AMAZON AS A SUPPLY CHAIN SERVICE

Amazon performs in-house logistics--freight forwarding, planes, trucks, more. Define as a single-source, integrated 3PSCM (3rd Party Supply Chain Management) or SCMaaS (Supply Chain Management as a Service); the track record & weaponized potential it brings to the market. 

THE AGILE SUPPLY CHAIN

Often the agile Supply Chain term is meant to ignore supply chains designed for one role and then are asked to do something that it was not built to do. Confirming that adage--anything is possible when you are not the one doing the job.  Agility must be built into the design.

INVENTORY IN STORES ISSUE FOR E-COMMERCE FROM STORES

One need with using stores for e-commerce is keeping a nationwide network stocked for Perfect Orders. Is the inventory buildup from tariffs & the trade war masking issues on how retailers will replenish, position & restock inventory across the total Supply Chain?

E-COMMERCE AND IN-STORE FULFILLMENT —A Supply Chain Management Perspective—

In-store fulfillment for e-commerce has gotten stories done about it Details as to what is done and how are sketchy. They are written about retailers and from the retailer point of view. They are not written about from the supply chain management perspective. What is missing too is the cost-to-serve and order-delivery performance metric.

Some discussion points and to create comments for supply chain management side:

• Retailers may be assuming store employees as no-cost workers to do this. They are already there. Otherwise, this seems to be an expensive order picking approach. There is no technology used for picking and moving products. Plus, factor in the poor store layout and the picking waste of employee add time and cost.
• Online is about the customer expectation for order-delivery velocity. That is the sum of order picking, preparation, and shipping delivery. And, stores are close to customers? So, how does this method satisfy that customer centric metric? How does it compare with shipping from warehouses? Better yet, how many retailers know their performance against this customer centric KPI? Given where dominate e-commerce growth is, this is a valid question.
• Store fulfillment is also to achieve cheaper delivery? Much parcel shipping is essentially flat rate. If employees make deliveries, how are they compensated with this Grubhub- like retail service and how does that compare to parcel delivery pricing?
• How does the supply chain handle the velocity at and to all the stores? This can be part of an extensive end-to-end network. This means total velocity, not just downstream. Supply chains may have limited velocity because of the pressure to keep transport costs down—which is often at the sacrifice of speed of inventory movement. Add to this the unreliability of ocean carrier service.
• How are stores restocked to keep the order performance going? This is really about the end-to-end movement of inventory. Out-of-stocks are a no-no for customer orders. Fulfillment success depends on the upstream supply chain, where supply begins. This issue may be masked with building inventories to avoid higher tariffs with trade wars.
• What is the total inventory and working capital impact of using stores for this? Additional stocking locations mean additional safety stock. Are transport costs being traded for higher spending for inventory? Is there the potential for being inventory rich?

It would be good to understand the analyses used by retailers as to cost and order performance for stores versus warehouses. How does it compare to the maximum two-day order delivery? What about an updated warehouse network built around omnichannel, not stores, with strong inventory positioning?

Also, the real issue is the total supply chain, not just one part, fulfillment. How does forcing this at the end of the supply chain affect the total chain. What changes were required upstream? Or are there hidden problems if this is to be more than a Christmas time service?

Design the new supply chain's warehouse/fulfillment recognizing the different service requirements of the channels. The solution may be a combination of approaches. One way may not answer all needs, both cost and service. That may require data analytics, such as regression analysis, to understand order size, number of SKUs per order, which products are likely to be ordered together, and other questions.

With that, construct the network for what is the best way to meet customer demands—warehouses—how many, located where, size; or warehouses of different sizes depending on order volume; or a mix of warehouses and stores. Segment based on common supply chain or other significant issues. The monolithic purpose, one-size-fits-all supply chain is counterproductive to creating velocity.

https://www.ltdmgmt.com/e-commerce-and-in-store-fulfillment.php

SUPPLY CHAIN MANAGEMENT AS STRATEGY EXECUTION DRIVER

Hidden behind many retailers & CPG FMCG manufacturers struggles with e-commerce omnichannel is the lack of strategy with Supply Chain Management as the execution driver. Instead there have been reactionary band aid programs.

SUPPLY CHAIN PERFORMANCE AND LOGISTICS COSTS

Retailers Manufacturers Suppliers Grocers  There is no relationship between Supply Chain performance & logistics costs. Those that thought there was also happen to be laggards to what Amazon has done and is doing to e-commerce omnichannel.   CPG FMCG

OMNICHANNEL SUPPLY CHAIN ENDGAME

Retailers CPG FMCG Manufacturers Suppliers Grocers Are you finally ready to transform your e-commerce omnichannel & have it driven by SCM? Or don't you have an Endgame?

INVENTORY RICH

Is it only in accounting that being Inventory Rich is an asset? Working capital tied up. The yield maximization? End to end Supply Chain velocity creates a dynamic with inventory. Lean says its waste. Yet over focus on freight & warehouse cost. Excess   retailer manufacturer

AMAZON ONE-DAY SERVICE

Amazon's 1-day order delivery reconceptualizes selling, e-commerce, Customer Focus, Supply Chain Management, and logistics. Now what for retailers, CPG FMCG manufacturers, 3PLs, logistics providers?

OMNICHANNEL SUPPLY CHAIN ESSENTIALS

Retailers Manufacturers Suppliers Grocers  The new end-to-end, omnichannel supply chain should include these essentials:

•Integrated Structure—process, technology, organization

*Velocity

•Time compression

•Focus on both upstream and downstream

•Network aligned to channels

AMAZON--LOGISTICS COMPANY OR SUPPLY CHAIN COMPANY

Those saying Amazon is a logistics company, LTD says it is a Supply Chain company that weaponized SCM to execute its e-commerce Strategy. BigA is taking control of logistics, bringing in-house/Reverse Outsourcing for velocity. Threat to providers is not seeing this & changing.

TIME COMPRESSION AND SUPPLY CHAIN VELOCITY

Retailers. Manufacturers. Grocers. Suppliers. Supply Chain velocity must include Time Compression.  Excess time both delays inventory movement and creates the need for additional inventory as a buffer--and the extra working capital. And contributes to being Inventory Rich.

AMAZON AND LOGISTICS MYOPIA

How much of Amazon's potential to move into being a logistics service reflects myopic view by many providers on their own position & role? Logistics vs Supply Chain Management. What will these firms do to understand both the now & future & to build & execute a sound strategy?

LOGISTICS SECTOR IMMUNE FROM AMAZON

Logistics providers, which niche does not think it could be challenged by Amazon? Why? Look at what they are doing now. It is speeding up their end-to-end supply chain by connecting & integrating various transport, forwarding, & logistics parts. It is about the Supply Chain.

DIGITAL SUPPLY CHAIN

Manufacturers. Retailers. Grocers. Suppliers. Blend digital technology with its cousin, blockchain, to improve end-to-end Supply Chain velocity & visibility that also reduces performance risk. As a process enabler, it improves SCM process and reduces its cost.

GROCERY SUPPLY CHAINS

Grocers have 2 Supply Chains that restock stores. One has inventory they own & warehouse. The other is supplier controlled. Both must be redesigned for the e-commerce omnichannel reality. Both. For success. Out of stock & substitution are failures to customers.

KROGER PLAYING CATCH UP

Kroger. Stepping up e-commerce omnichannel capabilities. Conservative culture of grocery industry. Small online share yet is growing while stores sales are flat. Investing in warehouses, technology, meal kits. Catch up. No mention of updating its dual supply chain into stores.

https://www.wsj.com/articles/americas-biggest-supermarket-company-struggles-with-online-grocery-upheaval-11555877123?shareToken=st27539adc3d10445a8864e7fee98ada38

SUPPLY CHAIN RISK

Trade wars, Retail Apocalypse, disruption, chaos, and much more have increased Supply Chain Risk. It is time for manufacturers & retailers to identify, assess, measure, and mitigate risk in the end-to-end supply chain. Risk aversion, doing nothing, increases risk.

SUPPLY CHAIN ENDGAME

Manufacturers and Retailers. Who wants to transform their Supply Chain?  Or don't you have an Endgame?

LOGISTICS OUTSOURCING VS SUPPLY CHAIN OUTSOURCING

Manufacturers. Retailers. Investors. 3PLs. SCM is now defined by end-to-end velocity. This impacts traditional logistics outsourcing. Requires new players for new needs. Emphasis shift to Supply Chain Management from logistics.

PIER 1 IMPORTS RESTRUCTURING

Pier 1 Imports. Restructuring;, closing more stores. Another retailer with a lack of a robust e-commerce omnichannel program. Ignoring new reality of how to serve customers at different touch points. Another lack of new Supply Chain to drive the program.

https://www.wsj.com/articles/pier-1-imports-fills-cfo-seat-with-restructuring-expert-11555546570?mod=djemlogistics_h

ACCELERATING SUPPLY CHAIN VELOCITY

At some point, retailers and manufacturers, your emphasis on logistics costs to measure Supply Chain performance will constrain your creating the accelerated Supply Chain velocity that will be required. What you do and when you do it can impact its achievement.

STREAMLINING THE END-TO-END SUPPLY CHAIN

Retailers. Manufacturers. A little recognized challenge to improving end-to-end Supply Chain velocity is the presence of logistics providers. Some are placed there with outsourcing. Others are there because--such as ports. All should be evaluated as to need, role, risk.

SUPPLY CHAIN MANAGEMENT, LOGISTICS--CHANGE OR NOT

Retailers. Manufacturers. 3PLs. Logistics providers. New reality with strategic Supply Chain Management driving it. Amazon. Flexport. Retail Apocalypse. Platform Business. Digitization. Blockchain. Velocity. Predictive Analytics. More. So what are you doing about it?

NEW ROLE FOR WAREHOUSING

Retailers. Manufacturers. Suppliers. The new Supply Chain creates Inventory Velocity. That defines a new role for warehousing, especially with the duality of omnichannel and different market segment demands.  Have you created velocity and how are you using DCs?

NEW BUSINESS MODEL FOR 3PLs AND LOGISTICS PROVIDERS

3PLs. Logistics providers. Customers are changing. Your adapting from logistics emphasis to Supply Chain Management with its strategic role & velocity requires understanding the new SCM in order to develop the biz model that defines your new role.

TIPPING POINT FOR RETAILERS, MANUFACTURERS, SUPPLIERS

Retailers. Manufacturers. Suppliers. How are you adapting to the new reality with its strategic Supply Chain Management? Whatever your role, velocity is required. Almost at the point that doing nothing is no longer an option.  SCM

PREDICTIVE ANALYTICS, SUPPLY CHAIN MANAGEMENT, LOGISTICS

Think of what manufacturers, retailers, 3PLs, and logistics providers could do with Predictive Analytics for their Supply Chains & for their customers' Supply Chains & their own businesses. With products.  Customers. Risk. Segment.  Cross Channel. Think beyond...

LULUS NOT OUTSOURCING FULFILLMENT, BIG STORY

Lulus fulfillment lacks the Order Delivery speed, not just shipping, of Amazon. Big story is not doing logistics outsourcing, but doing it in-house. Another sign of achieving Supply Chain velocity & future of 3PLs.

https://www.digitalcommerce360.com/2019/04/17/lulus-opens-a-new-fulfillment-center-to-boost-shipping-speeds/

SUPPLY CHAIN JOB TITLES

Question. Do retailers & manufacturers with employees having job titles with logistics, warehousing, traffic, transportation reflect laggards or leaders in the change to the new reality and strategic Supply Chain Management?  SCM

LACK OF 3PL AND LOGISTICS PROVIDER TRANSITION

The 3PLs & logistics providers who are not transitioning to the new reality reflect fear of change or listening to manufacturers & retail customers who are laggards? The risk in delay of no strategy, new biz model, how to do, what to do, segment to do, etc.!

IT IS ABOUT THE PURCHASE ORDER, NOT THE CONTAINER

Retailers. Manufacturers. The supply of Supply Chains, velocity, & visibility begin upstream. It is about the Purchase Order, not the container. Misplaced emphasis here creates problems downstream with fulfillment and replenishment.

LAST MILE AND CUSTOMER POWER

Retailers. CPG FMCG Manufacturers Transport firms. One lost thing about Last Mile complaints. It is about the customer, not you. And that lost focus is why e-commerce grew. And why power now sits with the customer. What is the online share/growth of complainers? 

ANOTHER SUPPLY CHAIN / LOGISTICS GAME CHANGER FROM AMAZON

Amazon can use satellite network for two Supply Chains--data/information and, in turn, product. Big A uses technology to increase velocity vs competition of retailers, FMCG, CPG, manufacturers, & logistics providers. Another game changer?

https://edition.cnn.com/2019/04/16/tech/amazon-satellite-internet-project-kuiper/index.html?utm_medium=social&utm_term=image&utm_source=twCNNi&utm_content=2019-04-16T14%3A26%3A53

STATESMANSHIP AMONG SUPPLY CHAINS AND LOGISTICS

Trade & Retailers & manufacturers with Supply Chain velocity demands vs logistics Container Lines with unreliable service vs ports as bottlenecks. No statesmanship among all parties to address and correct. Why?

STAGNATION IN RETAIL, MANUFACTURING, AND LOGISTICS

The stagnation in retail, manufacturing, CPG, FMCG opened up the opportunity for Amazon. Stagnation in logistics opened up Flexport and fears of Amazon. Yet how few have stepped up to the challenge and risk their futures.

SOME REALITY WITH SUPPLY CHAIN MANAGEMENT AND LOGISTICS

Interesting contrast. How many articles include Supply Chain & logistics yet how many manufacturers, retailers, & providers are not aggressively transforming to the new reality with velocity, technology, Platform Business, Reverse Outsourcing, & disintermediation.