Retailers of all shapes and sizes have long been obsessed with the last mile processes of their supply chains and it’s not surprising that self-styled ‘innovative technologies’ like Alphabet’s drone fleet or autonomous last mile delivery bots often steal the eye-catching front pages headlines.
However, it’s important to remember that as pioneering as these advances might be, these technologies are only fulfilling a very small part of the overall product-consumer journey.
From ‘click-to-dispatch’, first mile represents the journey from the point at which a consumer places an order, to the time that it is picked, packed and dispatched, including every aspect of the supply chain process in-between that makes this process possible.
It is here in the first mile, not the last mile, where brands evolve to meet the shifting behaviours of their customers, can maximise inventory to increase the bottom line, and (crucially) ensure the well-being of employees and consumer alike during the pandemic.
These things do not simply happen however and adapting and evolving has historically often taken brands months and even years to affect change – not a luxury that has been afforded to any brand over the last six months.
Supply chain development cycles have traditionally required months and sometimes years of formal recommendations and studies. The last five months have seen a massive acceleration in these lag-times and the old adage that ‘crisis drives innovation’ has certainly played out, with many established brands adopting a more ‘start-up mentality’ and becoming much more agile in the decisions they’ve taken and the approaches they’ve rolled out.
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While the last six months has seen a number of challenges for retailers, two areas of key importance stand out, both of which are rooted in the first mile of the supply chain journey: warehouse operations and inventory.
First, the warehouse. Understanding people and product movement has traditionally been the primary indicator of warehouse performance and employee efficiency, but in the socially distance world of warehousing you need to rely more on your technology to help maintain the efficiency of the whole click-to-dispatch process.
Whether its limiting numbers of worker in specific zones; adhering to strict social distancing measures while in the workplace; closing smoking points and limiting the numbers of seats per table in the canteens; using swipe keys rather than touch screen key pads or increasing shift rotations to maintain picking efficiency and productivity, to avoid mental and physical health issues, the technology that operates a warehouse during the first mile of a product’s journey is key.
Secondly, inventory. Awareness and access are the cornerstones of where ‘the brand-consumer promise really starts. Essentially, it’s a simple concept – if you have got it, you should be able to sell it, no matter where in your supply chain that item is. However, in practical terms, this is far more complicated to achieve.
Open architecture IT, including cloud and microservices, as well as developments in AI and ML mean that you that can ingest more demand data, beyond simply historical trends to predict demands on retail supply chains. In turn, this means brands can be more effective in allocating inventory and rolling out new delivery models (like BOPIS or curb-side pickup), essentially rendering the need to invest further in complicated ERP deployments (that are often expensive, time consuming and inflexible), redundant.
While Coronavirus will not be with us forever, it’s impact will certainly have a significant and lasting effect on consumer behaviour which will filter down to business processes.
The pandemic has undoubtedly been a catalyst for change at a retail, business and societal level, yet we are by nature social creatures and people will always enjoy going to stores in some capacity. With consumers more inclined to be forgiving of brands during this period, now is the time to be bold and pilot new innovative approaches and agile process.
However, it is worth remembering that ‘innovative’ delivery methods and en vogue technology is no substitute for getting the basics right in warehouses and distribution centres – it is after all, still the first mile that will make or break the success of a brand promise to customers, not the last.
Craig Summers, UK Managing Director of Manhattan Associates