The Amazon Effect

Dan Villanueva   |    
May 15, 2018

“Amazon has changed everything. Now, people are going to become used to two-day shipping and start thinking that’s normal.”

This quote came from one of 83 supply chain executives representing 61 retailers with revenues of more than $1 Billion.  The executives contributed interviews and surveys for the report ”2018 State of the Retail Supply Chain (SRSC)”, referenced by DC Velocity’s April  19, 2018  article ‘Retailers plan to boost 2018 spending on omnichannel fulfillment, technology’, was produced by Auburn University’s Center for Supply Chain Innovation, in collaboration with the Retail Industry Leaders Association (RILA).

The report underscores the “initial need for transformation at many retailers was driven by Amazon and other innovators,” and speaks to multiple factors driving the need for change if retailers are to remain competitive in the eCommerce era.

Omnichannel and eCommerce Explode

Consumer spending through ecommerce channels amounted for $453.46 billion in retail purchases in 2017, with a 15% increase expected in 2018, and, it’s no secret that Amazon is demonstrating the most advanced order fulfillment operations globally. For 61 of the largest global retailers they must compete and prosper with rapidly growing consumer spending and consumer expectations and often, with Amazon on their back.

The report reveals how these leading retailers intend to “improve supply chain execution to gain greater agility, especially in the omni-channel space where speed and responsiveness are critical. The areas of consideration include disruptive technologies (robots to blockchain), efficient urban fulfillment, sustainability and the role of Logistics Service Providers (LPS).”

Check out the names of the well know retailers who participated, and the sometimes-conflicting approaches they are taking, those that are risk-takers and those that are more conservative and risk-averse.

What’s Your Amazon Effect?

What’s the equivalent of “Amazon” in your supply chain? Not every retailer or consumer goods provider has revenue exceeding $1 billion in revenue, always having to look over it’s should at a dominant competitor like Amazon.  However, distribution professionals managing supply chains of any size are challenged to quickly and successfully adapt to new market dynamics and competition, evolving distribution channels and customer demands. Common to most every supply chain operation are year-over-year requirements for continuous system optimization, squeezing out another 8 -12% contribution to the bottom line in the next 12 months.

And, notwithstanding recent headlines about robotics, aerial drones, automated guided vehicles, automated storage and retrieval systems (AS/RS) and automated carousels and conveyors, for many retailers these are not realistic options.

In fact, at many DC operations, the requirement is to achieve new levels of optimization, without changing or replacing the business processes and applications that have been continuously optimized and represent significant investments already made by the company over time.

Does this sound familiar? If so, metaphorically, this common scenario might just be your “Amazon Effect”.

Powerful Mobility Speeds Existing DC Operations

An alternative leveraged by AccuSpeechMobile customers is the power of mobility – the power of today’s workforce using mobile devices, tablets, scanners, RFID and wearables driven by a voice user interface that wirelessly controls and provides new levels of productivity and “device-driven automation” for DC applications across single or multiple DC’s.  

This mobile voice architecture increases workforce productivity, improves data integrity and accuracy by automatically executing application functions on the mobile device, thus speeding and streamlining (automating) existing applications without touching the WMS/ERP, and without changes to the WMS application code or the server infrastructure.

Mobility provides more capability and scalability at a lower cost. This is not what the marketplace calls a “voice application”.  This is advanced mobile automation. Mobility means fast deployment, faster applications, low costs, fast ROI and no risk to existing investments. Mobility means automation.

Oriental Trading Company (OTC) is the nation’s largest direct-to-consumer retailer of value-priced party supplies, toys and novelties.  They drive ecommerce distribution with a fully functional custom build WMS, driving two DC’s together amounting to over 1.3 million square feet.  “We wanted to find a solution that would improve our existing WMS investments without changing or replacing them”, said their supply chain director.

Using AccuSpeechMobile’s device-based architecture they have voice-enabled 36 WMS applications covering inventory, receiving and storage. In addition, Oriental Trading Company took advantage of AccuSpeechMobile’s automation capability by using a single voice command to trigger their Zebra WT41NO wearables to execute multiple application functions automatically, allowing the device to execute sophisticated functions, seamlessly in seconds. Reducing human intervention to an absolute minimum.

Automated & Streamlined: From 11 Events to 2

An OTC receiving application that has 11 possible events that occur between when a case arrives at the dock until it arrives at its location on the warehouse floor. The AccuSpeechMobile solution reduced 11 events to 2 allowing the mobile device to handle the 9 events automatically. No changes to application code no server-integration. That’s automation.

According to Oriental Trading Company “The AccuSpeechMobile solution was precisely what we were looking for. It made our existing applications faster, better and stronger, without changing or replacing them.”

How would you describe your DC’s Amazon Effect?  For every supply chain it’s going to be different, requiring a different approach. Just ask the 83 supply chain executives from 2018 State of Retail Supply Chain report. You can bet that today’s “fast lane” omnichannel market dynamics and contemplating risk and reward, makes for at least a few sleepless nights. Automation is where you choose to find it — but it first should be flexible and scalable across your existing applications and infrastructure, deploy quickly to meet unmet demands you have now and the immediate future – while avoiding high fixed costs. Automation through mobility continues to be a first consideration.

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