The Friday Report: March 16th, 2018

Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry

“Clicks-to-Bricks”:  Building a New Customer Experience (CX)

Some online retailers are investing in the creation of a new customer experience.  One of the challenges that online retailers tend to have is the loss of connection between the product and the consumer.  When consumers buy online, they are unable to touch, feel and truly experience the products they are purchasing. There is no way to physically try on apparel, footwear or accessories before purchasing.

To eliminate these problems, some e-commerce retailers are trying out a new tactic.  Using physical retail store locations helps online retailers create a more personalized, multichannel shopping experience for consumers.  

This enables consumers to merge the services, convenience and ease of the digital world with the ability to engage in hands-on experiences with the goods they want to purchase.

What is multi-channel shopping?  Also known as multi-channel retailing, this is an increasingly popular strategy in which retailers target customers via numerous channels that are beyond the mere company website.  This includes selling to consumers via social media, different marketplaces such as eBay, Amazon, Etsy and more.  Rather than acting as competitors, these marketplaces can actually be a source of revenue.

The “clicks-to-bricks” strategy can prove effective by drawing in consumers and engaging them in a manner that encourages return visits.

By getting consumers into retail stores, there is a much better chance that when goods are returned, the consumer exchanges or re-purchases rather than just completes the return. This enables the retailer to recoup lost dollars and build a strong, solid relationship and facilitate a positive customer experience for the consumer.

Is Augmented Reality Disrupting the Supply Chain?

Augmented reality “overlays” information onto the real world to help supply chain workers track goods from the point of manufacture until delivery to the consumer as well as identify the position of goods within a warehouse or delivery vehicle.  Let’s look at how this works.

Sensors are placed on packaging.  As the goods move through the supply chain, these sensors provide information that can be used by executives to analyze operational performance.  Sensors can also provide information regarding the location and condition of the products.  In the warehouse, augmented reality has become a transformative tool, saving on training and operational time, especially costly in “pick and pack” operations.

In these types of operations, it is common for workers to have to travel around the warehouse, picking goods for individual orders.  Warehouse workers wear augmented reality (AR) glasses on which an imaginary line is painted on the warehouse floor to make training and searching for products easier.

As warehouse workers are trained using AR glasses, they can be provided with continual feedback via the glasses regarding their performance.  This enables the workers to learn faster while doing each respective task.  In field tests, AR pick and pack systems have demonstrated that they can reduce errors by as much as 40%.

AR systems are also being used in last mile delivery.  Industry giant DHL reports that augmented reality can help drivers in a variety of ways including eliminating the search for parcels inside the truck.  AR can be used to eliminate the need for drivers to remember how their truck was loaded each morning.  The AR system can be used to identify, tag, sequence and locate every parcel.

AR can also be used in combination with artificial intelligence (AI) to guide drivers to the proper building gate or door for delivery then record each delivery.

Supply Chain Cybersecurity Threats May Rise in 2018

The NotPetya attack that caused A.P. Moller-Maersk to shut down operations at 76 port terminals in four countries cost over $2 million dollars US and resulted in weeks of disruptions, countless delays, inconvenience and frustration.  Consulting firm Booz Allen Hamilton foresees that this may be just the beginning of recurrent cyberthreats in 2018.

The NotPetya attack started with an attack on Ukrainian tax software, M.E.Doc then traveled through compromised networks.  Indirect supply attacks have become increasingly popular methods of hitting major targets. Cybercriminals first infiltrate a software provider, vendor or supplier that operates within the supply chain of a larger company in order to gain access.   This is much less expected and an easier route to achieve the ultimate goal.
Other targets for cybercriminals are industrial control systems (ICS) to disrupt operations and extract a ransom payment.  This can shut down or disrupt operations, as was in the case of Nissan, Renault and Merck in 2017.

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