buy online and can return items to a store
- 44% of online shoppers abandon shopping carts due to the estimated delivery date
- 78% pick cheapest delivery, (1% Next Day, 5% 2-3 Day, 16% 3-5 Days)
- 8% of online shoppers are “speeders” , <=3 days for delivery, Most are millennials ,the key ‘social’ demographic
Contact me for more information or to help solve any logistics challenge that you may have @ 1.404.750.3200 orInfo@savannahsupplychain.com.
Savannah, Georgia 31410
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