Sophisticated collaboration with suppliers, the challenges of omnichannel consumer behaviour and rising scale and complexity of operations were recurring issues discussed at this years Retail Week Supply Chain Summit.
Andy Banks, manager of supply chain development at Waitrose, and keynote speaker Jim Stanway, senior director of global supply chain initiatives at Walmart, both highlighted the need to think beyond traditional logistics of warehousing and transport to improve costs and efficiency in the supply chain.
Outlining Waitrose’s recent end-to-end programme to control costs as a percenage of sales at while increasing scale, Banks said, “The only way we could do that was to look beyond the traditional boundaries of logistics.” An important part of that programme was “trying to find collaboration opportunities through things like sharing of forecasts”, as well as sharing transport, to unlock value at supplier level. “That has been the most difficult area to crack,” said Banks. Other elements of the programme included improving in-branch logistics, order effectiveness, as well as some traditional efficiency improvements in its warehouses.
In his summit keynote speech, Stanway, who was charged at Walmart with identifying efficiencies to solve climate change issues, also stressed the importance of collaboration with companies across the supply chain.
He pointed out that in terms of carbon emission reduction, only about 9% of Walmart’s carbon footprint was due to its transport, with 75% coming from energy in its buildings. “We have to find a product yet, where logistics is a big deal,” he added. “Logistics is efficient. What we are looking at is transferring very simple [energy efficient] technologies up the supply chain.”
This required a concerted programme of increased collaboration with suppliers, said Stanway, and Walmart started sending in its engineers into many of its small- to medium-sized suppliers to identify energy efficient improvements.
The retailer also picked strategic suppliers to collaborate and “explore ideas with”, he added. For example, Walmart is currently working on a number of projects with Unilever to test supply chain capabilities. Stanway advised other retailers that were considering such collaborations, to “act as an equal, even though you are the customer, have multiple projects, and if you find a supplier that you can work with and your teams click, that’s quite rare and you want to maximise that opportunity”.
Another key issue discussed during the first day of the summit was the challenge of omnichannel customer behaviour. Stewart Binnie, departing president at Aurora Fashions, said that the increasing commoditisation of products, spurred on by internet giants such as Amazon, meant that an omnichannel approach had become imperative. “It gives the customer whatever configuration of channels to market that they require.”
The supply chain’s job was to successfully implement this omnichannel approach. “You have the rough end of the wedge,” Binnie admitted. “Somehow we have all contrived to be global and promised the customer they can have everything they want wherever they want it, and that is only possible if the supply chain works like a clock.”
Paul Anastasiou, head of distribution of Dot.com at Asda, meanwhile, emphasised that customer behaviour across different platforms, particularly on mobile devices on the move, needed clear communication about delivery statuses. He cited recent survey figures that showed that 85% of respondents wanted to be informed about delivery statuses, 88% wanted to be informed about the dispatch date, and 90% wanted advance warning of a problem or delay. “As logisticians, the world has become much more complex than it was,” he said.
Large retailers were well placed to drive innovation and explore the opportunities provided by mobile apps and social media, he added. “I suspect we’re not too far away - maybe two or three years - where a parcel, a driver or a van is tweeting along the way towards the customer, or some variant of that. And we know that, through social media, feedback of a poor delivery experience is instant, so it’s important to get it right first time.”