Wednesday 22nd Nov 2017 - Logistics Manager

Retail gets real

Anyone who has bought white goods, consumer electronics or just about any big ticket item recently will be well aware of just how inadequate most shop-floor systems are when it comes to checking on stock availability or delivery times.

Forget all about those much-publicised PDAs at retailers like Best Buy in the US, used by staff to access product information; forget all about those new tablet PCs integrated with remote central merchandising systems over a mixture of wireless and wide area network. No. Ask about availability at many stores and the sales assistant will disappear to a back room to check the computer. Ask about delivery dates and the same happens. The assistant might attempt to sell you the extended warranty without leaving the floor but just about anything else involves that all too familiar disappearing act.

Hopefully, such scenarios are set to become a thing of the past with a new generation of fully integrated supply chain developments enabling not just stock checks but track and trace monitoring from the shop floor.

Like so many other web-based technologies many of these new tools originated in the dot-com world – as Manhattan Associates’ recent move into transportation management with the purchase of Logistics.com, reminds us. Many, too, were created to handle the virtual world of those early e-tailers where start-up companies operated with no stocks but simply implemented fast track information routes to channel customer orders direct to suppliers.

A minimal inventory system
In the new real-time model, retailers can integrate directly both with suppliers to check on stock, and with third party logistics companies to find an appropriate carrier. They can then operate the sort of minimal inventory operation invented by the dot-coms.

As David Stephenson, UK managing director of software developer Yantra says: ‘There is an argument which goes something like: why should a retailer buy, say, an expensive flat screen TV from Philips to hold it in stock and then ship it to a customer – with the risk of damage en route? Why not just pass the order to Philips for direct delivery when the customer wants to buy and just keep a showroom sample in the store.’

This approach is far from revolutionary – especially if the retailer has enough clout. Wal-Mart already leads the field in ‘scan-based trading’ where suppliers are paid only when a customer buys the goods in store and the entire retail inventory is still, technically, owned by the vendors. Real-time capability already exists to drive this stock-free world – all that is needed is to integrate the order management system in the store with transport management software and the supplier’s stock files. Add a web browser at point of sale and the result is a real-time, seamless model from end purchaser to produce.

Integrate with third parties
It is also a model which software from major players like SAP will help enable in future. SAP’s latest release (v.4.7) includes a rather clever system called NetWeaver that incorporates a portal layer to enable integration with third parties. SAP is already a major provider of enterprise systems to the manufacturing sector so simplifying the integration problems involved in linking retail systems though to a diversity of suppliers.

But real-time retailing is affecting more than just customer order management. Marks & Spencer links actual sandwich sales into its demand forecast model to provide suppliers with its changing requirements for tomorrow while today’s munchers are still buying their lunch-time snack. And Tesco has developed a ‘mobile shelf edge’ system giving store staff a multi-function PDA to manage stock, prices and customer queries using real-time information. Ocado is optimising delivery scheduling by matching incoming orders to existing demand patterns – encouraging customers to be environmentally friendly and align their slots with their neighbours…and the list goes on.

This sort of real – or near-real – time information dramatically improves retail response to a wide range of supply chain events.

How easy life will be in a few years time when we ask that white goods sales assistant about availability, fitting or delivery. Out will come the PDA, click will come the answers, and direct from manufacturer will come the goods.