Canadian Retailer Magazine | Digital Retail & Technology | Store Operations | Supply Chain & Logistics

Optimizing the supply chain for an enhanced customer experience

November 16, 2018
Optimizing the supply chain for an enhanced customer experience

Partnerships between retailers and their transportation and fulfillment providers helping to build efficiencies, lower costs and improve the overall customer experience

BY SEAN C. TARRY

CONSUMERS are evolving. Their needs, tastes and preferences are significantly different today than they were 10 years ago. And, due to a number of different factors, primarily the advent of various technologies including those that support e-commerce and the omnichannel retail experience, consumer expectations have also evolved. Today’s consumer craves ease, convenience, efficiency and speed. As such, retailers must up their game to provide them with the experiences they yearn.

In order to do this, retailers are looking to current and potential partners and building strong relationships with them. They’re working alongside them to optimize their supply chains for multi-node fulfillment models that include stores, distribution centres and drop ship locations; order management systems that are flexible and that help optimize inventory, efficiency and cost; as well as using data and innovations to better understand customers and improve the overall service experience.

Understanding impacts on the supply chain

The task seems like a monumental one. But, it doesn’t have to be, points out Matt Snyder, Vice President Fulfillment Operations Services at Radial Inc.—a leading provider of omnichannel transportation and fulfillment services. In fact, he suggests that the task is less daunting when a retailer can determine what the pressures on their supply chain are and the factors causing them.

“Customer expectations are evolving on an almost daily basis,” he says. “And there are two key dynamics driving the evolution. In general, today’s consumer has been trained to wait for specials and to buy during peak seasons. What we’re seeing, as a result, is more and more reliance from retailers on peak sales during a holiday season which creates a burst of demand for supply chains to have to scale and adapt to. The other piece is what many are calling the, ‘Amazon Effect’, in which people wants things faster and cheaper. They’ve raised the stakes around expectations when it comes to time of delivery. These two factors combined are posing a challenge to retailers. How do they best leverage their brick-and-mortar investments to fulfill those customer expectations without raising their inventory cost or increasing the transportation costs?”

A demanding consumer

Perhaps the most pressing of these factors is that today’s customers expect to receive the product they’ve ordered where and when they want it. The challenge for retailers is managing to put themselves into a supply chain that delivers against these expectations in a cost-effective way. Retailers can start on this path, explains Snyder, by looking at their entire network of stores and distribution centres as opportunities to fulfill inventory to those end customers.

“There are multiple paths in an omnichannel way to do that,” he says. “Retailers have a leg up on e-commerce giants like Amazon by having a local storefront in the consumer’s local market. Being able to leverage those brick-and-mortar investments, the stores and often the connections sales associates have with customers in the field is invaluable. The question is: how can they supplement that with a centralized inventory of goods to satisfy the customer who may want the product delivered to their home?”

Optimizing the chain

In an age when margins for retailers continue to be squeezed and cashflow is tight, it’s logical for retailers operating today to want to optimize their supply chains. It means having the right amount of inventory in the right place at the time the order comes through. And that, according to Snyder, is at the heart of what Radial does for its clients.

“When we work with our retail partners to do this, we first look at inventory plans and position the inventory in the most effective way across the network”, he said. “This then bridges into managing that order to ensure optimal fulfillment efficiency across the inventory at the time that order takes place. We’re big believers in lean thinking, which always starts with understanding the end consumer. Who are they? How do they perceive value when it comes to products and how those products are delivered? Once we understand these factors, we work with our clients to provide a set of network analyses in order to recommend how they should set up their inventory, perhaps in a threenode system, and where their inventory fulfillment points should be. Then it’s a matter of providing them with tools from our tech stack to most optimally route the orders across the network.”

The value of data

The company also possesses the expert capability to leverage advanced data analytics, which can serve to further inform their clients’ requirements with respect to their customer.

“We offer customer insights across the value chain, leveraging data points across the entire post-click portion of that customer contact. So, we’re often able to offer insights around the areas of opportunity, such as ways to reduce time in transit or reduce damage to product. This kind of information is valuable in driving changes upstream through the supply chain, creating greater efficiencies and improving the customer experience.”

As a company, Radial has a competitive advantage over others operating within the same space. With 22 fulfillment centres across North America, including one just outside of Toronto, it can provide clients with the full range of pick, pack and ship operations, including returns processing and a good number of value-added services, in addition to its range of transportation management solutions that provide full end-to-end service. But, what might be even more advantageous is Radial’s perspective when it comes to its relationship with clients.

“Our mission is to help our clients succeed,” says Snyder. “We really view ourselves as an extension of our clients’ brands. And the only way our partnership works is if our clients trust us. We know this and are always seeking to reinforce their trust in us through efficient execution, helping them meet their customers’ needs.”

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