The Friday Report July 6, 2018

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

On Target:  Order-to-Shelf and Goods-to-Person Automated Fulfillment

Big box retailer Target pledged to invest $7 billion to re-imagine over 600 retail store locations in order to adapt to consumer preferences.  The redesign and re-engineering of the retail store concept will alter the way goods are stored, distributed and shipped to meet consumer expectations.  

The effort will enable consumers to get orders more rapidly, enable Target to offer competitive pricing every day and engage consumers with exclusive brands and an enhanced store experience.

Essential to this effort is new technology and changes to supply chain logistics processes.  Target announced deployment of a goods-to-person automated fulfillment system.  

This keeps workers stationary while enabling them to pick orders for several stores at a time without leaving their respective workstation.

To do this, full cases of product are broken up in the warehouse into “inner packs”, individual items that are stored in plastic totes.  These plastic totes, known as “donor totes” are automatically conveyed from storage to warehouse workstations.  Using orders placed by individual Target stores, workers then select products and place them into outbound delivery totes.

Software that includes the layout of each store works with the automated technology to enable “store friendly” sequencing of goods delivered for fast shelf replenishment.  Rather than using the traditional distribution model, Target is now engaged in a focus on replenishing individual items instead of full case goods.  This changes how product is moved and stored and increases the speed of goods to the shelf to prevent stock outs.

 

The Retail Experience Economy:   E-Commerce Retailers Open Brick-and-Mortar Retail Stores

Innovative retailers are trying a myriad of new strategies to attract and satisfy the needs of consumers.  Many online retailers are now heading back to the “real” world, the real estate world that is, land of brick-and-mortar retail.

As part of the re-engineering of the retail supply chain, some online e-commerce retailers have decided to open retail store locations so that consumers can touch, feel and experience goods.  Types of retail stores vary from showrooms to full service stores.

Here are some of the popular e-commerce retailers that have opened retail stores:

  • Bonobos, a popular online retailer has opened guideshop locations” to make it easier for shoppers to try the fit of their clothing.
  • Fabletics, actress Kate Hudson’s brand of athletic apparel has been opening retail stores across the United States, some of which are situated in shopping mall locations.
  • Amazon has opened several types of retail stores including physical bookstores to sell books, Echo and Kindle products as well a stand-alone locations for its Zappo shoe goods.
  • MadCloth, the online retailer that focuses on style and décor from independent designers has opened a location in Austin TX and offers the services of a ModStylist online.
  • Aesop, the high-end skincare line launched 178 signature stores in 24 countries
  • Birchbox, the personalized beauty product subscription-based box service opened a retail store location in New York City.
  • Country Club Prep, the online preppy retailer that refers to themselves on their website as “Zappos for preppy clothing”, opened a few stores in Kentucky, Virginia and Georgia.
  • Peloton, the online exercise bike retailer, opened showrooms across the country in various locations.
  • Blue Nile, the notable online fine jewelry retailer, has opened brick-and-mortar retail stores in a variety of locations in the Northeastern and Northwestern United States.
  • Untuckit, renowned for its descriptive brand name, this popular online retailer of apparel for men, women and boys launched retail locations in numerous urban areas.

How Innovation is Transforming the Supply Chain Logistics Industry

From the Internet of Things (IoT) and blockchain to 3D printing, robotics, drones and artificial intelligence (AI), innovation is driving transformative changes across the supply chain logistics industry.  Today, technology is being used to solve complicated challenges such as labor shortages, improving last mile delivery time and performance, on-demand parts printing and so much more.  It’s a brave new world everyone.

 

Here are three examples of well-known companies that are using technology to disrupt and transform the supply chain logistics industry:
1. Traditional companies such as Mercedes Benz are taking an active role in developing and proving new technologies.  The Mercedes-Benz Future Truck 2025 is a self-steering truck that is driven by an automated system called Highway Pilot.
Present in the driver’s seat is a human, with a tablet computer. The truck does the driving while the human checks on the condition of freight within the vehicle, plans trips and performs other tasks.  The Mercedes-Benz Future Truck 2025 relies on vehicle-to-vehicle communication (V2V), sometimes referred to as car-to-car communication (C2C) especially when dealing with smaller vehicles.
2. UPS is disrupting the supply chain by becoming a provider of on-demand parts printing services.  Imagine that you are a business owner and an important part or component of your equipment breaks unexpectedly, forcing a work stoppage.  Time is money.  Instead of having to search and place an order online and wait for delivery, you can now contact UPS. UPS will produce the part using a 3D printer and deliver it.  This reduces production time and can save on machining and production cost.
With customers all across the United States, UPS is launching a network nationwide of 60 locations that have 3D printing facilities in order to make this service accessible by manufacturers and consumers. UPS plans to expand 3D printing service to parts of Asia and Europe.  With over 1000 warehouses across the world that are dedicated to spare parts storage for a variety of industries such as medical device manufacturing, aerospace and automotive, the 3D printing service is central to helping UPS transform its business and disrupt the supply chain logistics industry.
3. In late 2017, Pharma industry giants Pfizer and Genentech announced a blockchain platform built on the Ethereum protocol.
Known as the Mediledger Project, the blockchain platform uses Quorum, the enterprise-focuses smart contract platform developed by J.P. Morgan to prevent counterfeit medicine and pills from entering the supply chains of pharmaceutical companies. As part of the Mediledger Project, an array of tools is being developed that will benefit pharmaceutical companies and their supply chains. By using blockchain, pharma companies will be able to utilize de-centralized systems and eliminate security vulnerabilities and data loss.

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