Page 69 - Retail World March 2021

BUILDING RESILIENCE IN THE RETAIL SUPPLY CHAIN While countless industries have been severely hit by Covid-19, the retail and supply chain sectors in particular have faced exponential increases in demand over the past year as more consumers gravitate towards e-commerce. By Dematic Senior Regional Director oMf Sales and Solution Development Pas Tomasiello. any retailers have been driven to re-evaluate their supply chain, aiming to become extremely resilient and flexible, not only to withstand the current situation, but also to position themselves competitively within the market into the future. Rise of e-commerce and consumer expectation Today, the expectations of consumers are relentlessly high, particularly in the online retail space, and they exist along the many avenues of the omnichannel. When consumers have an idea of a product, they expect an almost unlimited array of choices to be available, and want to be able to buy it online and have it delivered as quickly as possible. Many retailers now offer next- day delivery, with some pushing for same-day deliveries, to give them the competitive edge. Consumer expectations combined with increasing online demand have created ever- increasing pressure on supply chains in Australia and across the globe. For retailers to handle this pressure, they invest in maximising resilience to succeed during these demanding circumstances. Those aiming to capitalise on the recent surge in online sales, while remaining competitive, agile and, most importantly, profitable, will be the ones to survive and thrive. But of course, this is no easy feat. Expectations make for added supply chain stress This new landscape has subsequently piled pressure on distribution centres (DCs) to fulfil high volumes of online orders. Many existing supply chains use large DCs to fulfil bulk orders, to replenish traditional storefronts, and to keep things in stock so that consumers can browse and buy items online. Consumers today are more educated and savvier, and have an endless amount of information at their fingertips, be it product choice and cost comparisons, availability, delivery timing and returns policies, as well as vendor reviews. This in turn has set a new bar for consumer expectations. In this ever- changing landscape, DCs are now required to not only replenish storefronts, but also fulfil online orders, fast, with 100 per cent accuracy and at the lowest cost. Returns in the e-commerce retail chain Within the e-commerce space, how returned goods are handled is critical, as returns policies are a big factor for consumers, determining whether they’ll buy a product, and from which retailer. They want to know what the returns policy is, how easy it is to return items, and whether they’re going to get their money back or credit for future purchases. As retailers, the key for success in this area is to be swift and seamless, to quickly complete the returns process, refund the purchase, and have the goods available in inventory ready for sale as soon as possible. High-speed fulfilment and seamless returns With the need to optimise fulfilment speed and last-mile delivery, retailers (and some pioneering food manufacturers) are implementing micro- fulfilment centres, highly compact, highly automated order fulfilment systems that can be located in stores and close to high density population centres. Another innovation increasing the level of responsiveness, productivity and accuracy to fulfil orders within DCs are goods-to-person picking solutions, which work to deliver items directly to pick stations — eliminating the need for operators to spend time manually locating and retrieving items travelling across the DC. For returns, there are effective subsystems comprising inspection benches and automation. Once the returns and inspection tasks are complete, the goods are returned into the automated storage buffer. This integration of automation allows operations rapidly to deliver products directly to storefronts and to consumers, as well as to process returns. As supply chains face high demand, high consumer expectations and the pressure to fulfil and deliver goods quickly, these integrations of automation are beginning to pave the way to a supply chain equilibrium, with e-commerce retailers fulfilling orders at a remarkably high rate, cost-effectively. Automation builds resilience The flexible nature of automation technology, along with its unique ability to adapt and grow with the retail market itself, makes it the most important, flexible and reliable building block for harnessing resilience and agility in the supply chain. Automation also addresses the challenge faced by many companies in finding and retaining labour for their operations. In Australia and New Zealand, the cost of labour is constantly rising, and keeping staff safe, complying with regulations, and requiring higher productivity from people are real challenges facing most fulfilment industries today. Likewise, occupational health and safety are always at the top of our minds, and to keep up with demand and the changing dynamics within our supply chain, we’re asking our teams to work faster than they’re able to. However, through automation, not only are we able to create a safer work environment for our employees, but we also allow ourselves the benefit of removing the reliance on labour itself, which in the end builds resilience within operations, while minimising any interruptions to productivity. Flexible, resilient operations are key Most retail models are geared specifically towards meeting the demands of the end consumer, but how does this play out in today’s e-commerce and omnichannel landscape? The keys are (and always will be) resilience and adaptability. Retailers with flexible, resilient operations are the ones able to cope with the increasing demands of consumers. Retailers adaptable enough to capitalise on technology gain a competitive edge. It can help them obtain valuable consumer insights, as well as insights into their own operations, to provide a seamless interface between humans, products, automation, robotics and ‘big data’, to maximise operational visibility, performance and responsiveness to exceed consumer demands. SUPPLY CHAIN MAR, 2021 RETAIL WORLD 67