Art Eldred

How e-Commerce is Reshaping Supply Chains
Franklin B
How E-Commerce is Reshaping Supply Chains
Art Eldred
Client Executive, System Engineering
Why the resurgence on
Omnichannel?
Every dollar spent online
influences $5.77 spent in the
store over the next 10 days
Terry Lundgren, CEO
Macy’s
Evolution of the Consumer
1970
1975
1980
1985
1990
1995
2000
2005
2010
2014
Evolution of Retail & eCommerce
Supplier
Distribution Center DC
Retail Store
Supplier
Supplier
Distribution Center DC
Fulfillment Center FC
Retail Store
Home
Home
Supplier
Omnichannel DC
Retail Store
Distribution Growth & Fulfillment
Service Needs
Fulfillment Center Service Needs
Distribution Center Growth
1
6
2
3
4
Source: U.S. Census Bureau
5
Source: UPS
What does Omni-channel really
mean to the distribution center?
Definitions vary, but for purposes of this seminar,
we'll use the term to refer to a retailers' efforts to
integrate their store and e-commerce selling
channels to work seamlessly together inside the
fours walls of a single distribution center.
 One Inventory
 One Fulfillment Engine
 Multiple Order & Product Flows
Current State
What are the benefits of one
Omnichannel DC?
•
•
•
•
Speed to Market
Labor
Profit
Infrastructure
–
–
–
–
Inventory
Systems
Facilities
Administration
SPEED
LIMIT
AS FAST
AS YOU
CAN!
Combined Order Profile
DTC
Retail
Challenges
• One Inventory
• Information
Systems
• Product
Configurations
• Current
Infrastructure
Information Systems Challenges
ERP,
Management,
eCommerce
ERP &
Order Management
ERP,Order
Order
Management,
eCommerce
Order
Management
ERP
Warehouse
Management
System
Intelligent
Warehouse
Control
System
WMS
Retail
WMS
eCommerce
WMS
LMS
LMS
TMS
TMS
Intelligent WCS
Order & Inventory Intelligence w/Ability to Balance Work
Across Both Machines and People for All Channels
WORK PULLED TO AVAILABLE PEOPLE & MACHINES
Put to
Store
Put to
Store
WCS
Item
WCS
Sorter
Item
Sorter
Pick to
Light
Pick to
Light
WCS
Shipping
WCS
Sorter
Shipping
Sorter
Label
Case Pick
Print
Label
Applicator
Case Pick
Print
Applicator
Inventory Challenges
Receive
Store
Ship
Fulfillment
VAS Processing
Storage Challenges
Velocity Based Slotting
Reserve
VS
All Active
Pre-Omni Order Processing
eCommerce
ORDER POOL
Retail
ORDER POOL
8AM – 10PM
Retail
Wave #5
Ecom Ecom
Order Order
Store 7-14
Retail
Wave #4
Retail
Wave #3
eCom Expedited
Wave #2
Stores 15-24
Order Cut-Off
Stores 1-6
24 Hrs- After 6PM Heaviest
Retail
Wave #1
Shipping
Cut-Off
Omnichannel Processing Engine
COMMON
ORDER POOL
Store 1
Pieces 1-50
Ecom Ecom
Order Order
Store 2
Pieces 50-76
B2C Orders
Ecom Expedited
Order
“Wave-less” Continuous Processing
Order Cut-Off
Retail Orders
Shipping
Cut-Off
Ideal World
What if we combine our
ecommerce & retail
fulfillment operations?
Real Benefits
• Reduce Capital
– Buildings
– Automation
– Infrastructures
• Reduce OPEX
– Inventory
– Labor
– Facilities
•
Flexibility
– Dynamically react to product flow
•
Higher Margins
–
Inventory can Match the Demand
Omni-channel is here to Stay
“It works. There is real ROI in these projects.”
-Mark Seigel, EVP, Ann Inc.
“Macy’s omni-channel strategy is one of three key strategies driving its success”
-Karen Hoguet, CFO, Macys
“Approximately 50 percent of our sales involve online research at some point in
the shopping process. And another key fact is that almost one in every four store
shoppers have previously been on homedepot.com before purchasing in our store.
It’s for this reason that we have dropped the ‘e’ off of e-commerce.”
-Hal Lawton, President, The Home Depot Online Business
Source: Logistics Viewpoints
How E-Commerce is Reshaping Supply Chains
Panel Discussion/ Q &A
Panel Facilitator:
• Art Eldred/ Client Executive, System Engineering
Panelists:
• Pattiann McAdams-Russell, CEO, 2DecadesDigital, LLC, (former
GM/SVP with Bath & Body Works Direct), Columbus, OH
• Andrew Norris, Marketing Segment Manager, UPS, Columbus, OH
• Steve Reade, Director, Distribution Services, DSW Inc., Columbus, OH

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