MHI Solutions - Volume 4, Issue 3 - 81


FUlFIllMENT UPDATE

The Shared Economy and the
Omnichannel Supply Chain
By kATIE kUEHNER-HEBERT

B

2B, distributed inventory networks and "less than truckload"
shipping: Could uberization of
the supply process be next?
"We have seen the advent of the sharing economy explode-the concept that
companies don't necessarily need to
own the entirety of their supply chain,"
says David Schwebel, MHI manager,
solutions and product groups at MHI.
"Consumer's demand fulfillment immediacy will steadily shift omnichannel
verticals into seeing a rise in smaller
transports, and that's where the distributed network comes in."
Historically, the dedicated internallyowned supply chain has been the most
efficient way of supplying products,
Schwebel says. It was centered around
"the full customer ordered pallet" and
maximizing the activity of objects in
motion-the entirety of train cars, the
round-trip transport lane or completely
"maxing out" the trailer space or weight.
"Except that now, the consumer has
been trained to 'think of it now, desire
it now, order it now and get it now,'" via
making purchases via their phones, he
says. They are especially ordering highly
divergent products-certain types,
quantities, sizes and even complementaries, which means that omnichannel
companies must invest in complex fulfillment systems and multimodal small
transport, to fulfill these complex orders.
"This creates a dynamic distributed
fulfillment network with more forwardreaching distribution centers, instead of
having all inventory stored in a centralized hub to be parceled out to retail,"
Schwebel says.
Case in point: A company has a
returns process using Big Data, or
aggregate forecasting, and Small Data,
or unique customer returns analytics.
Since the returning inventory is not even
necessarily in the original delivery or
shelving box, it is coming back in smaller
consumer sales units.

The company then starts breaking
open these returnable boxes and combining salable units in kits. Instead of
sending out original 32-count delivery
cases, the company is now sending out
customer or store-specific amounts that
are needed on the shelf, such as eight
units, and another eight to another store.
Another example comes from a strategy used by Sears: Each store is a mobile
inventory point within a region's network. Say, a store receives a full three
cases of a product, knowing there are
other local stores in the area that also
need the product but they only have
so much back room space. Then the
store who keeps the main inventory
uses couriers, whether Uber drivers, or
last mile logistics, or even store managers, to take product to the other stores
when necessary.

"This is a huge win because when a
company follows a 100 percent centralized inventory strategy, they could be
missing sales opportunities and lowering
customer satisfaction when their needs
aren't immediately met," Schwebel says.
Hyper-local warehouses are part of
omnichannel fulfillment, particularly
for large retailers, says Tom Rentschler,
vice president, marketing and business
development at MHI member Forte.
They need a single view of inventory
no matter where it resides-they want
to fulfill an order from anywhere within
their network.
"That's a state of play that all retailers
aspire to," Rentschler says. "I think there
are definitely some retailers that have
achieved true omnichannel fulfillment,
but the vast majority of companies have
not yet achieved it. Most retailers are

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MHI SolutIonS

81


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Table of Contents for the Digital Edition of MHI Solutions - Volume 4, Issue 3

CEO Update
Intelligent Robots Offer a Competitive Edge
3D Printing Will Disrupt Manufacturing as Adoption Rates Rise
Predictive Analytics
Sensors and the Industrial Internet of Things
Industry Focus: Consumer Electronics
Industry Report Released
2016 MHI Innovation Awards
The New Face of the Supply Chain?
2016 MHI Annual Conference Preview
Regional Supply Chain Education and Workforce Summits Raise Awareness of Industry, Opportunities
Economic Market Analysis
Safer Handling
Solutions Group Update
Fulfillment Update
Solutions Spotlight
Scholarship Winners: Where Are They Now?
MHI News
Calendar
Index of Advertisers
MHI Solutions - Volume 4, Issue 3 - cover1
MHI Solutions - Volume 4, Issue 3 - cover2
MHI Solutions - Volume 4, Issue 3 - 3
MHI Solutions - Volume 4, Issue 3 - 4
MHI Solutions - Volume 4, Issue 3 - 5
MHI Solutions - Volume 4, Issue 3 - 6
MHI Solutions - Volume 4, Issue 3 - CEO Update
MHI Solutions - Volume 4, Issue 3 - Intelligent Robots Offer a Competitive Edge
MHI Solutions - Volume 4, Issue 3 - 9
MHI Solutions - Volume 4, Issue 3 - 10
MHI Solutions - Volume 4, Issue 3 - 11
MHI Solutions - Volume 4, Issue 3 - 12
MHI Solutions - Volume 4, Issue 3 - 13
MHI Solutions - Volume 4, Issue 3 - 3D Printing Will Disrupt Manufacturing as Adoption Rates Rise
MHI Solutions - Volume 4, Issue 3 - 15
MHI Solutions - Volume 4, Issue 3 - 16
MHI Solutions - Volume 4, Issue 3 - 17
MHI Solutions - Volume 4, Issue 3 - 18
MHI Solutions - Volume 4, Issue 3 - 19
MHI Solutions - Volume 4, Issue 3 - Predictive Analytics
MHI Solutions - Volume 4, Issue 3 - 21
MHI Solutions - Volume 4, Issue 3 - 22
MHI Solutions - Volume 4, Issue 3 - 23
MHI Solutions - Volume 4, Issue 3 - Sensors and the Industrial Internet of Things
MHI Solutions - Volume 4, Issue 3 - 25
MHI Solutions - Volume 4, Issue 3 - 26
MHI Solutions - Volume 4, Issue 3 - 27
MHI Solutions - Volume 4, Issue 3 - 28
MHI Solutions - Volume 4, Issue 3 - 29
MHI Solutions - Volume 4, Issue 3 - Industry Focus: Consumer Electronics
MHI Solutions - Volume 4, Issue 3 - 31
MHI Solutions - Volume 4, Issue 3 - 32
MHI Solutions - Volume 4, Issue 3 - 33
MHI Solutions - Volume 4, Issue 3 - Industry Report Released
MHI Solutions - Volume 4, Issue 3 - 35
MHI Solutions - Volume 4, Issue 3 - 36
MHI Solutions - Volume 4, Issue 3 - 37
MHI Solutions - Volume 4, Issue 3 - 38
MHI Solutions - Volume 4, Issue 3 - 39
MHI Solutions - Volume 4, Issue 3 - 40
MHI Solutions - Volume 4, Issue 3 - 41
MHI Solutions - Volume 4, Issue 3 - 2016 MHI Innovation Awards
MHI Solutions - Volume 4, Issue 3 - 43
MHI Solutions - Volume 4, Issue 3 - 44
MHI Solutions - Volume 4, Issue 3 - 45
MHI Solutions - Volume 4, Issue 3 - 46
MHI Solutions - Volume 4, Issue 3 - 47
MHI Solutions - Volume 4, Issue 3 - The New Face of the Supply Chain?
MHI Solutions - Volume 4, Issue 3 - 49
MHI Solutions - Volume 4, Issue 3 - 50
MHI Solutions - Volume 4, Issue 3 - 51
MHI Solutions - Volume 4, Issue 3 - 52
MHI Solutions - Volume 4, Issue 3 - 53
MHI Solutions - Volume 4, Issue 3 - 54
MHI Solutions - Volume 4, Issue 3 - 55
MHI Solutions - Volume 4, Issue 3 - 56
MHI Solutions - Volume 4, Issue 3 - 57
MHI Solutions - Volume 4, Issue 3 - 2016 MHI Annual Conference Preview
MHI Solutions - Volume 4, Issue 3 - 59
MHI Solutions - Volume 4, Issue 3 - 60
MHI Solutions - Volume 4, Issue 3 - 61
MHI Solutions - Volume 4, Issue 3 - 62
MHI Solutions - Volume 4, Issue 3 - 63
MHI Solutions - Volume 4, Issue 3 - 64
MHI Solutions - Volume 4, Issue 3 - 65
MHI Solutions - Volume 4, Issue 3 - Regional Supply Chain Education and Workforce Summits Raise Awareness of Industry, Opportunities
MHI Solutions - Volume 4, Issue 3 - 67
MHI Solutions - Volume 4, Issue 3 - 68
MHI Solutions - Volume 4, Issue 3 - 69
MHI Solutions - Volume 4, Issue 3 - 70
MHI Solutions - Volume 4, Issue 3 - 71
MHI Solutions - Volume 4, Issue 3 - 72
MHI Solutions - Volume 4, Issue 3 - Economic Market Analysis
MHI Solutions - Volume 4, Issue 3 - 74
MHI Solutions - Volume 4, Issue 3 - Safer Handling
MHI Solutions - Volume 4, Issue 3 - 76
MHI Solutions - Volume 4, Issue 3 - 77
MHI Solutions - Volume 4, Issue 3 - Solutions Group Update
MHI Solutions - Volume 4, Issue 3 - 79
MHI Solutions - Volume 4, Issue 3 - 80
MHI Solutions - Volume 4, Issue 3 - Fulfillment Update
MHI Solutions - Volume 4, Issue 3 - 82
MHI Solutions - Volume 4, Issue 3 - 83
MHI Solutions - Volume 4, Issue 3 - 84
MHI Solutions - Volume 4, Issue 3 - Solutions Spotlight
MHI Solutions - Volume 4, Issue 3 - 86
MHI Solutions - Volume 4, Issue 3 - Scholarship Winners: Where Are They Now?
MHI Solutions - Volume 4, Issue 3 - 88
MHI Solutions - Volume 4, Issue 3 - MHI News
MHI Solutions - Volume 4, Issue 3 - 90
MHI Solutions - Volume 4, Issue 3 - 91
MHI Solutions - Volume 4, Issue 3 - 92
MHI Solutions - Volume 4, Issue 3 - 93
MHI Solutions - Volume 4, Issue 3 - 94
MHI Solutions - Volume 4, Issue 3 - 95
MHI Solutions - Volume 4, Issue 3 - 96
MHI Solutions - Volume 4, Issue 3 - Index of Advertisers
MHI Solutions - Volume 4, Issue 3 - 98
MHI Solutions - Volume 4, Issue 3 - cover3
MHI Solutions - Volume 4, Issue 3 - cover4
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