Chain of Thought

E-Commerce Success is in the Building

In our recent blog about the link between supply chain standards and business success, we wrote that without standards, a rapid, agile response to a customer placing an order for something they see through their Google Glasses will be more difficult. Same-day service is becoming the new benchmark for e-commerce success, and if you have a voice picking system that’s separate from a warehouse control system that’s separate from a warehouse management system, a streamlined workflow will be hard to establish, and therefore, so will rapid response.

As a way to get more clicks on our blog, I post links to them on the appropriate LinkedIn discussion groups. One of those I post to periodically is The International Code Council, an association dedicated to “providing its members and building industry professionals with the tools they need to ensure the public's safety in the built environment.”  After reading this post on the need for supply chain standards related to e-commerce, one of the members posted this comment:

"Interesting article, but what is the relevance to building codes and standards?"

That’s a reasonable question, considering that membership’s focus on the link between standards and public safety. I responded that I believe the systems that go inside a building have great relevance to building design. After all, building design ultimately determines the flow of product that travels through it. In that light, the building is as much part of a material handling system safety as the racks, conveyors and forklifts that work inside it. The inside and outside of anything should never be considered separately.

What I didn’t say, but will do so here, is that, as more and more stores do online order fulfillment out of their retail environments, and as store personnel become responsible for rapid response to online as well as in-store customers,  it might help a building’s designer to know that customers will be traveling the same aisles as workers filling orders for offsite customers. Even if these workers are on foot, the efficient flow of pedestrian traffic is critical to both efficiency and safety.

I had an interesting discussion with Jay Armant about the need to reconsider a retail store’s layout and workflows in light of e-commerce order fulfillment. He's vice president of product management for Vocollect by Honeywell. He said his company, which provides pick-to-voice systems, is starting to get more and more inquiries related to e-commerce initiatives related to in-store picking. Many want to know how to transform a retail store into an environment that has processes similar to those found in a warehouse. That means picking online orders into a cart or kit for particular customers. Armant sees this as a growth opportunity for material handling system vendors like his company.

“There are opportunities for knowing how to better interleave those employees as they’re picking to make them more efficient,” he said. “You may have someone picking from aisle 2, then they go to aisle 14, then to 3, then 12. How can we make that process better and more efficient as customers order online and expect to get it in an hour and a half or 2 hours? We need to make those processes in the store even better so they can decrease those delivery windows.”

Not only will we be seeing more instances of consumers and order pickers sharing the same space, but so will retailers and vendors. We recently commented on Amazon fulfilling orders out of a P&G distribution center. This is a step beyond what we saw starting to happen several years ago when some vendors housed their inventory in retailer DCs. These retailers only paid for that inventory when they took it out of storage and moved it to their active pick locations.  It was seen as a way to streamline costs as well as provide convenience to the consumer.

These new variations on logistics themes will require everyone involved in supply chain redesign to reconsider what they’ve always done. That includes the designers of the buildings in these chains as well as the designers of the systems used inside of them. As Bruce Stubbs, director of industry marketing for Intermec by Honeywell, told me while participating on the same call with his colleague Jay Armant, there’s a group of people who used to be more inconspicuous during supply chain projects, but are now being called upon to be more prominent problem solvers: the gurus of information technology.

“IT used to be something everyone thought of as sitting in the background and keeping a check and balance on everything that’s going on, but IT is really struggling now,” he said. “But if anyone will find a way to do this, the P&Gs and Amazons have that opportunity.”

As they do so, let’s hope they set new standards for customer service, efficient workflows and the safety measures that make both of those sustainable.

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