OVERVIEW: Multi-channel retailing is a deceptively easy concept. Simple in terminology, but complex to explain and even more so to deliver. This paper provides an overview of what it is about, covering the drivers, benefits, challenges and organizational changes needed to get there.
What is Multi-Channel?
Retailers traditionally maintained a single department, offering sales and support via a single mode of customer interaction like the physical store. Over time this has expanded to include multiple ways of selling to, engaging, and interacting with the customer, primarily via mail, catalogue and telephone.
Advancing technology however, has led to a number of new ways of inter-personal interaction like the internet, mobile phones, and interactive TV; and as these embed deeper into social culture, subsequently new channels for offering product and service.
Multi-Channel then refers to the delivery of customer propositions via multiple channels with at least some degree of cross channel integration in management, information and service, i.e. in a consistent and coordinated way across all channels.
Complete integration and sharing of information and experience across all channels is now being referred to as Merged-Channel retailing, but that's a story for another paper. If you want to know more, have a look at my paper on The High Street 2.0, which is about merging online and offline customer experiences.
Drivers
While emerging technology has been a key enabler, multi-channel growth is essentially driven by consumers. According to Shop.org, 34% of consumers today use at least three channels when shopping. Research has found them to spend up to 10 times more, to generate 25 to 50% more profit and demonstrate greater loyalty than their single-channel counterparts. The core driver then is customer demand.
The other major driver is cost saving through efficiency and effectiveness. Managing channels separately may not only impair customer relationships but also result in cost increases resulting from running separate order-management and customer service operations, multiple warehouses and fulfilment systems, and buyers and merchandisers duplicating effort across the different channels.
Multi-channel is also driven by strategic competitive advantage and differentiation opportunities, and regulatory pressures around ensuring that all customers are able to access products and services on offer.
Benefits
There are a huge number of both organizational and customer related benefits to be gained from implementing a multi-channel strategy. Here’s a few:
Organisational Benefits
• Increased revenue and growth opportunities – more touch points into target market
• Better responsiveness and sensitivity to changing environments
• Competitive advantage over pure-plays particularly around immediacy, education opportunities for complex products and easy e-merchandise returns.
• Organisational efficiency and effectiveness opportunities through sharing of processes,
technology and information
Customer Related benefits
• Better and wider customer interaction with a greater variety of information available for improved understanding of customers and identification of opportunities for increasing value per customer (business intelligence)
• Increased customer loyalty through better understanding of customers
• Better customer experience reducing churn and increasing loyalty
• Opportunity to leverage and improve brand perception
Customers themselves also benefit from increased choice in interaction opportunities and the ability to switch channels as convenient.
Challenges
I'd argue that the underlying success factor in multi-channel retail from an external perspective is a seamless customer experience, and from an internal perspective is a single customer view – different sides of the same coin. Most of the challenges to any retailer appear to stem from attempting to achieve this.
The two key areas of impact here are technological and organizational dependent on retailer age and size. The older the organization, the more likely they are to have legacy systems, and the larger they are, they more likely they are to face resistance to change. Multi-channel may therefore require integration of disparate technologies, while also needing a complete review of structure, skills, staff incentivisation, and a host of other business and marketing processes.
The 5 main challenges faced by similar retailers entering the multi-channel space are as follows:
1. Evaluating cost of investment in development of cost effective, secure, scalable environments and systems integration against probable short term impact on bottom line
2. Pricing across different channels - Store channels have higher cost structures than web channels for example, and price competition is higher on web, but consumers can be put off by different pricing for the same product
3. Channel synchronisation i.e. ensuring brand, customer experience and customer information
consistency across channels while avoiding the 3E trap i.e. trying to provide ‘everything to
everyone everywhere’
4. Problems in merging and standardising customer data i.e. unifying different systems which may have very different data models
5. Difficulties in reducing or abolishing organisational boundaries to cope with new channels
In summary, customers for whom a multi-channel approach will yield the most benefits are often those for whom achieving it the most problematic – they have the largest customer bases, most complex lines, and longest histories of systems development, with many business critical systems that supply old CRM processes.
Organisational Impacts and the Changes Needed
A successful shift to multi-channel retailing requires a number of changes to the way any traditional retail business functions, primarily in the areas of commercial capability, technical capability, and organization and processes.
Commercial Capability
• Retailers must develop the ability to differentiate between offering attributes across different
channels because they vary in effectiveness and efficiency.
• Modeling capability will be crucial in enabling a deep understanding of the target audience’s
channel preferences and their perceptions of service
• Pricing, brand impact and route to market will have to evolve to ensure a seamless customer experience.
• The organisation will have to shift towards developing multi-channel value propositions and
commercial strategies.
Technical Capability
• The core capability needed is a single customer information view, ideally via a single platform for enterprise wide customer relationship management and proposition development. This requires full integration of database and management systems across channels and also with supply chain activities.
• Multi-channel IT architecture requires a channel independent, service oriented and scalable
integration of different front-end and back-end legacy systems and 3rd party services. The front- end should support open industry standards like XML and web-services.
• Measurement capability will be vital for monitoring and review channel integration
Organisational Process
• There may be need for a culture change programme to shift from a product or function focused approach to a customer focused approach
• Where separate channels have their own objectives, management, staff and systems, these may need to be synchronised or even merged if necessary
• Organisational restructure may require a new model that adapts people, processes and
technology to meet the coordinated approach to channel management. Strong support from CEO and Management will be required.
• Multi-channel trend analysis on the industry in question will need to play a larger role in the
corporate strategy formulation process
• Channel strategy and associated business propositions must be embedded into the basic
processes of the organization
Where do you start?
A good place to start your multi-channel journey is by considering Flint and Spieler’s 4 stage process (Source - IBM white paper on Multi-Channel Customer Management: The Benefits and Challenges)
1. Create a multichannel strategy
2. Determine the relative priority for the channels
3. Reorganise for multichannel operation by reconciling central brand, experience and service
standards control with the need for local autonomy in managing individual channels
4. Adopt and implement best practices for integrating new with old technology
Summary
To summarise, while the benefits are many, this paper should have highlighted the fact that there are a number of challenges involved too. Embedding real multi-channel practices will take time as it involves both a cultural and technological shift for any organisation. My recommendation when making early stage investment and ROI decisions around multi-channel retailing, is aim to focus on long-term value and competitive advantage rather than short-term profit. In other words, think longer term when developing your business case, and have the patience to see it through. It will pay off.
Wednesday, November 18, 2009
Monday, November 9, 2009
What Causes Shelf Out-of-Stocks?
Steve Banker from ARC has written up a good article on out of stock management .
See this link for the full article..
What Causes Shelf Out-of-Stocks?
Thursday, November 5, 2009
Retail Customer Experience WebSite
I'd like to recommend a one-stop website for all your retail customer experience needs.
The site showcases; products, events, news articles, company listings, research papers, whitepapers, videos and much much more.
Tuesday, October 27, 2009
RFID - Resurgence in Mining Industry
Mining operations around the world are beginning to realize the tremendous benefits of real-time tracking systems utilizing RFID technologies. Here are just some of the benefits already being enjoyed today:
Safety: Real-time visibility of the accurate location and status of employees is
paramount at all times, but especially in emergencies. RFID systems can remain
operational during accidents, allowing you to know the precise location of personnel
during an emergency, thus greatly reducing respondent response time. RFID can also
be used to quickly locate emergency equipment such as respirators, first-aid kits and
fire suppression equipment.
Asset Management: Manage materials, equipment and personnel more efficiently with
automatic identification solutions. Accurately account for the status and location of all of
your equipment, thus dramatically improving asset utilization, and streamlining the
maintenance and repair process.
Collision Avoidance: NIOSH studies calculate that collisions between haulage
equipment and pedestrian workers or other vehicles claim an average of five lives each
year in surface and underground metal/nonmetal mining operations. Many more
workers are severely injured. New developments in RFID systems can significantly
reduce the risk of collisions, by providing automated alerts when problems appear likely.
Security: RFID can be used to limit workers from using unauthorized equipment as well
as prevent access to unauthorized areas.
No single solution works for every mining operation and a fit gap analysis is recommended so as to ascertain the cost, benefits and best technology and partners to utlise.
Sunday, October 11, 2009
Appealing to the Imagination
Extract from a recent article from Jon Bird.
Harry Gordon Selfridge, the founder of the legendary London department store which now bears his name, once said that “the whole art of merchandising consists of appealing to the imagination. Once the imagination is moved, the hand goes naturally to the pocket. But if the first appeal is to the purse, the imagination is apt to revolt and raise barriers against buying.”
Arguably, much of Australian retail is about appealing “to the purse” rather than “the imagination”. Hence we can end up with relatively sterile retail environments plastered with cardboard screaming about “this week’s offer”. The great retailers of the world, however, have always understood the importance of getting the customer’s juices going before asking for the order. And a big part of the stimulation has been in the form of exciting visual merchandising (VM).
According to David Jenkin in “What Great Retailers Do”, VM is a simple concept; “it’s all about presenting merchandise in the most eye-catching way.”UK and US retailers tend to put more emphasis on the importance of really inspiring VM. UK creative director and retail commentator Mary Portas resurrected Harvey Nichols in the UK by creating highly memorable shop windows and calls them “the art of the high street”. Mickey Drexler (now CEO of American apparel retailer J.Crew) built The Gap/Banana Republic/Old Navy empire on clever VM.
...
It’s time for Australian retailers to lift their sights and embrace VM on a more sophisticated level. By appealing to “the imagination” first and “the purse” second you might just find wallets opening automatically. Jon Bird is CEO of retail marketing specialist IdeaWorks (www.ideaworks.com.au). He can be contacted at jon.bird@ideaworks.com.au.
Harry Gordon Selfridge, the founder of the legendary London department store which now bears his name, once said that “the whole art of merchandising consists of appealing to the imagination. Once the imagination is moved, the hand goes naturally to the pocket. But if the first appeal is to the purse, the imagination is apt to revolt and raise barriers against buying.”
Arguably, much of Australian retail is about appealing “to the purse” rather than “the imagination”. Hence we can end up with relatively sterile retail environments plastered with cardboard screaming about “this week’s offer”. The great retailers of the world, however, have always understood the importance of getting the customer’s juices going before asking for the order. And a big part of the stimulation has been in the form of exciting visual merchandising (VM).
According to David Jenkin in “What Great Retailers Do”, VM is a simple concept; “it’s all about presenting merchandise in the most eye-catching way.”UK and US retailers tend to put more emphasis on the importance of really inspiring VM. UK creative director and retail commentator Mary Portas resurrected Harvey Nichols in the UK by creating highly memorable shop windows and calls them “the art of the high street”. Mickey Drexler (now CEO of American apparel retailer J.Crew) built The Gap/Banana Republic/Old Navy empire on clever VM.
...
It’s time for Australian retailers to lift their sights and embrace VM on a more sophisticated level. By appealing to “the imagination” first and “the purse” second you might just find wallets opening automatically. Jon Bird is CEO of retail marketing specialist IdeaWorks (www.ideaworks.com.au). He can be contacted at jon.bird@ideaworks.com.au.
A fingertip away from desire
A recent article by Jon Bird
In 1923, Robert Woodruff, then President of Coca-Cola, first stated that the iconic soft drink should always be “within an arm’s reach of desire”.Over the next half century or so, Coca-Cola met and exceeded Woodruff’s vision, popping up across the globe in convenience stores, supermarkets, restaurants and vending machines. Wherever thirsty consumers found themselves, there was bound to be an ice-cold Coke close by.Coke took 50 years to achieve its ubiquitous presence.
These days however, retailers can reach the same goal in the twinkling of an eye with relative ease, first via the internet and now the mobile phone. As I’ve written in several columns, the device in the palm of the shopper’s hand really does change everything. Suddenly, as the US consultancy Retail Forward notes, the “store” is no longer a location, but omnipresent. We are rapidly shifting from the concept of “place” to “anyplace” and retailers who recognise and capitalise on this fact will be winners in the future.
In a presentation last month in the US, Dan Stanek, executive VP of Retail Forward, identified that mobility = opportunity. Stanek said that transit, queues or the car can become shopping trips. With the right iPhone App, downtime can be turned into shopping time. The trick is to place your offer within a fingertip’s reach of desire during a customer’s idle moments.
Already, you can purchase music on the move from iTunes with just four clicks. Hear it, want it, click, click, click, click, it’s yours. It’s frighteningly simple... and personally, I love it.
Amazon is at the vanguard of m-commerce (mobile commerce), as they were with shopping via the web. Their new iPhone application elegantly allows you to fill a shopping cart with your fingertips no matter where you are. The app also features a neat function called “Amazon Remembers”. See something you like – say a chair that takes your fancy at a beach cafe – hit the Remembers button and your iPhone camera opens so that you can take a snap and automatically send it to Amazon. Then Amazon analyses the photo and tries to find an item just like it to offer you for sale. Clever stuff.Tesco in the UK is developing its own iPhone app to allow customers to do their supermarket shopping on the move. So you could fill your trolley on the bus, or perhaps even buy your groceries in the middle of a meeting.
US discount department store Target doesn’t yet allow you to easily purchase products from its application, but you can search for items on your mobile, check if they’re available before you shop (what’s increasingly called “know before you go”) and even get the in-store aisle location. Plus the latest deals in the Target Weekly ad are just a click away. And if you do see a product you’d like to purchase, you are linked through to Target’s online site.
Australian retailers are just starting to get their heads around e-commerce, and we can expect a rash of shopping-enabled sites in the next 12-18 months. But it’s worth starting to plan for an m-commerce world. Ask yourself this question: when customers desire your product or service during an idle moment, will you be there at their fingertips?
In 1923, Robert Woodruff, then President of Coca-Cola, first stated that the iconic soft drink should always be “within an arm’s reach of desire”.Over the next half century or so, Coca-Cola met and exceeded Woodruff’s vision, popping up across the globe in convenience stores, supermarkets, restaurants and vending machines. Wherever thirsty consumers found themselves, there was bound to be an ice-cold Coke close by.Coke took 50 years to achieve its ubiquitous presence.
These days however, retailers can reach the same goal in the twinkling of an eye with relative ease, first via the internet and now the mobile phone. As I’ve written in several columns, the device in the palm of the shopper’s hand really does change everything. Suddenly, as the US consultancy Retail Forward notes, the “store” is no longer a location, but omnipresent. We are rapidly shifting from the concept of “place” to “anyplace” and retailers who recognise and capitalise on this fact will be winners in the future.
In a presentation last month in the US, Dan Stanek, executive VP of Retail Forward, identified that mobility = opportunity. Stanek said that transit, queues or the car can become shopping trips. With the right iPhone App, downtime can be turned into shopping time. The trick is to place your offer within a fingertip’s reach of desire during a customer’s idle moments.
Already, you can purchase music on the move from iTunes with just four clicks. Hear it, want it, click, click, click, click, it’s yours. It’s frighteningly simple... and personally, I love it.
Amazon is at the vanguard of m-commerce (mobile commerce), as they were with shopping via the web. Their new iPhone application elegantly allows you to fill a shopping cart with your fingertips no matter where you are. The app also features a neat function called “Amazon Remembers”. See something you like – say a chair that takes your fancy at a beach cafe – hit the Remembers button and your iPhone camera opens so that you can take a snap and automatically send it to Amazon. Then Amazon analyses the photo and tries to find an item just like it to offer you for sale. Clever stuff.Tesco in the UK is developing its own iPhone app to allow customers to do their supermarket shopping on the move. So you could fill your trolley on the bus, or perhaps even buy your groceries in the middle of a meeting.
US discount department store Target doesn’t yet allow you to easily purchase products from its application, but you can search for items on your mobile, check if they’re available before you shop (what’s increasingly called “know before you go”) and even get the in-store aisle location. Plus the latest deals in the Target Weekly ad are just a click away. And if you do see a product you’d like to purchase, you are linked through to Target’s online site.
Australian retailers are just starting to get their heads around e-commerce, and we can expect a rash of shopping-enabled sites in the next 12-18 months. But it’s worth starting to plan for an m-commerce world. Ask yourself this question: when customers desire your product or service during an idle moment, will you be there at their fingertips?
Sunday, October 4, 2009
Top 10 brand and marketing trends for 2010
By Robert Passikoff president, Brand Keys Oct 2009
Niels Bohr once noted that "prediction is very difficult, especially about the future," but then he didn't have access to predictive loyalty metrics. Happily, we do. And, as they measure the direction and velocity of consumer values 12 to 18 months in advance of the marketplace and consumer articulations of category needs and expectations, they identify future trends with uncanny accuracy.
Having examined these measures, we offer 10 trends for marketers for 2010 that will have direct consequences to the success — or failure — of next year's branding and marketing efforts.
1) Value is the new black
Consumer spending, even on sale items, will continue to be replaced by a reason-to-buy at all. This spells trouble for brands with no authentic meaning, whether high-end or low.
2) Brands increasingly a surrogate for "value"
What makes goods and services valuable will increasingly be what's wrapped up in the brand and what it stands for. Why J Crew instead of The Gap? J Crew stands for a new era in careful chic — being smart and stylish. The first family's support of the brand doesn't hurt either.
3) Brand differentiation is brand value
The unique meaning of a brand will increase in importance as generic features continue to plague the brand landscape. Awareness as a meaningful market force has long been obsolete, and differentiation will be critical for success — meaning sales and profitability.
4) "Because I said so" is so over
Brand values can be established as a brand identity, but they must believably exist in the mind of the consumer. A brand can't just say it stands for something and make it so. The consumer will decide, making it more important than ever for a brand to have measures of authenticity that will aid in brand differentiation and consumer engagement.
5) Consumer expectations are growing
Brands are barely keeping up with consumer expectations now. Every day consumers adopt and devour the latest technologies and innovations, and hunger for more. Smarter marketers will identify and capitalize on unmet expectations. Those brands that understand where the strongest expectations exist will be the brands that survive — and prosper.
6) Old tricks don't work/won't work anymore
In case your brand didn't get the memo, here it is: Consumers are on to brands trying to play their emotions for profit. In the wake of the financial debacle of this past year, people are more aware then ever of the hollowness of bank ads that claim "we're all in this together" when those same banks have rescinded their credit and turned their retirement plan into case studies. The same is true for insincere celebrity pairings: think Seinfeld and Microsoft, or Tiger Woods and Buick. Celebrity values and brand values need to be in concert, like Tiger Woods and Accenture. That's authenticity.
7) They won't need to know you to love you
As the buying space becomes even more online-driven and international (and uncontrolled by brands and corporations), front-end awareness will become less important. A brand with the right street cred can go viral in days, with awareness following, not leading, the conversation. After all, everybody knows GM, but nobody's buying their cars.
8) It's not just buzz
Conversation and community is all; eBay thrives based on consumer feedback. If consumers trust the community, they will extend trust to the brand. Not just word of mouth, but the right word of mouth within the community. This means the coming of a new era of customer care.
9) They're talking to each other before talking to the brand
Social networking and exchange of information outside of the brand space will increase. Look for more websites using Facebook Connect to share information with the friends from those sites. More companies will become members of LinkedIn. Twitter users will spend more money on the Internet than those who don't tweet.
10) Engagement is not a fad. It's the way today's consumers do business
Marketers will come to accept that there are four engagement methods including Platform (TV; online), Context (Program; webpage), Message (Ad or Communication), and Experience (Store/Event). But there is only one objective for the future: Brand Engagement. Marketers will continue realize that attaining real brand engagement is impossible using out- dated attitudinal models.
Accommodating these trends will require a paradigm change on the parts of some companies. But whether a brand does something about it or not, the future is where it's going to spend the rest of its life. How long that life lasts is up to the brand, determined by how it responds to today's reality.
Niels Bohr once noted that "prediction is very difficult, especially about the future," but then he didn't have access to predictive loyalty metrics. Happily, we do. And, as they measure the direction and velocity of consumer values 12 to 18 months in advance of the marketplace and consumer articulations of category needs and expectations, they identify future trends with uncanny accuracy.
Having examined these measures, we offer 10 trends for marketers for 2010 that will have direct consequences to the success — or failure — of next year's branding and marketing efforts.
1) Value is the new black
Consumer spending, even on sale items, will continue to be replaced by a reason-to-buy at all. This spells trouble for brands with no authentic meaning, whether high-end or low.
2) Brands increasingly a surrogate for "value"
What makes goods and services valuable will increasingly be what's wrapped up in the brand and what it stands for. Why J Crew instead of The Gap? J Crew stands for a new era in careful chic — being smart and stylish. The first family's support of the brand doesn't hurt either.
3) Brand differentiation is brand value
The unique meaning of a brand will increase in importance as generic features continue to plague the brand landscape. Awareness as a meaningful market force has long been obsolete, and differentiation will be critical for success — meaning sales and profitability.
4) "Because I said so" is so over
Brand values can be established as a brand identity, but they must believably exist in the mind of the consumer. A brand can't just say it stands for something and make it so. The consumer will decide, making it more important than ever for a brand to have measures of authenticity that will aid in brand differentiation and consumer engagement.
5) Consumer expectations are growing
Brands are barely keeping up with consumer expectations now. Every day consumers adopt and devour the latest technologies and innovations, and hunger for more. Smarter marketers will identify and capitalize on unmet expectations. Those brands that understand where the strongest expectations exist will be the brands that survive — and prosper.
6) Old tricks don't work/won't work anymore
In case your brand didn't get the memo, here it is: Consumers are on to brands trying to play their emotions for profit. In the wake of the financial debacle of this past year, people are more aware then ever of the hollowness of bank ads that claim "we're all in this together" when those same banks have rescinded their credit and turned their retirement plan into case studies. The same is true for insincere celebrity pairings: think Seinfeld and Microsoft, or Tiger Woods and Buick. Celebrity values and brand values need to be in concert, like Tiger Woods and Accenture. That's authenticity.
7) They won't need to know you to love you
As the buying space becomes even more online-driven and international (and uncontrolled by brands and corporations), front-end awareness will become less important. A brand with the right street cred can go viral in days, with awareness following, not leading, the conversation. After all, everybody knows GM, but nobody's buying their cars.
8) It's not just buzz
Conversation and community is all; eBay thrives based on consumer feedback. If consumers trust the community, they will extend trust to the brand. Not just word of mouth, but the right word of mouth within the community. This means the coming of a new era of customer care.
9) They're talking to each other before talking to the brand
Social networking and exchange of information outside of the brand space will increase. Look for more websites using Facebook Connect to share information with the friends from those sites. More companies will become members of LinkedIn. Twitter users will spend more money on the Internet than those who don't tweet.
10) Engagement is not a fad. It's the way today's consumers do business
Marketers will come to accept that there are four engagement methods including Platform (TV; online), Context (Program; webpage), Message (Ad or Communication), and Experience (Store/Event). But there is only one objective for the future: Brand Engagement. Marketers will continue realize that attaining real brand engagement is impossible using out- dated attitudinal models.
Accommodating these trends will require a paradigm change on the parts of some companies. But whether a brand does something about it or not, the future is where it's going to spend the rest of its life. How long that life lasts is up to the brand, determined by how it responds to today's reality.
Seven ways to cut costs with retail systems integration and roll-outs
Retail technology like digital signage and next-generation POS can generate revenue, increase efficiency and satisfy customers – but it also requires intelligent use of resources to deploy and maintain. In this webinar, you'll learn seven strategies for working with your systems integration and roll-out teams in order to save money, make the most of your assets, and get deployments up and running faster.
Learn the best ways to communicate with front-line tech staff, and how to make sure they have what they need to use their time and resources efficiently.
Discover the hidden costs of an inefficient maintenance plan – and how you can eliminate them.
Find new ways to make deployment launches smooth and painless.
hit the link for details..
Learn the best ways to communicate with front-line tech staff, and how to make sure they have what they need to use their time and resources efficiently.
Discover the hidden costs of an inefficient maintenance plan – and how you can eliminate them.
Find new ways to make deployment launches smooth and painless.
hit the link for details..
Wednesday, September 30, 2009
CSCMP - Council of Supply Chain Management Professionals
CSCMP Mission: To lead the evolving supply chain management profession by developing, advancing, and disseminating supply chain knowledge and research.CSCMP Vision: The Council of Supply Chain Management Professionals is the preeminent worldwide professional association of supply chain management professionals.
CSCMP exists to:
Provide opportunities for supply chain professionals to communicate in order to develop and improve their supply chain management skills
Identify and conduct research which adds to the knowledge base of supply chain theory and practice
Create awareness of the significance of supply chain to business and to the economy
CSCMP Values: As a professional not-for-profit organization, the Council of Supply Chain Management Professionals holds these values:
We operate with the highest standards of integrity and ethics.
We are committed to the individual professional development of our members.
We are an inclusive organization, open to all who wish to enhance their supply chain management knowledge.
We endeavor to be the supply chain management thought leaders by encouraging, promoting, and disseminating leading edge products and services.
We endeavor to offer products and services of the highest quality.
CSCMP Goals:
1) Provides leadership in developing, defining, understanding, and enhancing the logistics and supply chain management profession.
2) Enhances member value through education, networking, research, communication, and other services
3) Operates with sound business practices.
There are local CSCMP groups across Asia , Australia and the globe.
i urge you to hit the website and take advantage of the councils collaterals, expertise and members.
Monday, September 28, 2009
Buying a WMS in an M and A environment
With quite a few mergers & acquisitions in the WMS space during the recent months, I was wondering what should be the strategy for companies planning to implement a WMS?
Also, for companies that have already implemented these packages, what should be their strategy with respect to upgrades, support etc.?
Full Article:
Adapted from a response by Jim Willems on 10/03/2008. I believe that if a company completes an accurate selection process (meaning they buy a system according to their needs not their desires) and they structure the contract terms correctly, the consolidation of the WMS industry should be minimal. In my experience most clients are looking for a 5 to 7 year life from their WMS - meaning their system should be up and live prior to their vendor being purchased. Most acquiring firms are not going to immediately change anything, allowing for the client to get even closer to the point of their systems live expectancy. If the new vendor does significantly changes to the culture, pricing, and system the client should be at a point of having their ROI and able to move to a new system if needed.
Also, for companies that have already implemented these packages, what should be their strategy with respect to upgrades, support etc.?
Full Article:
Adapted from a response by Jim Willems on 10/03/2008. I believe that if a company completes an accurate selection process (meaning they buy a system according to their needs not their desires) and they structure the contract terms correctly, the consolidation of the WMS industry should be minimal. In my experience most clients are looking for a 5 to 7 year life from their WMS - meaning their system should be up and live prior to their vendor being purchased. Most acquiring firms are not going to immediately change anything, allowing for the client to get even closer to the point of their systems live expectancy. If the new vendor does significantly changes to the culture, pricing, and system the client should be at a point of having their ROI and able to move to a new system if needed.
Monday, September 14, 2009
Explaining the Value of Logistics to the CEO
By Adrian Gonzalez - ARC Advisory Group
Is logistics a cost center or a competitive differentiator? Is it a core competency or a function that should be outsourced?
I would argue that most CEOs, at least historically, have viewed logistics as a cost center (trucks, warehouses, overhead, etc.), a business function that falls short of their "core competency" definition. This perspective has led to the ongoing growth (except for this year) of the logistics outsourcing (3PL) industry.
Of course, just because a business function is not considered a core competency, or is outsourced to a third party, doesn't necessarily mean that it's not valued by the CEO. The true test of value is whether a CEO is willing to continue investing in logistics, either internally-in people, technology, assets, etc.-or by developing more strategic relationships with 3PL partners. If neither type of investment is taking place, then you have a problem.
Is this the case at your company? If so, how do you explain the value of logistics to your CEO?
The common advice is to communicate the value of logistics in terms the CEO, as well as the CFO, can understand. In other words, you have to speak their language, which entails linking logistics with financial metrics. Unfortunately, many logistics executives are financial illiterates. If you can't read and understand an income statement or balance sheet, for example, then your ability to effectively communicate the value of logistics to the CEO/CFO is severely limited.
Placing logistics in a financial context will get your foot in the door, but is it enough?
I don't think so. CEOs suffer from a similar deficiency: most of them are supply chain and logistics illiterates. They are often the weakest link in a company's supply chain, as Rueben E. Slone, Executive VP of Supply Chain at Office Max, and his co-authors wrote in "Are You the Weakest Link in Your Company's Supply Chain?" (Harvard Business Review, September 2007). "In this article," the authors wrote, "we advise CEOs not to become unwitting weak links in their companies' own supply chain strategies. The costs of neglecting important matters of supply chain management are damaging to any type of business for which SCM is potentially a competitive differentiator (most notably, manufacturing, retail, and distribution). CEOs should get involved."
Sir William Osler, MD, the father of modern medicine, once said, "Medicine is learned by the bedside and not in the class room. Let not your conception of manifestations of disease come from work heard in the lecture room or read from the book: see and then research, compare and control. But see first."
In order for CEOs to truly appreciate the value of logistics, they too must see first...by spending the day picking goods at the warehouse; driving shotgun on a delivery truck; finding capacity for uncovered loads; tracking and tracing shipments; building pallets near the loading dock; calling vendors overseas, and taking calls from customers, in both cases the same question: Where's our order?
If getting your CEO immersed in your logistics operations is too much to ask, then have him attend a supply chain and logistics conference...or two or three, especially the ones organized by the software and technology vendors that power your logistics processes. While not as good as see first, spending a few days with supply chain and logistics professionals, from many different companies and industries, presenting case studies and discussing industry trends, is still a valuable type of seeing and hearing.
How do you explain the value of logistics to a CEO? You don't. The value has to be experienced firsthand, like getting soaked in the rain. Everything else is just words and numbers.
Is logistics a cost center or a competitive differentiator? Is it a core competency or a function that should be outsourced?
I would argue that most CEOs, at least historically, have viewed logistics as a cost center (trucks, warehouses, overhead, etc.), a business function that falls short of their "core competency" definition. This perspective has led to the ongoing growth (except for this year) of the logistics outsourcing (3PL) industry.
Of course, just because a business function is not considered a core competency, or is outsourced to a third party, doesn't necessarily mean that it's not valued by the CEO. The true test of value is whether a CEO is willing to continue investing in logistics, either internally-in people, technology, assets, etc.-or by developing more strategic relationships with 3PL partners. If neither type of investment is taking place, then you have a problem.
Is this the case at your company? If so, how do you explain the value of logistics to your CEO?
The common advice is to communicate the value of logistics in terms the CEO, as well as the CFO, can understand. In other words, you have to speak their language, which entails linking logistics with financial metrics. Unfortunately, many logistics executives are financial illiterates. If you can't read and understand an income statement or balance sheet, for example, then your ability to effectively communicate the value of logistics to the CEO/CFO is severely limited.
Placing logistics in a financial context will get your foot in the door, but is it enough?
I don't think so. CEOs suffer from a similar deficiency: most of them are supply chain and logistics illiterates. They are often the weakest link in a company's supply chain, as Rueben E. Slone, Executive VP of Supply Chain at Office Max, and his co-authors wrote in "Are You the Weakest Link in Your Company's Supply Chain?" (Harvard Business Review, September 2007). "In this article," the authors wrote, "we advise CEOs not to become unwitting weak links in their companies' own supply chain strategies. The costs of neglecting important matters of supply chain management are damaging to any type of business for which SCM is potentially a competitive differentiator (most notably, manufacturing, retail, and distribution). CEOs should get involved."
Sir William Osler, MD, the father of modern medicine, once said, "Medicine is learned by the bedside and not in the class room. Let not your conception of manifestations of disease come from work heard in the lecture room or read from the book: see and then research, compare and control. But see first."
In order for CEOs to truly appreciate the value of logistics, they too must see first...by spending the day picking goods at the warehouse; driving shotgun on a delivery truck; finding capacity for uncovered loads; tracking and tracing shipments; building pallets near the loading dock; calling vendors overseas, and taking calls from customers, in both cases the same question: Where's our order?
If getting your CEO immersed in your logistics operations is too much to ask, then have him attend a supply chain and logistics conference...or two or three, especially the ones organized by the software and technology vendors that power your logistics processes. While not as good as see first, spending a few days with supply chain and logistics professionals, from many different companies and industries, presenting case studies and discussing industry trends, is still a valuable type of seeing and hearing.
How do you explain the value of logistics to a CEO? You don't. The value has to be experienced firsthand, like getting soaked in the rain. Everything else is just words and numbers.
Thursday, September 10, 2009
Consolidation looms in WMS market
Top WMS suppliers gain more market share in shrinking market By Dave Hannon
Recessions tend to drive market consolidation, as the lean revenues thin out the herd in nearly all markets. And the warehouse management systems (WMS) market is no exception, say market analysts at ARC Advisory Group.
In a recent report, ARC analysts say the top-tier vendors in the WMS market saw strong growth in 2008, as they have in most of the past 10 years ARC has performed the study. However, that trend of the big getting bigger cannot continue for much longer, and soon—maybe as soon as next year—the WMS market will have consolidated to the point where the only way the top five vendors can grow is by taking over one of the other top five.
Overall the WMS market shrank by 1% in 2008 and is forecast to decline again this year in total size before trending back up to grow again in 2010 through 2013. Compound annual growth for the WMS market through 2013 is forecast to be 2.2%, but much of that top-line growth is driven by the largest vendors.
“ARC expects that at least 10 WMS suppliers will go out of business”in 2010, says Steve Banker, ARC analyst. “In a smaller, consolidated market, the major suppliers will find that the WMS market is much more of a zero sum game. One vendor’s growth will come at another’s expense.”
And among the smaller vendors, there is likely to be a snowball effect—as WMS buyers get more concerned about the risk or going with a lesser-known vendor, they will ask those vendors to open up their books. “And many will fail that test,” ARC reports.
Recessions tend to drive market consolidation, as the lean revenues thin out the herd in nearly all markets. And the warehouse management systems (WMS) market is no exception, say market analysts at ARC Advisory Group.
In a recent report, ARC analysts say the top-tier vendors in the WMS market saw strong growth in 2008, as they have in most of the past 10 years ARC has performed the study. However, that trend of the big getting bigger cannot continue for much longer, and soon—maybe as soon as next year—the WMS market will have consolidated to the point where the only way the top five vendors can grow is by taking over one of the other top five.
Overall the WMS market shrank by 1% in 2008 and is forecast to decline again this year in total size before trending back up to grow again in 2010 through 2013. Compound annual growth for the WMS market through 2013 is forecast to be 2.2%, but much of that top-line growth is driven by the largest vendors.
“ARC expects that at least 10 WMS suppliers will go out of business”in 2010, says Steve Banker, ARC analyst. “In a smaller, consolidated market, the major suppliers will find that the WMS market is much more of a zero sum game. One vendor’s growth will come at another’s expense.”
And among the smaller vendors, there is likely to be a snowball effect—as WMS buyers get more concerned about the risk or going with a lesser-known vendor, they will ask those vendors to open up their books. “And many will fail that test,” ARC reports.
Tuesday, September 8, 2009
Wednesday, August 26, 2009
What makes a great shopping experience
Reserach results from the study were outlined in Getting to “Wow”: Consumers Describe What Makes a Great Shopping Experience published at Knowledge@Wharton.
What is interesting in this article is their list of five major areas that contribute to a great shopping experience:
Engagement: being polite, genuinely caring and interested in helping, acknowledging and listening.
Executional excellence: patiently explaining and advising, checking stock, helping to find products, having product knowledge and providing unexpected product quality.
Brand Experience: exciting store design and atmosphere, consistently great product quality, making customers feel they’re special and that they always get a deal.
Expediting: being sensitive to customers’ time on long check-out lines, being proactive in helping speed the shopping process.
Problem Recovery: helping resolve and compensate for problems, upgrading quality and ensuring complete satisfaction.
Great shopping experiences are those we talk about to others.
Retailers trading under a common shingle - the various newsagency brands or just the word newsagency - need to collectively agree standards and strategies which drive great shopping experieences and commit to relentless pursuit of these standards and the implementation of the strategies.
Too many newsagencies are run by people who prefer process work over business leadership, people who have bought an income and not a business.
The strength of our future as a retail channel depends on how many of us want to provide a great shopping experience.
How does your business shape up ?
What is interesting in this article is their list of five major areas that contribute to a great shopping experience:
Engagement: being polite, genuinely caring and interested in helping, acknowledging and listening.
Executional excellence: patiently explaining and advising, checking stock, helping to find products, having product knowledge and providing unexpected product quality.
Brand Experience: exciting store design and atmosphere, consistently great product quality, making customers feel they’re special and that they always get a deal.
Expediting: being sensitive to customers’ time on long check-out lines, being proactive in helping speed the shopping process.
Problem Recovery: helping resolve and compensate for problems, upgrading quality and ensuring complete satisfaction.
Great shopping experiences are those we talk about to others.
Retailers trading under a common shingle - the various newsagency brands or just the word newsagency - need to collectively agree standards and strategies which drive great shopping experieences and commit to relentless pursuit of these standards and the implementation of the strategies.
Too many newsagencies are run by people who prefer process work over business leadership, people who have bought an income and not a business.
The strength of our future as a retail channel depends on how many of us want to provide a great shopping experience.
How does your business shape up ?
Monday, August 17, 2009
Top 10 Supply Chain Technology Trends
It’s easy to name “mobility” and “wireless” as trends, but it’s less clear exactly what direction these developments are taking and how they can be used to improve business. Intermec have recently released a new whitepaper which while having an Intermec bias of sorts does provide a good framework for current tech trends in supply chain. ( See link)
In summary the whitepaper lists the following trends:
Here are the top 10 trends and technologies impacting supply chain operations spanning production, distribution, retail and remote service.
1. Comprehensive connectivity – from 802.11 wireless LAN technologies, cellular networks, Bluetooth
2. Voice and GPS communication integrated into rugged computers
3. Speech recognition
4. Digital imaging
5. Portable printing
6. 2D & other bar coding advances
7. RFID
8. RTLS
9. Remote management
10. Wireless and device security
You’re probably familiar with the technologies listed above, but perhaps not with the latest developments and trends. For example, did you know that practically any application can be
easily modified to accept speech input because of the recent development of terminal emulation-based speech recognition technology? Did you know that Bluetooth, 802.11b/g, cellular and
GPS communication are all available in a single handheld device?
Did you know improved optics allow 2D bar codes on paper to be read at greater distances (over 50 feet) than 1D bar codes on retroreflective labels?
Read the whitepaper in full to learn more about how these and other developments are helping make production, distribution, service and other supply chain operations more efficient.
In summary the whitepaper lists the following trends:
Here are the top 10 trends and technologies impacting supply chain operations spanning production, distribution, retail and remote service.
1. Comprehensive connectivity – from 802.11 wireless LAN technologies, cellular networks, Bluetooth
2. Voice and GPS communication integrated into rugged computers
3. Speech recognition
4. Digital imaging
5. Portable printing
6. 2D & other bar coding advances
7. RFID
8. RTLS
9. Remote management
10. Wireless and device security
You’re probably familiar with the technologies listed above, but perhaps not with the latest developments and trends. For example, did you know that practically any application can be
easily modified to accept speech input because of the recent development of terminal emulation-based speech recognition technology? Did you know that Bluetooth, 802.11b/g, cellular and
GPS communication are all available in a single handheld device?
Did you know improved optics allow 2D bar codes on paper to be read at greater distances (over 50 feet) than 1D bar codes on retroreflective labels?
Read the whitepaper in full to learn more about how these and other developments are helping make production, distribution, service and other supply chain operations more efficient.
Sunday, August 16, 2009
Warehouse & DC: Voice broadens its horizons
Over the last five years, voice technology went from “bleeding edge” to “leading edge” to ultimately joining the ranks of other affordable, reliable technologies for use in picking operations. Here’s where it’s going and how it’s being applied by two savvy DC managers.
The verdict is in and there’s very little debate: Voice-directed picking has proven time and again that it can help companies make significant strides in productivity, accuracy, and safety improvement. By converting pick lists to voice commands and transmitting them to workers via headsets linked to wearable, mobile computers over wireless networks, voice allows workers to free their hands and eyes for the most important task at hand—the picking of product. And by all accounts, interest in voice, especially in grocery and retail verticals, is not expected to wane anytime soon.
According to Eric Lamphier, senior director of product management for Manhattan Associates, his company’s voice implementations are going global with the majority of the demand coming from private, non-3PL sectors. “The grocery/food customers have certainly been leaders when it comes to implementing the technology, as full case, pick-to-pallet operation remains a very good fit for voice,” says Lamphier, adding that the healthcare and pharmaceutical sectors are rapidly following.
Tom Singer, principal at supply chain services provider Tompkins Associates, agrees with Lamphier’s assessment, but puts forth another theory for voice’s growing popularity. “Over the past few years,” says Singer, “top tier solution providers like Manhattan and Red Prairie have been collaborating with vendors and voice developers offering direct interface, out-of-the-box voice solutions.” Users simply pay a licensing fee for their pick engines to become voice-enabled.
According to both Singer and Lamphier, perhaps the latest technological development with voice responsible for driving its growth is the introduction of multi-modal devices. “What it gives you is the ability for dual use,” says Singer. “Pickers can work in a voice-only mode when doing straight picking, but switch to the screen or display when doing cycle counts and replenishments.”
Also Vocollect are ramping up its efforts and focus in Asia Pacific.
Voice for high volume , full case pick is an ideal solution.
Look out for voice is other domains such as medical - coming soon
Want to know more - lets chat.
The verdict is in and there’s very little debate: Voice-directed picking has proven time and again that it can help companies make significant strides in productivity, accuracy, and safety improvement. By converting pick lists to voice commands and transmitting them to workers via headsets linked to wearable, mobile computers over wireless networks, voice allows workers to free their hands and eyes for the most important task at hand—the picking of product. And by all accounts, interest in voice, especially in grocery and retail verticals, is not expected to wane anytime soon.
According to Eric Lamphier, senior director of product management for Manhattan Associates, his company’s voice implementations are going global with the majority of the demand coming from private, non-3PL sectors. “The grocery/food customers have certainly been leaders when it comes to implementing the technology, as full case, pick-to-pallet operation remains a very good fit for voice,” says Lamphier, adding that the healthcare and pharmaceutical sectors are rapidly following.
Tom Singer, principal at supply chain services provider Tompkins Associates, agrees with Lamphier’s assessment, but puts forth another theory for voice’s growing popularity. “Over the past few years,” says Singer, “top tier solution providers like Manhattan and Red Prairie have been collaborating with vendors and voice developers offering direct interface, out-of-the-box voice solutions.” Users simply pay a licensing fee for their pick engines to become voice-enabled.
According to both Singer and Lamphier, perhaps the latest technological development with voice responsible for driving its growth is the introduction of multi-modal devices. “What it gives you is the ability for dual use,” says Singer. “Pickers can work in a voice-only mode when doing straight picking, but switch to the screen or display when doing cycle counts and replenishments.”
Also Vocollect are ramping up its efforts and focus in Asia Pacific.
Voice for high volume , full case pick is an ideal solution.
Look out for voice is other domains such as medical - coming soon
Want to know more - lets chat.
Monday, August 3, 2009
DHL Scores Five Asian Logistics Awards
By Martin Murray
The 2009 Frost & Sullivan Asia Pacific Transportation & Logistics Awards were presented at a ceremony in Singapore last week. The big winner at the awards was the global logistics company, DHL. The logistics giant was the winner in five categories, including received two of the regional Best Practices awards, comprising Manufacturing Logistics Service Provider of the Year and Green Logistics Service Provider of the Year. DHL was a winner in three Voice of Customer awards, including the Pharmaceutical Logistics Service Provider of the Year for Malaysia as well as Pharmaceutical Logistics Service Provider of the Year for Indonesia and FMCG and Retail Logistics Service Provider of the Year for Indonesia.
The 2009 Frost & Sullivan Asia Pacific Transportation & Logistics Awards were presented at a ceremony in Singapore last week. The big winner at the awards was the global logistics company, DHL. The logistics giant was the winner in five categories, including received two of the regional Best Practices awards, comprising Manufacturing Logistics Service Provider of the Year and Green Logistics Service Provider of the Year. DHL was a winner in three Voice of Customer awards, including the Pharmaceutical Logistics Service Provider of the Year for Malaysia as well as Pharmaceutical Logistics Service Provider of the Year for Indonesia and FMCG and Retail Logistics Service Provider of the Year for Indonesia.
Subscribe to:
Posts (Atom)