Inventory / Merchandising / Supply Chain - Retail TouchPoints - Retail TouchPoints Fri, 23 Aug 2019 11:22:06 -0400 RTP en-gb BBQ Guys Optimizes Shipping Choices To Streamline Fulfillment Processes BBQ Guys Optimizes Shipping Choices To Streamline Fulfillment Processes

Maintaining clear communication is vital to retail success, but this can be a challenge for fast-growing companies with an expanding roster of suppliers, workers and carriers that need to stay in touch through a range of channels. In the case of BBQ Guys, this has meant continuously connecting hundreds of suppliers while maintaining 15% to 20% annual revenue growth for nearly 20 years.

“Whether it's from a customer standpoint, a vendor standpoint or a supplier standpoint, no matter who it is, we always want to be easy to do business with,” said Corey Tisdale, CEO of BBQ Guys in an interview with Retail TouchPoints. "We've grown to over 600 suppliers, and we always did business with these suppliers however they wanted in the past, so we had basically 600 different processes that were all variations of a similar theme. We got to the point where being able to effectively communicate in a timely fashion with all of our vendors and customers was really becoming a struggle because of how fast we're growing.”

Accurate communication is particularly important for a retailer like BBQ Guys, which regularly splits its shipments between parcel and freight. The problem is that many solution providers are geared towards only one or the other type of shipping. BBQ Guys rose to this challenge by implementing a system that connects vendors with a shipping company that is well-suited to handle each delivery, whether it’s as small as a spatula or as large as a grill.

"A lot of our stuff is big and goes freight, and for our suppliers to have to ask what the deal is — ‘Hey, every time you go to send a shipment, can you get quotes from five different freight companies and ship it with whoever's the best match for this particular shipment’ — that's a lot of work,” said Tisdale. “To even call and schedule all of the people to come pick up the stuff at the right time is a lot of administrative burden to put on a supplier, and we didn't want to do that.”

The retailer partnered with Logicbroker to optimize sourcing and relationships with vendors, and connected the solution provider’s platform with Convey, which automatically determines the optimal shipping company, generates the paperwork and schedules the freight pickup. The two technologies helped generate a significant increase in efficiency, which enabled BBQ Guys to process 22,554 shipments in May, 11% more than May 2018.

BBQ Guys receives the relevant information in a standardized format that helps the company cut down on its number of processes and quickly respond to problems like out-of-stocks or shipping delays. The streamlined system has simultaneously reduced the administrative burden, the number of clerical errors and the time it takes to respond to an issue.

The tools also help BBQ Guys improve delivery over time. The centralized nature of the data lets the company easily pull out both specific instances and aggregate information about fulfillment times, customer experiences and other relevant statistics, letting the company rectify any negative experiences before they result in a lost customer.

Customers also benefit from the system when everything is going well. They can now track their shipment across all modes of transportation and carriers used, regardless of how many individual shipments make up their total order.

"Every customer gets notified in the way that they want to be notified, at the frequency they want to be notified,” said Tisdale. “Nobody has to do anything extra to make that happen, because everything from the time that we start fulfillment to the time it gets delivered to the customers is automated."

]]> (Bryan Wassel) Inventory / Merchandising / Supply Chain Wed, 24 Jul 2019 08:53:15 -0400
How Retailers Can Compete With Amazon At Its Own Supply Chain Game

0aaaAndrea Morgan-Vandome CelectWhile few things remain constant in retail, the customer always comes first. And in today’s Amazon Prime world, customers demand faster, cheaper and more convenient fulfillment options than ever before. Retailers are scrambling to keep pace, offering everything from pre-selected delivery slots and buy online, pick up-in-store (BOPIS) to two-hour delivery windows in an effort to provide the seamless, channel-less experience customers expect.

Yet retailers are struggling to accurately determine what, when, where and how much customers will buy. To beat this real-time “last mile” supply chain challenge and successfully compete with Amazon, retailers must take a page from the retail giant’s own playbook and leverage their stores as one unified distribution center to achieve massive margin gains. 

The Evolution Of Fulfillment And The New Ship-From-Store Model

Historically, online order fulfillment has been accomplished through either large fulfillment centers or store-based fulfillment via stiff, rules-based order management systems, where inventory was either pulled from the store closest to the customer or a store with the lowest shipping costs.

While this approach works in theory, the reality is that the retailer often suffers as costs escalate. Either additional inventory is stockpiled or stores must manage resulting inventory dilemmas. For example, stores with high inventory turnover become under stocked and cannot cover walk-in demand, while stores with slower inventory turnover become overstocked and vulnerable to unplanned markdowns. Last year alone, U.S. non-grocery retailers lost $300 billion in revenues due to markdowns — which were primarily driven by inventory misjudgments. 

With the success of Amazon and the need for faster, more cost-effective order fulfillment, many traditional retailers have turned to “ship-from-store” methods using store inventory to fulfill online orders. The majority of these companies are adopting a combination approach leveraging distribution centers (DC) and stores. While this approach enables more flexible delivery capabilities and considers cost, it has also introduced two new challenges:

Inventory Uncertainty: With more ways for customers to buy, receive and return goods, demand prediction and inventory management can seem like voodoo science. Retailers struggle to understand if a particular store will have enough inventory to satisfy in-store demand first, let alone accurately pinpoint which store locations will have too much inventory of a particular item that won’t sell in-store and instead should be fulfilled for online orders.

In-Store Sales Cannibalization: By fulfilling online orders using in-store inventory, retailers run the risk of negatively impacting in-store sales. Without an accurate, real-time view of demand across channels, it is incredibly hard to predict if an item will sell well in a physical store vs. online — and when this could change or reverse.

Demystifying Demand With Artificial Intelligence And Machine Learning

Retailers need to clearly understand how to best use store inventory and take advantage of location to maintain the edge they need to compete in today’s retail environment. If done correctly, ship-from-store fulfillment not only addresses customer expectations, but also helps retailers avoid markdowns and lost sales, decrease fulfillment costs and increase full-price sales.

Retailers can gain a more accurate view of demand across stores and exceed customer expectations by harnessing the power of artificial intelligence (AI) and machine learning (ML).While 86% of retailers see the value in advanced analytics, retailers have long struggled to effectively use analytics. It is difficult to predict true demand based on sparse or incomplete data and lack of real-time context (such as available assortment and upsell and market trends) — especially at scale.

However, thanks to recent technology advancements in AI and ML, retailers now have ways to evaluate millions of data points at once to help quickly identify the overall opportunity cost of each potential fulfillment scenario. With this, retailers gain critical insight about where to ship from in order to best utilize the inventory — helping them maximize gross margins and sell-through.

In addition, technology advancements now also enable robust optimization capabilities that can help retailers solve a wide range of critical merchandise, planning, allocation and fulfillment challenges. With the ability to optimize across multiple (and often competing) objectives, retailers can better predict the best fulfillment strategy based on product availability, likely demand, capacity constraints, shipping costs, delivery timing and more. 

For each fulfillment decision that needs to be made, advanced optimization can account for the overall margin profitability and customer satisfaction by identifying the immediate payoff versus the long-term opportunity cost — instantly. Not only has effective fulfillment become a scientific game of advanced analytics, but it also must now play by the rules of the Amazon-driven era of urgency. 

Winning The Supply Chain Game

Inventory continues to be both retailers’ largest liability and greatest asset. In today’s volatile retail market, there is absolutely no room for guesswork or reliance on backwards looking data. By embracing the predictive analytics afforded by the AI/ML technology era, retailers can optimize inventory and modernize supply chains. In fact, omnichannel retailers can successfully meet consumer demand across ALL channels and stores — and beat Amazon at its own game. 


A seasoned retail tech leader, Andrea Morgan-Vandome’s experience across marketing, product, sales, customer relationships and market strategy has driven the success of both industry giants and innovative startups. As the CMO of Celect, she leads the development of strategic marketing efforts to expand the company’s product suite in the retail space. In her recent role as global vice president Cognitive Solutions at IBM Watson, she led the delivery of the first repeatable artificial intelligence and machine learning offerings and drove the product strategy, user experience and go-to-market approach for Watson solutions. Before joining IBM, Morgan-Vandome served as global vice president of cloud and global vice president of strategy and solution management at Oracle Retail, where she worked with retailers around the globe on merchandising, planning, inventory, supply chain, omnichannel and store challenges. Earlier in her career, she led strategic product and marketing initiatives at various startups including Retek, Connect3 Systems and StorePerform Technologies.

]]> (Andrea Morgan-Vandome, Celect) Executive ViewPoints Tue, 23 Jul 2019 09:10:28 -0400
Boutique La Vie en Rose Implements Unified Systems To Fuel International Growth Boutique La Vie en Rose Implements Unified Systems To Fuel International Growth

Earlier this year, executives at Boutique La Vie en Rose realized that its backend systems weren’t capable of supporting the retailer’s plans for growth. While the technology infrastructure for the Canadian lingerie, loungewear and swimwear retailer had been adequate for decades, healthy omnichannel growth required replacing legacy systems with more modern tools.

“We are moving away from an Excel-based environment that requires manual input to an enhanced solution that will allow our business to flourish,” said Éric Champagne, Chief Information Officer of Boutique La Vie en Rose in an interview with Retail TouchPoints. “I tell my team that this is like a pair of comfortable jeans, which is fine occasionally, but sometimes you need to go to a black-tie event.”

To “suit up,” the retailer deployed a unified system consisting of the Techni-Connection integrated solution with CGS BlueCherry PLM and the Cegid Retail Management & POS Solution. The combination is improving data flow and communication with vendors, as well as providing transparency into logistics and offering new tools for management.

The improved automation will help Boutique La Vie en Rose expand its international presence, which includes 275 locations in 17 countries and an e-Commerce site in the U.S. The efficiency gained by automating standard operations will be a key element for enabling this growth.

“Right now, any added new country means we have more manual requirements,” said Champagne. “In managing different countries, as well as distribution channels, we need a simplified process, as well as a better understanding and flow of data. For example, to be present in other countries we need an international solution that offers multi-language, multi-currency functionality and meets local fiscal requirements, such as taxes and GDPR.”

Moving away from manual processes also will help align the company’s everyday operations with its financial planning goals. The PLM tools will standardize design, development and vendor collaboration, while the unified system will make it easier for Boutique La Vie en Rose to upgrade other solutions in the future.

The company already has a five-year digital transformation program underway, which aims to offer shoppers a seamless user and customer experience across channels. One of the immediate goals is to align customers’ online profiles with their past purchases and interests, both online and in-store, improving personalization capabilities.

The new system also will put Boutique La Vie en Rose in a better position to take advantage of new technologies going forward. Both customer-facing technologies like AR and VR, and backend enablers such as AI and machine learning, could be further enhancements in the retailer’s future.

“While AI is a buzzword, there may be potential integration in the future,” said Champagne. “Whatever the latest new innovation the customer wants and needs from us, we’ll be able to integrate it. Tech is moving much faster than ever before and we want to be able to easily, quickly react. With upgraded systems, we will benefit from the changing tech landscape.”

]]> (Bryan Wassel) Inventory / Merchandising / Supply Chain Tue, 21 May 2019 08:22:12 -0400
TrueCommerce Acquires Supply Chain Management Platform Provider ecUtopia TrueCommerce Acquires Supply Chain Management Platform Provider ecUtopia

TrueCommerce has acquired fellow cloud-based supply chain collaboration and visibility platform ecUtopia for an undisclosed sum. With the acquisition, TrueCommerce gains a strategic technology service that strengthens its commerce network in several market segments, specifically home furnishings and apparel.

The TrueCommerce solutions are designed to help retailers connect their business across the supply chain under one global network, integrating processes including Electronic Data Interchange (EDI), inventory management and fulfillment, as well as e-Commerce hubs such as digital storefronts and marketplaces.

There are no immediate plans to rename ecUtopia, but the company will be rebranded under the TrueCommerce banner.

TrueCommerce, based in Pittsburgh, plans to integrate the ecUtopia operations into its own “where it makes sense,” according to a company Q&A posted on its web site. The ecUtopia San Diego office will operate as another Center of Excellence for TrueCommerce customers.

The companies will determine when and how they can extend TrueCommerce’s catalog of products and technologies to ecUtopia customers and offer additional services designed to help improve supply chain operations. In addition, the companies will immediately evaluate incorporating ecUtopia's platform and technology into the TrueCommerce Foundry platform.

]]> (Glenn Taylor) Mergers & Acquisitions Tue, 14 May 2019 12:59:22 -0400
How Retail Inventory Efficiency And Accuracy Impacts The Customer Experience

0aaaCarla Anderson OracleRetailAs omnichannel retailing requires greater and greater precision, the stakes surrounding inventory accuracy — or the lack thereof — are increasing dramatically.

According to a report from the International Council of Shopping Centers, an estimated 151 million people visited a mall or shopping center over 2018’s Black Friday weekend. The vast bulk of spending volume for the weekend — 88% — went to omnichannel retailers, i.e. brands with web sites the consumers at least had the opportunity to shop before entering the store.

So far, no surprises. We were expecting a big shopping weekend, most retailers are at least trying to be omnichannel these days, and we know consumers increasingly do product research on the web site before making their instore purchases. Slightly unexpected, however, was this: 27% of those holiday shoppers were in the store to pick up a purchase they’d already made online. Of those click and collect or buy online pick up in-store (BOPIS) customers, almost two thirds — 64% — made one or more additional purchases while they were in the store.

While these numbers are possibly skewed a little by consumers’ urge to nail down a Black Friday special, it seems clear that click and collect represents a genuine and growing sales and customer loyalty building opportunity. Well, it does only if you’re good at it. Here are two questions retailers should ask themselves:

  1. When the customer comes in to collect the order in your store, is the item there and ready for pickup?
  2. Do you have a simple, customer-friendly process? In other words, can the BOPIS customer make their pickup without having to stand in a checkout line and is it easy for your customer to find the pickup area?

When It Goes Wrong

Here’s an example of what can happen when the answer to either of those questions is no. I recently spoke with a friend who’s a long time customer of a large, well-known chain with a very good reputation for customer service. She called the store nearest to her recently and asked for an item she needed for an upcoming trip; she was told it was in stock, gave them her credit card number, and arranged to pick it up on her way to the airport. It will be, she was told, at the special services desk.

When she arrived at the special services desk, not only was the item not there, they had no record of the transaction. They sent the customer upstairs to the department the item would have come from, where there was also no record of the transaction. So she was sent to yet a third place, with the same result. After 20 minutes of this, she left the store empty-handed but with a lot of frustration, and went to the airport. Eventually somebody at the store found her purchase and sent it to her, along with an apology and a store credit. She’s shopped with this company for years, and is still a semi-loyal customer.

That’s the good news. The bad news is this: every day, on her way to work, she passes within a hundred yards of the mall entrance for that store. “I’ll still use them for particular things, but to click on something and pop in and get it? I’m like, no way. I don’t have 20 minutes to spend chasing around.” In other words, she’s not giving them another chance when it comes to click and collect.

The Empowered Associate

Multiply that one instance by the number of people now trying click and collect — nearly 36 million of them on Black Friday weekend, according to ICSC’s numbers — and you have the potential for a lot of lost opportunity. The question is, how do you prevent that from happening?

I’m tempted to say technology — my employer, after all, is a company that develops technological solutions for the retail industry — but that’s only part of the answer. The retailer in the story above, for example, is by no means averse to technology; they were one of the first to put a tablet in the hands of their associates. What may have happened is that they thought, okay, we’ve done that; check the box and move on.

This is not a new story in retail. Retailers, and not for groundless reasons, tend to have a real fear of failure. Trying something new, at least in a pilot program, is common; rolling out to their associates usually follows the pilot; however, ongoing investment in it, making changes as the business and the customers change, is less common. Giving associates (or customer service representatives) the autonomy paired with the right tools and current, necessary information to handle a customer order from end to end is also fairly uncommon. I have seen a few examples of brute force making click and collect ‘work,’ but that is not a long term, scalable solution.

The Loyalty System

The point here is that the associate, the autonomy (“I can fix this for you, ma’am”), and the data the associate is working from are not freestanding elements; they’re part of a larger system. And the purpose of the system isn’t just to save a sale on a Black Friday special. It’s to cement the customer relationship. It’s to build loyalty with that customer so you are first in mind for their shopping decisions. It’s to enable your employees to do the best they can.

And the purpose of a loyalty system is customer retention. According to figures from conversion rate specialists Invesp, it costs five times as much to attract a new customer as to keep an existing one — even with the occasional appeasement. Compared to new customers, existing customers are 50% more likely to try new products, and to spend 31% more money.

If you’re a retailer and you’re offering click and collect, the in-store pickup is a make-it-or-break-it moment for customer loyalty. If it’s not easy, if the first associate the customer encounters can’t find the item, or worst of all if the item isn’t really there in the store, you’ve lost a customer.

Where Is It?

The core of this system we’re talking about — the thing you have to have to make it work well — is inventory accuracy. Which is a lot rarer than it needs to be. According to the Auburn University RFID Lab, the average level of inventory accuracy for U.S. retailers is 65%, meaning that more than a third of the time, the average retailer can’t tell where a particular item is, or whether they even have it in stock.

If you’re one of those retailers — maybe even one of the ones below 65% — this isn’t a criticism, or necessarily a problem. It’s an opportunity. Let’s just say a 3% improvement in inventory accuracy delivers a 1% overall sales lift. If a store managed to get from 65% accuracy to 93% — which, with the right systems in place, is totally doable — it would net a 9% increase in gross sales, with no other investment required.

It would also vastly improve your ability to execute an omnichannel strategy. If you don’t have 90%+ inventory accuracy, and you don’t have your merchandising and inventory data tied together and easily accessible to everyone who needs the information, you’re handicapping yourself in today’s — and tomorrow’s — retail market.

Single View Of Inventory

For example, retailers such as John Lewis — the largest omnichannel retailer in the UK — realized it was time to embark on a journey to a single view of inventory in order to meet the growing expectations of customers for convenience, choice and experience. They were finding multiple versions of stock information across their various systems and decided to make a change. “John Lewis wanted to implement a full end-to-end solution that fully integrated with the supplier. The new process would give us the information around a product and ability to launch a product online. Fundamentally, the benefits we’re driving will increase the speed to market with a seamless process working with new and existing systems,” said Susan Young, Head of Merchandising Strategy at John Lewis Partnership.

If retailers want to ensure their customers keep coming back, having a customer-friendly BOPIS process seems to be a good start. And to start that BOPIS process off on the right track, they need to put in place the processes and the complementary technology for associates to truly handle a customer order from end to end.

Carla Anderson is Senior Director: Merchandising Strategy at Oracle Retail.

]]> (Carla Anderson, Oracle Retail) Executive ViewPoints Wed, 01 May 2019 08:00:00 -0400
Why The Retail Supply Chain Demands Digital Transformation

0aaaGraham Parker GravitySupplyChainDigital transformation is at the top of the agenda for many retailers; however, this is only the beginning of the retail industry’s efforts to embrace digital change. According to a 2018 report by SAP, only 22% of retailers investing in digital transformation were within the planning stage, and 55% were still running pilot schemes. Evidently, there was still a long way to go, as only 3% of retail businesses had completed digital transformation projects.

Consumer demand has shifted, with fast-changing preferences seeing consumers demanding the products they want, when they want and where they want them. Today’s consumer lives in an ‘always-on’ world, driven by connected technologies centered around convenience. The retail sector has been slow to keep pace with this changing consumer demand, and unless it can accelerate the pace of digital transformation, the gulf between consumer demand and satisfaction will only grow wider, placing customer loyalty at risk.

If retailers are to protect customer loyalty, and be able to both sustain and also increase sales, they must work quickly to reduce lead times and business cycles to get the products that consumers want, where they want them and when they want them.

The Business Case For Digital Transformation Of The Supply Chain

Attempting to digitally transform without a robust infrastructure in place is a virtually impossible task. Recently, a major U.S. retailer faced escalating complaints from customers who could not find the items they wanted because they were frequently out of stock; this was due to the retailer’s supply chain not being reliable enough to keep pace with what customers wanted.

In response, the management team decided to invest in the digital transformation of its supply chain, to shorten replenishment times, optimize deliveries, and ultimately be able to match supply with demand. Shortly after doing so, they were able to reduce retail cycle times by 20%, leading to increased sales. In future, they anticipate even better results, and the ability to achieve a 60% total reduction in retail cycle time.

However, this is just one example of how digital transformation, particularly of the supply chain, can help retailers meet the challenging demands of today’s consumer, generating business growth and success. The findings of significant research institutes also support this fact. Bain & Company found that retailers that integrate digital technologies into their supply chain rapidly improve service levels while cutting costs by up to 30%. McKinsey discovered that companies that strongly digitize their supply chain could expect to boost their annual growth of earnings before interest and taxes by 3.2% — the most substantial increase from digitizing any business area — and the annual revenue growth by 2.3%.

What Digital Transformation Demands

The business case for retailers to digitally transform their supply chain is compelling. The reason digital transformation can generate such impressive business results is that it provides retailers with the following game-changing capabilities:

  • Real time visibility across the supply network, allowing retailers to view the live status of products no matter where they are along the critical path, e.g. in production, in transit or in inventory; allowing data-driven decision making with certainty and ensuring the timely delivery of products.
  • Automation of time-consuming manual data entry, e.g. keying in data on bookings, purchase orders or sailing schedules. Automated operations streamline the workflow of supply chain managers, saving them hours of time and allowing them to focus on more value-added tasks, such as negotiating better vendor prices or implementing growth strategies.
  • Enhanced collaboration with all relevant stakeholders sees logistics providers, factories, global teams and departments all on one platform, enabling information to be shared quickly and easily, rather than being spread out across multiple sources such as spreadsheets or emails.
  • AI and ML capabilities enable businesses to predict what customers want before they even want them, and make supply chain optimizations to synchronize supply with predicted demand, with little or no need for human intervention. AI and ML will power ‘cognitive’ supply chains, the final phase of digital transformation. Reaching cognitive functionality will take time and requires digitization as the first step (e.g. the points mentioned above such as automating manual processes).

These features increase efficiency and speed to market, and allow retail companies to satisfy their consumers with timely deliveries.

Culture Must Change Too

A caveat to the discussion so far is that the digital transformation of the supply chain by itself is not enough to improve supply chain performance and take it to the next level. Retail companies must also create a workplace culture that encourages employees across the supply chain and buying floor to collaborate more, share data and not operate in silos, in order to take full advantage of the benefits that a digitized supply chain will provide. Both sets of employees exist to deliver the product to the consumer, and should be aligned and collaborating in tandem.

An Opportunity Not To Be Missed

According to the IDC, there is a gap within the retail sector between retailers that are starting to embark on the journey of digital transformation with a defined strategy, and others that are lagging with no clear goals on how to incorporate digital technology. The IDC warns that retail companies on the lower end of the spectrum are putting their competitiveness at risk; which is why it is critical that you don't get left behind.

A Staged Approach

Trying to digitally transform an entire supply chain in one phase can be a daunting and overwhelming prospect. The best way to start is by identifying and fixing the immediate weaknesses in the supply chain (e.g. time to market), with a long term goal to evolve in entirety. Once people in the organization start to see the benefits from digitally transforming those parts of the supply chain that need it the most, the process of digitizing the rest of the supply chain to achieve even more significant benefits will organically take place. Evolution comes from robust and proactive decision making, vision and openness to change, essentially trusting both the data and the source of the data. Real-time visibility begins to install the trust element, so the rest will follow naturally.

Gravity Supply Chain Solutions CEO Graham Parker has spent over three decades working in the supply chain industry and has seen first-hand how the traditional linear supply chain model has grown obsolete. Heading into the company’s fifth year, Parker is responsible for executing on the vision, leading the Board and the investor base. There are high expectations for the platform, and how Gravity Supply Chain can take its customers on the autonomous journey through digital supply chain management and on to cognitive supply chain management. Of equal importance is ensuring that the company provides a healthy, stable structure for all employees, so they realize just how integral each person is to help the company grow and achieve its targets and objectives.

]]> (Graham Parker, Gravity Supply Chain Solutions) Executive ViewPoints Thu, 18 Apr 2019 08:00:36 -0400
Establishing Zero Distance Supply Chains – A Survival Necessity For CPG Establishing Zero Distance Supply Chains – A Survival Necessity For CPG

(Left: Takshay Aggarwal, Middle: Manish Varshney, Right: Kishor Gummaraju)

The key mission of every CPG company is to deliver its brand promise. The Baby Boomer generation drove the growth of packaged goods and made companies like Kellogg’s, P&G and Kraft Heinz household names and darlings of Wall Street.

While the growth in the last three decades has been good, this engine has been slowing and has come to a grinding halt in the last five years, in the range of 0.6% to 1.0% growth. In addition, stocks of major CPG companies hit 52-week lows in a roaring stock market.

What ails these companies? Why is growth a challenge? Is there a way out?

One needs to look closely at what is happening.

Changing Consumer Habits And Preferences

Consumers today expect to be able to buy almost anything, anywhere, at any time and at low prices. Gen Z and Millennials are looking at niche, healthy, organic, local, sustainable and authentic brands. The emergence of direct-to-consumer business models has further resulted in companies like Dollar Shave Club and Amazon being a lot closer to the consumer and their preferences than traditional CPG companies.

Eroding High Entry Barriers To Market

For CPG companies, it takes hundreds of millions of dollars to build a brand, 18-36 months to bring new products to market, and equal time in parallel to negotiate with retailers to get products on shelves. This served as a bulwark against any small companies; the cost of business was too high.

Things changed when Google, Amazon, and Quirky entered the picture. Quirky just needs your idea to design and manufacture on your behalf. GoDaddy just needs your credit card to start up your web site. Search engine optimization (SEO) will make you stand out, Amazon will provide you virtual shelf space to sell your products and drop ship orders as they come in. The barriers to starting up a business have eroded. This has resulted in the emergence of localized niche players that target micro segments and chip away at revenue growth.

Outdated Supply Chain Capabilities

CPG supply chains were built as linear value chains. This linearity brings with it the inherent inefficiency of supply chain latency, impacting the ability of the supply chain to react to real-time changes in demand. Coupled with this, the rise of direct-to-consumer business models has resulted in a need to orchestrate their supply chains across pallets, eaches, drop ship and last mile delivery. This is something that the CPG value chains are not geared for.

Establishing The Zero Distance Supply Chain

All this has resulted in an existential crisis for many CPG companies. It is imperative that they figure out a way to deliver on the needs of the consumer — in her preferred channel, at the right time, and at the right price. This requires a supply chain that is able to sense and respond to consumer needs in the most efficient manner. This is what we call a Zero Distance Supply Chain — a supply chain that is at zero distance to the consumer.

CPG companies will thus need to figure out an effective way to operate in this new omnichannel context. Their supply chains will need to orchestrate brand promise across multiple business models ranging from direct-to-consumer, drop ship for Amazon and to traditional retailers. They will need to evolve into highly efficient, loosely held networks across different players in the consumer ecosystem.

Newer capabilities like artificial intelligence, machine learning and IoT combined with the improvement in computing capacity have now made it possible to build solutions that are able to intelligently orchestrate the supply chain in near real time. Supply chains can effectively respond to demand signals, weather events and inventory issues in a timely manner without excessive human interaction.

Making It Happen

However, making this happen is no easy task. It involves building new technology capabilities while ensuring that the existing business operations are not impacted. It also involves a significant rethinking of business processes and work practices. The keys to success are best understood by the learnings from partnering with a very large CPG company looking at re-architecting its supply chain planning function.

Delivery in agile sprints: Solving all the supply chain planning functions at once is like boiling the ocean. Hence it is critical to assess all the functions but work on the solution in agile sprints, delivering value at quick and regular intervals.

Rethink the processes and roles: It is not sufficient to put in AI, machine learning and automation. It is also very important to rethink how the supply chain functions would operate in the new context. The new capabilities create bandwidth for planners to be able to perform other strategic and value-added tasks. This also results in changes to job profiles and KPIs, which need to be planned for.

Drive the cultural change: Adoption of these new capabilities requires a culture willing to learn and experiment. CPG companies have traditionally reveled in picture-perfect planning with action items running in hundreds of lines, with a high degree of finality to everything. As a senior CPG executive put it, “Detailed planning and predictable outcomes have made us extremely successful but are the biggest hindrances to adopting an agile culture.”

Results Achieved And New Capabilities

The results we’ve achieved with this CPG firm have resulted in the following capabilities:

  • Real-time planning of supply chain in seconds versus days with current planning applications
  • Autopilot supply planning capability — planners intervene only in case of exceptions not handled by machine, resulting in a significant reduction in planning effort
  • A self-learning system that can anticipate issues and learn from new data

The benefits we have been able to realize have also been substantial:

  • An improvement in service levels by 0.1%
  • A greater than 50% improvement in productivity
  • A one-day reduction in on-hand inventory


Establishing a Zero Distance Supply Chain, which is able to sense and respond in an efficient manner in near real time, is key in the new omnichannel environment.

Establishing this is not a simple task. However, taking a comprehensive yet pragmatic approach of tackling all aspects of technology, process, people and culture can help realize value while establishing the foundation for the future.

Takshay Aggarwal is Associate Partner at Infosys Consulting with extensive experience in supply chain, operations and business development . He helps companies across industries leverage disruptive technologies like AI, ML  and digital capabilities to evolve their operating models and transform their businesses to effectively serve their customers while scaling operations efficiently.

Manish Varshney is a Senior Principal in Infosys consulting in Retail, CPG practice with 18+ years of experience across Fortune 500 companies. He is leading the Automation Practice in Infosys Consulting focusing on CPG processes specifically in Digital Supply Chain and Master Data.

Kishor Gummaraju is a managing partner at Infosys Consulting with extensive experience in consulting, innovation, business development and running business operations. He has been responsible for delivering large business transformation programs and significant innovations in the manufacturing, retail and CPG industry. His current area of focus is driving value leveraging AI and intelligent automation – and scaling its capabilities across key U.S. clients.

]]> (Takshay Aggarwal, Manish Varshney and Kishor Gummaraju, Infosys) Executive ViewPoints Tue, 16 Apr 2019 08:07:12 -0400
Kroger Says: Houston, We Have Autonomous Delivery Kroger Says: Houston, We Have Autonomous Delivery

Kroger is expanding its self-driving delivery pilot to two Houston stores in spring 2019. Kroger and robotics company Nuro have operated a self-driving grocery delivery service in Scottsdale, Ariz. for a Fry Food Stores location since August 2018, serving a single zip code with an autonomous vehicle fleet and completing thousands of deliveries, according to a company statement.

Customers in four Houston ZIP codes served by the new program will be able to place orders for same-day or next-day delivery via or the Kroger mobile app, based on time slot availability. The service, to be available seven days a week, will carry a $5.95 flat fee, with no minimum order requirement.

In Scottsdale, the company used autonomous Toyota Priuses, which also will be used for the initial deliveries in Houston. Later this year, however, the retailer will switch to the Nuro R1 custom unmanned vehicle.With no driver or passengers, the R1 travels on public roads and only transports goods. The vehicle has been in development since 2016.

For its 2018 fiscal year, the supermarket giant saw digital sales jump 58%, and it expanded online grocery delivery and/or pickup service to 91% of households in its major markets. With this much penetration in grocery delivery and pickup, Kroger has plenty of areas where it can test the driverless technology next.

“Our Arizona pilot program confirmed the flexibility and benefits provided by autonomous vehicles and how much customers are open to more innovative solutions,” said Yael Cosset, Chief Digital Officer at Kroger in a statement. “It's always been our shared vision to scale this initiative to new markets, using world-changing technology to enable a new type of delivery service for our customers. We operate 102 stores in Houston — an energetic market that embraces digital and technology advancement. The launch is one more way we are committed to sustainably providing our customers with anything, anytime, and anywhere, the way they want it.”

Numerous major players have started autonomous delivery pilots designed for same-day or next-day delivery, including Walmart, Amazon and most recently FedEx, which is collaborating with Walmart, AutoZone, Lowe’s, Target and Walgreens in ways that the companies have not yet specified.

]]> (Glenn Taylor) Inventory / Merchandising / Supply Chain Fri, 15 Mar 2019 12:05:27 -0400
Happy Returns Debuts Self-Service Return Kiosks

1happyreturnskioskHappy Returns, a provider of return and logistics solutions for retailers, has launched a new self-service return kiosk designed to provide consumers with a simplified way to return online purchases in stores.

The kiosks — which can be branded for the retailer — are equipped with an integrated tablet that helps consumers securely look up orders and select items to return or exchange. Shoppers are then prompted to put their returns through a tamper-proof door. According to Happy Returns, the process takes less than 60 seconds per item, and refunds and exchanges are initiated in real time.

Once the return is finalized, retailers can immediately add items back onto store shelves or they can utilize Happy Returns’ reverse logistics services, which are positioned to help manage the inspection, processing and disposition of the items to local Return Hubs.

“Our experience working at HauteLook/Nordstrom Rack and working with dozens of other retailers at Happy Returns informed our approach to managing the growing volume of online returns in physical stores,” said David Sobie, Co-Founder and CEO of Happy Returns in a statement. “The new self-service return kiosk incorporates all we have learned about delivering a return experience that’s delightful for customers and more efficient and cost-effective for retailers.”

]]> (Klaudia Tirico) News Briefs Wed, 06 Mar 2019 09:21:46 -0500
Rituals Cosmetics Deploys Supply Chain Software To Enhance Product Visibility Rituals Cosmetics Deploys Supply Chain Software To Enhance Product Visibility

Rituals Cosmetics, a European home and body cosmetics retailer with 730 stores around the world, has selected Logility Voyager Solutions to establish a robust sales and operations planning (S&OP) process, improve service levels and enhance visibility across its omnichannel operations.

The retailer also is leveraging the AI-based software platform to:

  • Increase its forecast accuracy;
  • Minimize the potential for lost sales; and
  • Support the speed and frequency of new product innovations.

Previously, Rituals Cosmetics conducted its monthly forecasting with a combination of disconnected tools and spreadsheets. This potentially error-prone process limited the cross-functional collaboration and decision-making needed to stay ahead of rapidly changing consumer preferences.

“Rituals Cosmetics’ ability to deliver the highest quality products and exceptional service our clientele expects requires accurate visibility across our supply chain, from sourcing and manufacturing through to customer delivery,” said Mark Hoppenbrouwers, Director of Supply Chain at Rituals Cosmetics in a statement. “It is important to us that our customers have many opportunities to interact with us, for example via our own shops and web site as well as traditional luxury department stores, perfumeries, pure players, airports, spas, hotels and more. Logility will help us omnichannel-proof our retail planning and supply chain processes for each sales channel and product category.”

]]> (Glenn Taylor) News Briefs Thu, 31 Jan 2019 17:44:52 -0500