Canadian Retailer - The Supply Chain & Logistics Issue - 32

PARTNERSHIPS

CR: This summer, SCI published
a piece on the top trends affecting the supply chain investment
strategies of Canadian retailers,
from now into 2018. The piece
said that retailers need the infrastructure to react quickly, and
that "there is a short window for
businesses to either innovate or
evaporate." It sounds ominous.

CR: So, the big
challenge?

Sharpe: Most retailers have a supply chain designed to manage a
store network, with pallets going through. If you want to respond to
the e-commerce opportunities your supply chain will be dramatically
different. The business of picking items instead of pallets is different.
You have to have the ability to scale up and down very efficiently.
Cleveland: A physical supply chain is about moving as
many things as you can in and out of a space as quickly
as you can. With online, you're focused on an individual
person's needs as opposed to the market's needs.

Cleveland: How do you get to
the point where you can pick
one item efficiently?

CR: Scalability was raised. Busy periods can strain order fulfilment and
distribution channels. So how quickly
can you scale up the key areas of your
supply chain?

Sharpe: And it's not a matter of just devoting
a portion of your warehouse to e-commerce.

Sharpe: We get into discussions with people who don't think
they'll be able to do e-commerce effectively. Some of the things
that 3PL [third-party logistics] does extremely well is staffing up
and staffing down, and investing in automation.

CR: How should retailers work with partners to enhance supply chain performance?
Cleveland: That's a critical element. Your delivery partners need to be more than a
transportation outfit. They need to understand what you stand for as a brand.

CR: So, to consumers, the product and the supply
chain can be intertwined?
Cleveland: If you can't deliver, you hurt your brand. What's
different is the frequency with which consumers make up
and change their minds. Retailers need to partner with
people who aren't going to break their promise.
Sharpe: The concept is to maintain the full integrity of the
product throughout the supply chain. We're also in an era where
products that haven't been designed to be shipped direct-toconsumer are being shipped, like things that are expensive and
fragile and difficult to move. You need to have trust built into the
supply chain to ensure that the product gets to the customer in a
way that's reflective of your brand.

32 |

CANADIAN RETAILER

| THE SUPPLY CHAIN & LOGISTICS ISSUE

CR: How might retailers
work together to improve
their supply management?
Sharpe: I used to work in
healthcare. A consortium of
pharmaceutical manufacturers
acted as wholesaler for hospitals. You could order different
products on the same bill,
rather than pay for products
and transportation separately.
Think about it, that's the Amazon advantage. That's where
we can see more collaboration.

Table of Contents for the Digital Edition of Canadian Retailer - The Supply Chain & Logistics Issue