The UK Retail market is unique in the global market, both in terms of its innovation and focus on customer value and of its preponderant influence in the UK economy. Retailers, especially the leading multiples, represent a lucrative business opportunity for suppliers. The same retailers can also be challenging and demanding customers on behalf of their “never satisfied” customers you and me!
Jez Tongue, Partner with @logistics Reply, a leading provider of both on-premise and on-demand supply chain execution solutions, examines how supply chain solutions can help manufacturers and suppliers to retail sustain customer service levels whilst controlling or reducing costs.
Key trends and challenges in the logistics, warehousing and transportation industry today.
Today’s retail market poses an extremely complex and challenging environment for logistics and distribution. Customers – both the consumer and retailer – whether online or in-store want quality, value-for-money and optimum service delivery. Neither client group is either prepared (or able) to accept mis-picked or poorly substituted orders. It is therefore more vital than ever for supply chain businesses to be increasingly efficient and agile in order to assert their competitive advantage.
Perishable stock items need to be rotated. Range extension items need to be included into the product and service offering in a seamless yet cost-effective manner. Seasonal items factored into put-away processes, and now, with Next setting the precedent for next day order guarantees, highly demanding picking and distribution schedules overseen.
The key issue is cost reduction and return on investment. Will automated solutions make warehousing and distribution more efficient, both in terms of production and minimising operational costs?
Creating and unlocking value to drive innovation are also increasingly at the forefront of supply chain professionals’ thoughts. Essentially, logistics professionals are looking to “do more with less” to be able to sense demand signals from customers and respond rapidly.
Sustainable, low risk solutions which assure the protection of a business’s investment are increasingly appealing to logistics professionals, where “operating expense” has become the phrase of the moment.
How to support retail supply chain cost control.
Using real time warehouse execution data to drive production departments to produce what is actually required by the customer rather than what is on the plan is vital in reducing costs by helping to eliminate scrappage and costly special transportations.
• Inbound checking: partial or even 100% quality or sample checking, with percentage cases or items to be checked set by the supplier. Trusted suppliers have a lower percentage than newer, seemingly less reliable, suppliers – which drives supplier KPI’s
• Cycle-counting/stock checking; perpetual inventory activities built into picking operations (RF or voice), which confirm remaining quantity or confirm empty after a picking task, can drive savings. This needs to be balanced against overall picking productivity. Also, creating pallet loads in line with the retailer’s booking-in processes, so all like items are kept together rather than spread across several pallets will eliminate shortage reporting and therefore costly claims or re-work.
• Replenishment of pick faces: based on a % threshold of inventory remaining in the picking location, with an automatic priority increase of the replenishment task while it remains unfulfilled. This helps prevent stock outs and the picker having to skip or miss picks, which is especially effective where palletisation or pallet build is important (e.g. with crushable items, picking heavy-to-light) to avoid damages and hold-ups in unloading.
• Picking: hands free picking with voice technology can deliver significant productivity gains (over RF-based picking) and add data integrity and accuracy benefits over paper-based “pick and tick”.
• Compliance: a key challenge (and business cost) to doing business with the UK’s grocery retailers is complying with their individual labelling and ASN requirements. A realtime, flexible, web-based solution with sophisticated yet easy to deploy integration capabilities will automate much of the labelling and ASN work, removing the requirement for manual intervention and keying of data into retailer supplier portals.
How much technology is playing a part in a manufacturer’s or supplier’s depot operations.
Flexible software solutions which facilitate judicious use of automation or semi-automation (conveyors, fixed bar-code scanners) are ideal for supporting sustainable growth in line with the warehouses’ operational performance and needs. This also ensures minimal revenue and resource interruption as well as avoidance of any ‘service level dip’. Adaptable solutions also allow for rapid support of process changes (e.g. from static to dynamic location management) and can easily accommodate new customer requirements (e.g. configurable Value-Added Services).
Picking accuracy and efficiency can be improved with the introduction of RF or voice picking applications that deliver fulfilment instructions and best picking routes directly from the WMS to the picker. Automated picking also enables real-time stock tracking and logging of damaged goods. This introduces the option of just-in time stock ordering and item rotation to reduce obsolete stock and ensure the longest shelf-lives are always delivered to retailers, and in turn to their customers
Hosted, SaaS platforms also have the potential to enable different touch points along the supply chain to work collaboratively and proactively. If utilised it can allow multiple businesses – suppliers, sub-contractors, co-packers, manufacturers, wholesalers, retailers – to create and exchange actionable information in real time in all manner of data – demand data, forecast data, actual sales data, inventory data, re-order thresholds, campaigning or promotional data. The only limitation on this data sharing is (i) the capability of using this data to drive value and (ii) that most basic of human values – trust.
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