Top 4 Omnichannel Challenges

Throughout the weeks we've talked about what omnichannel is and some technologies and strategies that we see companies implementing to take advantage of this new way of doing business. This week we want to focus on some of the largest challenges in creating an omnichannel logistics system. Four of the biggest problems are: inventory visibility, channel specific processes, speed of delivery, and ease of return.

The first, inventory visibility is something we've touched upon over the weeks. In order to connect all the aspects of your business (brick-and-mortar, ecommerce, etc.), the information must be available and consistent across all channels. Otherwise, an omnichannel logistics system will run into problems such as having too much inventory reserved for ecommerce and not enough in the store. One technology that we talked about that can help is RFID, but again there are high investment and setup costs, but those may be outweighed by the benefit of accurate and real-time inventory visibility.

The second are channel specific processes. This means ensuring the customer experience maximizes the channel's capabilities (e.g. physical stores being able to house products and show them off vs. websites displaying products but keeping the brand image), but is still consistent over all channels. This is a challenge in marketing as well as supply chain because while marketing must keep the brand image and customer experience uniform; supply chain must make innovations in the processes used and management of the channels to facilitate an omnichannel presence.

The third and fourth, respectively, are speed of delivery and ease of return. These two go hand-in-hand because the channels through which you're providing fast delivery should have a matching ease of return. The largest action that needs to be taken here is knowing what your customers' expectations are and consistently meeting those. That means, perhaps for an online order they're willing to wait a few days, but for a store pick-up they want it same day. This means that you'll have to create processes that allow for orders only when you know you can fulfill them meeting the customer's expectations, but also processes to actually quickly fulfill the order. Ease of return fits in because just as there are many ways to receive a product; there are many ways to return a product. So again, expectations and the processes a company has in place are the most important. Will your company allow in-store returns of online ordered products? That's a question for your supply chain and how that affects transportation and inventory costs to transfer that from a store back to the warehouse.

These are four of the largest omnichannel challenges in the supply chain, but there are solutions, they're just not simple. We've only taken a small look into the world of omnichannel, but hopefully this post will get our brains thinking in the future's omnichannel mindset.

https://www.shopify.com/enterprise/top-omni-channel-logistics-supply-chain-challenges-ecommerce-founders-must-face

Warehouse Technology Trends: Week 6

TOPIC: The Future of Augmented Reality: Floating Warehouses and Automated Drone Fleet

Hello SCM373! For our Week 6 blog post, we are going to discuss the role of Augmented Reality (AR) in near-to-mid future. Throughout the past six weeks, we have cited numerous examples of AR currently used in traditional brick-and-mortar and e-commerce warehousing. Although AR is a relatively new technology still in its infancy, its machine-learning capabilities far outweigh the initial investment required for the technology. As AR becomes smarter each and every day as it learns its way throughout the warehouse, it has the potential to change the very way we think of traditional warehousing.

In general, warehouses are traditionally corrugated metal buildings that require significant human assistance and capital requirements to process customer orders. The advent of the computer revolutionized the speed and agility of warehouse processing. Rather than humans sorting, collecting, packaging and loading goods into a transport vehicle, robots and other human-assisted technologies have simplified the back-breaking work that was once required of warehouse personnel.

But Amazon is looking to change the very way we look at traditional warehousing. Late last year, they released a bold plan that showed the world just how vital of an asset AR is in the warehousing space. They have proposed an airship warehouse concept that abandons the traditional, physical warehouse for one that hovers in the sky. Embedded here is a short video describing Amazon’s fascinating endeavor to create an airborne fulfillment center (AFC), where AR interacts wireless communication systems, drone delivery units, HD cameras and weather-monitoring equipment to create the first-ever fully autonomous warehouse. Although this endeavor sounds more-or-less like fiction rather than reality, it has the potential to forever cement AR as an industry-leading technology in the supply chain space.

Amazon’s airborne monitoring station (AMS) proposal consists of a fleet of floating warehouses that hover anywhere between 500-100 feet in the air. Walmart has also followed suit with a similar project in hopes to one-up Amazon and increase the competition. Both firms believe that this concept is justifiable because it will reduce both delivery times and last-mile costs in densely-populated areas. Last mile costs are the final expenses incurred on a package before the shipment reaches the hands of the customer.

Although Amazon has filed a patent for this “hovering warehouse” concept, we may never live to see the day where Hindenburg-style blimps eerily hover around East Lansing. The two main reasons why Amazon has filed this patent is to protect their intellectual property in the event they explore the idea in more detail in the future. Another reason why is to ensure that Walmart does not follow suit and copy in a similar fashion and lead to monetary losses. But as of currently, our technology is not yet advanced enough to support fully autonomous warehouse infrastructure.

The Future of the Panama Canal

We have made it to our final post!  As you've joined us on our journey, we have explored a range of topics regarding the expansion of the Panama Canal.  To wrap things up, we want to give you a look into the future of the Panama Canal within the logistics industry.  Alongside logistics, the Canal will also have a future in the lives of consumers like us. 

Prior to our knowledge, the Panama Canal is actually used for more than just transporting goods from point A to point B.  Following the expansion, cruise ships began sailing along the Panama Canal.  For the 2017-2018 cruise season, the amount of cruise ships using the Panamax and Neopanamax Locks is expected to reach 235; meaning more great trip options for you and your loved ones!

With this increasing number of cruise ships taking sail, and the growth of eCommerce as discussed in our past post, we find it highly likely that the Canal will experience another expansion within the next few decades.  We believe that, even though traditional retail will never go out of style, eCommerce will continue to increase.  Also, with the rapid growth of technology and data in our world today, we wouldn't be surprised to see new technologies implemented to advance the current Canal and the ships that use it. 

No matter what changes and advancements are implemented, be they small or large, they are bound to take place due to the sheer fact that our world is progressing at a faster rate than ever before.  As a group, we are excited to see how the Panama Canal continues to progress and effect the logistics industry over the next decade.  We hope that you have learned just as much as we have about the Canal and global trade as we have, and we thank you for following our posts!

The Move Towards Improved Packaging Design and Branding With Ecommerce

In our last entry, we discussed the extra costs associated with no-waste business-to-business packaging customization. This week we will look at how ecommerce has created a need for new packaging designs. With ecommerce, companies have fewer access points to try and get the consumer to buy their product. This creates a larger emphasis on making sure that the items aren’t damaged when they arrive, and also has led to companies creating the best experience possible for their customers.

 In order to improve customer satisfaction in regards to their packaging, Amazon has created Frustration-free Packaging, which has three features. It’s easy to open, 100% recyclable and less packing waste, and it provides protection (“Amazon Celebrates”). This provides a better experience for the customer because there is less damage when being shipped, and customers aren’t getting frustrated trying to open their packages.  Also, the “products ship in their original packaging, eliminating the need for an additional shipping box” (“Amazon Celebrates”). This reduces extra costs and resources that would have been spent transferring products from their original packaging to Amazon-specific packaging.

In addition to the changes of packaging design for ecommerce, there is also a need to maintain the company’s brand throughout its packaging. A particular company, Nutpods, mainly sells its nut-based milk product through Amazon. Because this product is sold competitively online it must differentiate the product through its packaging. It differentiates by having a sleek package design, with the inviting colors of green and white, and it does not require the need for product cooling or insulation.

The importance of packaging design is being understood more so recently. Nutpods’ CEO mentions in the article,“Packaging will remain important because when the consumer unwraps that box and takes the product out, you have to reinforce what your brand stands for” (“Packaging World”).

            Through ecommerce, packaging customization has found a more important role than ever before. It is now used to both satisfy customers through less waste and more efficiency, and expand a brand’s image in the online sector.

Works Cited:

“Amazon Celebrates 10th Holiday Season of Frustration-Free Packaging.” BusinessWire, 21 Nov.2017, www.businesswire.com/news/home/20171121005280/en/Amazon-Celebrates-10th -Holiday-Season-Frustration-Free-Packaging.

Mohan, Anne Marie. “How Will e-Commerce Affect Package Design?” Packaging World, www.packworld.com/article/trends-and-issues/e-commerce/how-will-e-commerce-affect-package-design.

IT in Logistics- What it Means Moving Forward

In our last, summary blog post, we will reiterate some of the technology trends that are shaping the supply chains of the future and how it is affecting the recruiting efforts of SCM grads, such as ourselves.

It is no surprise that technology is changing logistics, warehousing, and the supply chain overall.  In our previous blogs, we touched on topics such as robotics in logistics, how company relationships are changing from large firms dominating on their own to now having to buy-out smaller firms for their technological capabilities, and shifting customer expectations in logistics.  In a logistics world where needs of customers are becoming more and more demanding, technology is constantly developing, and smaller companies are creating technological solutions that could threaten larger companies, it is critical that companies stay up-to-date with the newest trends.  To remain competitive in the market, it is critical for both professionals and businesses to remain aware of how the economy and business needs are changing. Technology as a whole works to simplify processes and tasks to create a more global and efficient supply chain.

As a result of this, it is crucial to remain informed of these current trends and how they will affect jobs moving forward. Many job needs are shifting, not necessarily being deleted as a whole, according to our research this semester.  Needs are shifting from manual to automated in many firms, with an emphasis on innovative, tech-driven problem-solving skills. 

To wrap up, it has been fascinating to see the new trends that are changing logistics activities across almost all supply chains.  As young, supply chain professionals, we must keep in mind these technology trends, develop our problem-solving abilities, and constantly be thinking of the newest way to solve common problems within the firms we will work for.  In an article by Alison Berman, she discusses how technology is improving at a quickening pace, in fact, there is an “exponential doubling in the amount of technology and information created on a daily basis.” (https://singularityhub.com/2016/03/22/technology-feels-like-its-accelerating-because-it-actually-is/#sm.0001qsvgf6irkdu2wi51nlmnb5kw8)

Hop On the Cold Chain Train!

Hop On the Cold Chain Train!

As market demand increases regulation, necessary quality, and security, there grows a new niche in logistics called cold chain. Essentially, cold chain logistics refers to a supply chain that moves products sequentially in refrigerated transportation units without breaks. The most recent forms of transportation that are now included in cold chain logistics are found on the rails. The intriguing part about trains being included in the cold chain is the fact that they are one of the slowest forms of transportation, and to keep it cost efficient, cold, and secure for so long is no easy task. This report is here to inform you of the uprising mode of cold chain logistics and the motives behind the movement.

So why is this new uprising so important? Everything that is being carried by reefer ships, trucks, and trains are very relevant to you. Food that is now being requested to have no GMO's or additives are now even tougher to ship and require better-controlled environments. The average temperature of food and pharmaceutical industries is between 2-8º C and with more and more outbreaks happening every day, it's important to control these even during the transit phase. In the UK alone, there were 500,000 foodborne illness outbreaks reported. Investments are now being made to accommodate these needs with cold chain technologies growing annually at 7% a year through 2020 which puts the industry at a value of $235 billion by 2020.

As stated by the FreshOne website, Europe is the new lead exporter of agricultural goods. This relocates the market and also the trade routes which leaves a wide gap for new and reliable transporters, transportation infrastructure, and cold warehousing. The other factor to look at is the shift in customer demand.  More and more frozen foods are purchased every day and with this new demand, logistics managers need to be more agile when it comes to storing these frozen foods/produce due to demand fluctuation to avoid costly waste.

As efficiency and expertise of this new industry are gained, it brings a new target into scope. This includes bringing cooling technologies into countries that have low GDP's and tropical/hot climates. Attention is turning to many African countries where cooling technologies have not yet entered their warehousing infrastructure. This is a great opportunity to help solve many of the food issues that are seen in countries as such. Having the capabilities to store any type of food in a temperature controlled area gives a lot more room to support countries that struggle financially to feed their population.

Keep an eye open for these evolving technologies and the effect that they will have on business growth and also humanity. Where do you see opportunities for cold chain technologies? Do you see any obstacles besides the ones noted?

References:

http://www.freshonedistribution.com/food-cold-chain/

https://www.slideshare.net/businessdesign2011/cold-chain-logisticsHop

Big Changes for Logistics in the Future - Autonomy

Big Changes for Logistics in the Future

In this blog post we will be discussing interesting changes that can occur due to autonomous technology being implemented into trucks. Changes such as vehicle design and modifications to ports allow for a more efficient and effective supply chain. Feel like you have some creative ideas? Comment below!

What will change?

With the merge of autonomous technology and logistics, there is more room for innovative designs for vehicles. If drivers are removed from an operation that means that the tractor portion of the truck can be replaced with more space for carrying inventory. With the absence of the trucker, Companies can save big on the salaries that they would pay and instead invest that into more autonomous trucks or on other aspects of the business. Another benefit of removing the trucker is that the truck can go longer without going to rest stops and only stopping to recharge. The implementation of autonomous vehicles would render the Hour of Service (HOS) regulation obsolete and would make transportation and logistics much more efficient. More importantly, routes would become more predictable which would improve the logistics process greatly.

Autonomy in trucks would help the process greatly, however drones that would be able to surpass traffic, would also allow for the logistics process to be improved. Drones that are released from company warehouses will be able to fly right to the customer’s doorstep and drop off the parcel/package. In the end, the implementation of these technologies will overall improve the time it takes for the package to travel from warehouse to customer thus improving customer satisfaction as well.

RFID in Omni-channel Retailers

​The common theme with ecommerce retailers and their distribution systems is that their delivery time windows are ever tightening. To suffice the delivery promises made by the retailer many strategies are being put into place to move products faster. Whether this means that products will be coming from the store shelves, distribution centers, or warehouses in stock, one variable does not change. That is, inventory must be visible. The article that we found talks about the advantages and disadvantages of using Radio Frequency Identification (RFID) to keep track of where inventory is located. Then we correlate it back as to why it holds a significance to Omni-channel retailers with ecommerce platforms.

​The main down side to using RFID is the cost. Although the cost per unit has been dropping in recent years, it is still about 10 cents per tag on lower estimates not including the RFID reader. The cost of the tag is then absorbed into the cost of the product. Both cost and security are the main drawbacks to using RFID. The drawback involving security concerns is that hackers could potentially steal the data by scanning tagged items. This could lead to theft and other inaccuracies because of a breech in security. Using RFID therefore also requires both strong software protocols and contingency plans. These drawbacks to RFID ultimately have an end cost. The return on investment to implementing RFID must outweigh the costs for a company to be tempted to use this technology.

​The ultimate goal of using RFID technology is to eliminate the inaccuracies that come with using a bar code alternative. In the early years of RFID, the technology did not accomplish this goal because the data was “buggy”. Improving technologies have made the accuracy of inventory data far more reliable. Another benefit to using the technology is that a variety of products can be consolidated into one shipment between locations without confusion. RFID on individual products allow unique items to be easily identified.

​For an Omni-channel retailer with an ecommerce platform this technology has greater push to be implemented. As we talked about earlier, delivery time promises are more frequently being cut. Which is why inventory accuracy plays such an important roll. Even if we disregard a short delivery time promise,  inventory accuracy can be extremely important to the business, especially if they share that inventory visibility with the customer. If a customer reaches out through a company’s website and finds that they can have their product that day by picking it up in the store, that might be an appealing option. Imagine that same customer’s dismay although if they go all the way to the store to learn that the inventory data was inaccurate. That product was not at the store after going out of their way to find the item that day. The disgruntled customer will be unhappy, potentially avoid giving them their business again, and does not complete the sale. If RFID can make the inventory data accurately visible to their customers it may save the sale, give the customer a high level of satisfaction, and win back their future business.
 
Ames, Ben. “Has RFID found a home?” DC Velocity, Strategic Insight, 10 Sept. 2015, ​www.dcvelocity.com/articles/20150910-has-rfid-found-a-home/.

Artificial Intelligence in Order Processing

As we have talked about in our previous blogs, there is a lot of pressure on businesses today to meet the demands of customers according to their ever increasing expectations. One of the ways that firms are using technology to improve their speed and accuracy of filling orders is to make their order processing systems more efficient, and they are doing this by using artificial intelligence. Artificial intelligence however, like many technologies being implemented in businesses today, will have major impacts on jobs, especially in the logistics industry.

The best way for firm’s to take advantage of the powerful tools that artificial intelligence can provide is in assisting their order processing systems. Order processing performance can be a huge separation factor for companies in highly competitive markets where their orders are constantly being received, and when they are extremely time sensitive. According to a research study from the Hackett Group 2017, companies that perform in the top quartile of worldwide businesses automate their orders 1.5X more often than other companies. These companies also complete orders in a third of the amount of time, and with 50% fewer errors (http://www.digitalistmag.com/finance/2017/08/07/digital-tools-can-close-the-order-management-performance-gap-05254118). These top performing businesses have implemented order processing and management systems with top-of-the-line technology, often including artificial intelligence. Firms that receive orders in multiple forms are the ones that stand to benefit the most from an artificial intelligence assisted order processing system, because of AI’s ability to communicate with other operating systems that firm’s are already using, and because of it’s flexibility when it comes to receiving information. For example, if a firm usually receives it’s orders online, but sometimes receives them via email, fax, or telephone, those other types of orders would have to be manually entered into the order management system, a process that can often take as long as ten minutes to complete. With artificial intelligence assisting a firm’s order management system, these orders that come in from email or fax can be quickly scanned, and the order information can be shared with the order management system instantly. 

Artificial intelligence has been a hot topic in business technology for several years now, and one of the reasons is because of it’s potential threat to kill jobs. This has also been a topic of discussion in the logistics industry for several years because many of the low level jobs in logistics are threatened by automation. However, these jobs are mostly threatened by other technology, not artificial intelligence. Artificial intelligence will change the roles of many jobs, especially in management. Order process managers and warehouse managers will have to adapt to the surge of technology, like artificial intelligence, that will be implemented as firms try to gain an edge on their competitors (https://www.logisticshandling.com/articles/2017/10/17/how-will-automation-impact-warehouse-operations-and-management/). 

Overall, firms will have to adopt technology like artificial intelligence to keep up with their competitors, especially in the highly competitive logistics industry. The use of artificial intelligence will have tremendous benefits for firms, especially in their order processing and management systems. It will be a struggle for some employees to adapt to such high level technology, and many management jobs will have to become much more analytical, and some jobs will be lost to artificial intelligence and other technology. How will firms balance their need to quickly implement disruptive technology like artificial intelligence, while still being responsible employers with the jobs that will be replaced or drastically changed as this technology is implemented?