We have all watched as retail giants like Amazon and Walmart rule today's marketplace. They are continuously exceeding customer expectations, from offering endless aisles to speeding up delivery timeframes.
And as you probably heard, just a couple weeks ago Amazon teamed up with the U.S. Postal Service to offer Sunday delivery for Los Angeles and New York City (and will evolve to other cities soon). For the online final delivery process, moves like these can be game-changers. Similarly, over the last few weeks Walmart has begun to use its supercenters as cross docks, which allows the company to reduce the cost of the final delivery of products to smaller format stores.
I call companies like Amazon and Walmart the "Titans" of today's marketplace. My new video,Amazon and Walmart: Facing the Titans, explains how they are transforming business and innovating their supply chains at a rapid pace. They are creating tremendous disruptions, leaving the rest of us to play catch up.
Your company needs an effective strategy, an efficient supply chain structure, and an action plan for implementation that will meet or exceed the needs of your particular customers (think strategy-structure —implementation). A strategic counter-offensive is the only way to ensure that the titans do not defeat you.
The elements of a successful counter-offensive are divided into two categories: market-facing and supply chain-facing. Remember these five critical elements as you develop your counter-offensive:
Market-Facing
1. Omnichannel: It affects your processes, organization, and technology. Omnichannel is pervasive and changes the way you do business. Many people do not understand what it is, so remember that omnichannel needs to allow for the integration of a customer touch-point to create a seamless experience. Your omnichannel experience should delight the customer based on his or her personal preferences. Certainly, retailers need to offer a variety of delivery and pickup options to delight their customer's final delivery experience.
2. Store fulfillment: Store fulfillment is a portion of all brick and mortar retailers. When we really grasp store fulfillment, it changes the entire supply chain. You need to be picking the order in a fulfillment center (where stores can be one type of fulfillment center), delivering the product from the fulfillment center to the store, and then going from the store to the customer's home or allowing the customer to come to the store and pick the product up. You can learn more about the right fulfillment centers for e-commerce in this video.
3. Speed of delivery: This is obviously a key element for anyone in the online retail industry. You already know you need to deliver quickly, but as we see with Amazon and Walmart, there is a stratification of what people expect. I believe that in the top metropolitan statistical areas, customers are expecting same-day delivery. While in lower metropolitan statistical areas, they will be perfectly fine with next-day or two-day delivery. It is no longer about how you deliver the product to customers; instead, it is about how the customer chooses to have the product delivered. The final delivery options are varied, and customers expect seamless logistics in their shopping experiences regardless of the channel. This is the reality of today's evolving world of individual, personalized logistics.
Supply Chain-Facing
4. Planning - execution: In most organizations, planning and execution are separate. You need to be responsive and agile in your supply chain by not talking about planning "and" execution. Instead, think of them as a continuum. "Plan- execute" lies along a continuum, which leads to a continuous and driven synchronization where you can re-synch every time demand events occur.
5. Demand-driven value network: A supply chain is a network and a community. Develop a demand-driven value network that has the ability to address demand variability, supply variability, lead time variability, and constraints on capacity. This is a key element to your counter-offensive because it allows you to respond with greater customer satisfaction and greater revenue—all with less inventory.Click here to learn more about demand-driven value networks.
The time to develop your counter-offensive is right now. Amazon and Walmart: Facing the Titansprovides more tips and strategies for creating your counter-offensive.
Jim Tompkins is CEO of Tompkins International. He has written or contributed to more than 30 books, hosts the Global Supply Chain Podcast series, and writes the Supply Chain Excellence blog. Follow him on Twitter @jimtompkins or connect on LinkedIn. For more information, visit www.tompkinsinc.com or https://tompkinsventures.com/.
And as you probably heard, just a couple weeks ago Amazon teamed up with the U.S. Postal Service to offer Sunday delivery for Los Angeles and New York City (and will evolve to other cities soon). For the online final delivery process, moves like these can be game-changers. Similarly, over the last few weeks Walmart has begun to use its supercenters as cross docks, which allows the company to reduce the cost of the final delivery of products to smaller format stores.
I call companies like Amazon and Walmart the "Titans" of today's marketplace. My new video,Amazon and Walmart: Facing the Titans, explains how they are transforming business and innovating their supply chains at a rapid pace. They are creating tremendous disruptions, leaving the rest of us to play catch up.
Your company needs an effective strategy, an efficient supply chain structure, and an action plan for implementation that will meet or exceed the needs of your particular customers (think strategy-structure —implementation). A strategic counter-offensive is the only way to ensure that the titans do not defeat you.
The elements of a successful counter-offensive are divided into two categories: market-facing and supply chain-facing. Remember these five critical elements as you develop your counter-offensive:
Market-Facing
1. Omnichannel: It affects your processes, organization, and technology. Omnichannel is pervasive and changes the way you do business. Many people do not understand what it is, so remember that omnichannel needs to allow for the integration of a customer touch-point to create a seamless experience. Your omnichannel experience should delight the customer based on his or her personal preferences. Certainly, retailers need to offer a variety of delivery and pickup options to delight their customer's final delivery experience.
2. Store fulfillment: Store fulfillment is a portion of all brick and mortar retailers. When we really grasp store fulfillment, it changes the entire supply chain. You need to be picking the order in a fulfillment center (where stores can be one type of fulfillment center), delivering the product from the fulfillment center to the store, and then going from the store to the customer's home or allowing the customer to come to the store and pick the product up. You can learn more about the right fulfillment centers for e-commerce in this video.
3. Speed of delivery: This is obviously a key element for anyone in the online retail industry. You already know you need to deliver quickly, but as we see with Amazon and Walmart, there is a stratification of what people expect. I believe that in the top metropolitan statistical areas, customers are expecting same-day delivery. While in lower metropolitan statistical areas, they will be perfectly fine with next-day or two-day delivery. It is no longer about how you deliver the product to customers; instead, it is about how the customer chooses to have the product delivered. The final delivery options are varied, and customers expect seamless logistics in their shopping experiences regardless of the channel. This is the reality of today's evolving world of individual, personalized logistics.
Supply Chain-Facing
4. Planning - execution: In most organizations, planning and execution are separate. You need to be responsive and agile in your supply chain by not talking about planning "and" execution. Instead, think of them as a continuum. "Plan- execute" lies along a continuum, which leads to a continuous and driven synchronization where you can re-synch every time demand events occur.
5. Demand-driven value network: A supply chain is a network and a community. Develop a demand-driven value network that has the ability to address demand variability, supply variability, lead time variability, and constraints on capacity. This is a key element to your counter-offensive because it allows you to respond with greater customer satisfaction and greater revenue—all with less inventory.Click here to learn more about demand-driven value networks.
The time to develop your counter-offensive is right now. Amazon and Walmart: Facing the Titansprovides more tips and strategies for creating your counter-offensive.
Jim Tompkins is CEO of Tompkins International. He has written or contributed to more than 30 books, hosts the Global Supply Chain Podcast series, and writes the Supply Chain Excellence blog. Follow him on Twitter @jimtompkins or connect on LinkedIn. For more information, visit www.tompkinsinc.com or https://tompkinsventures.com/.
