By Spencer Green and Matt Jarratt
Cushman & Wakefield Logistics & Industrial Services
In case you missed it, MHI’s MODEX Show 2016 in Atlanta was a huge success and a cutting-edge experience for all who participated. We spent countless hours on the show floor engaging with dozens of exhibitors, vendors, and consultants too numerous to count – and attended multiple seminars daily in an effort to keep our minds sharp and eyes peeled for the supply chain industry’s evolving capability to support the engine of Ecommerce. We’ve consolidated a summary of our observations from the show and hope you enjoy! Be ready!
“People have no idea how fast things are changing.”
- It’s all about the consumer. – Can you make customers happy? The “Amazon Effect” is real, and it’s being felt by nearly every retail company. The process is evolving beyond the idea of “instant gratification” and now includes consistent “predictability” of the shopping experience – where products show up on our doorstep right when we need and expect them. Retailers everywhere are playing catchup in an attempt to claw back Amazon’s dominate market share. Jack Allen, Cisco’s Global Logistics Leader, emphasized this at MODEX pointing out to participants that most Amazon shoppers value the predictability and reliability of the shopping experience more so than price. This means companies that are truly competitive will find ways to increase their speed to market and precision to implement a supply chain focused on the customer experience.
- Start Gathering the right data; you’re going to need it. – Technology in the logistics industry is leading us to a world that would make the Jetsons look like the Flintstones. The advancements are remarkable, and it’s only going to progress. From the integration of cameras, scanners, health and body sensors, advanced robotics, to glasses that deliver a hands-free computer right in front of you, this is an historic era that will change the world forever. However, there is a Catch-22. In Jack Allen’s Presentation on “The Connected Supply Chain,” he pointed out that you can gather all the data in the world but, if you aren’t gathering the correct data and asking the right questions, the data is useless. So, don’t let your quest for data go un-strategized. In terms of timing, when is the right time to invest in data collection and synchronization, and hire managers capable of asking the right questions? Yesterday.
- Omni-Channel? How about the “New Retail?” – As consumers continue to dictate supply chains and as technology delivers what was once unimaginable data solutions, what does this mean for the physical facilities companies have invested in? Many companies are having success by consolidating facilities to work as one. “New Retail” is heading down the route of becoming one process and one workforce in one fulfillment engine, processing one inventory through multiple product flows. This is becoming the face of the new retail, where distribution and fulfillment operations are no longer silo oriented, but everything becomes about fulfillment, even to brick and mortar stores. Art Eldred of Vargo put it this way: “We’re not just distributing product; we’re manufacturing orders.”
- The war on talent isn’t just in the Silicon Valley. – Technology is definitely a major part of the future, but there is one asset that will always be No. 1 in any company, and that’s its people. For example, collocation of an Ecommerce facility near FedEx and UPS hubs will continue to get more and more difficult as companies fight fiercely over the local labor. Competition to recruit and retain employees continues to increase and, right now, the winner can change from month to month or even week to week. Peak seasons come with fury, and companies must find solutions to deliver customer satisfaction but, in order to do that, they need people. Successful companies will need a plan in place so that, when peak seasons hit, they aren’t uprooted by customer complaints and dissatisfaction. The plan will need to consist of the right technology and a strategy of cross-functional labor – alluding to the “one workforce” mentioned earlier. The real long-term winners will figure out how to integrate technology to reduce train-up periods and cross-train employees to stretch their labor across all seasons. Simply put, a successful workforce will “require flexibility and scalability” (Eric Lamphier, Manhattan Associates).
- Ready or not, massive change is on the way. – The old saying goes, “change is constant,” and that could not be more accurate in today’s world. Beyond that, those unwilling to change (or adapt fast enough) will be disrupted, maybe even extinct. And that might be sooner than you think. Industry disruption is real, and we’re seeing big-name brands fall to small startups that thrive on innovation, nimbleness, and their ability to think exponentially. Remember Kodak?
The logistics industry is “at the threshold of a massive change” (Jack Allen) and, in order to survive and thrive, you must “create a culture of experimenting.” (Peter Diamandis) Google kills 90% of their ideas, but the key is they learn from those failures and eventually those lessons learned instigate exponential change in their industry and in our world. “Watch. Experiment. Be Agile.” (Jack Allen) And don’t forget about the Kodaks of the world because “exponential-thinking companies are disrupting the linear thinking ones.” (Peter Diamandis)