ABefore we get into the kind of challenges they are facing, I think it is important to level-set on what we mean by
“flexibility” because I think everybody has a different view.
So, when I say “flexibility,” especially with regard to our
omnichannel retail partners, I would say they are looking
for both peak flexibility within the seasonal year-over-year
look and for flexibility in terms of business-dynamic changes. So, what happens if they add a new business unit or want
to take on a different kind of distribution node? I think it is
flexibility to do both of those things.
But to answer your direct question in
terms of challenges, I would say there are
two buckets that I’d put them in. There is a
strategic look on it, but also an operational
look. From an operational perspective, it
is always a question of automation versus
labor and what is that right mix and balance. So, I think the big challenges our
executives are facing are related to questions like: How do I support peak? And
how do I design a site that has the right
labor/automation mix to support both
peak and non-peak times?
I have a strong apparel and footwear
background. So, from a more strategic
view, I would say the customers we are
working with are really focused on this
seamless omnichannel experience. I think everybody that is
out there wants to delight their customers with a seamless
experience. I would say that is a big challenge that they’re
working to address.
Then I would say the last challenge, from a strategic point
of view, is a strategic alignment with their executive teams.
It’s really a matter of telling the story of what it means for
the company as a whole if I add these distribution capabilities and if I can service my customers faster. Telling that
story strategically and how it aligns with their goals is a big
challenge that we work through.
QYou just gave some good guidance on some starting points, but what are some of the concrete steps you’d
recommend to the typical customer?
AWe like to start with what we call a “value assessment.” Think of this as an entry point to what a business case
could be. If you work through these distribution initiatives
or add in certain capabilities, it is a good introductory
step to get a lot of key stakeholders aligned early on in the
process before you go down the line of working with a
company like Fortna for six or nine months—however long
one of these design engagements lasts. What are the goals?
What are the capabilities? You should really test the whole
value of what these new capabilities could [bring to] your
Then once we have a design and a plan in place, we do
a rigorous sensitivity-type analysis to understand it. What
happens if, let’s say, e-commerce volume actually goes
down and then traditional retail becomes more popular?
What if the channel mix changes or you add a new channel?
We feel that running those sensitivities on
the design is a really important step toward
overcoming a lot of those challenges.
Q It seems for a number of years now, so much thematically has been about how
much is changing and the accelerated pace
of change. Is it time for logistics and supply
chain executives to recognize the reality
that change is the new normal?
AI would agree that we live in times of change. I think customers are driving
that change. I think they continually want
to be challenged, delighted, and excited
about the experience that brands are bringing them. I don’t think that will be going
away anytime soon.
QSupply chain executives may recognize that they need to be doing all of these things, but they often don’t
know where to begin. How do they start down that path?
AThe advice I would give them would be to start with alignment within your organization. I do think what
makes or breaks a lot of projects are considerations like:
Does it meet your corporate goals? Have your key stakeholders—like your finance team, your merchandising team,
and all the other teams who are involved—bought in to
where they see that the supply chain can bring them value
and bring them to the future?
I would say that is something that’s really important as
you start this journey. We have seen a lot of design projects
go really far down the line only to fail to meet those goals
QSo, you need to figure out where you’re trying to go before you decide what path you’re going to take?
AYes, that’s exactly right. I would totally agree with that. n