Category Archives: eCommerce

Amazon moves into the Kombucha aisle in a big way

One day we might look back at June 16, 2017, as the day the retail and grocery business changed forever. It was, after all, the day Amazon decided to stop dipping its toes in brick and mortar retail and instead dive in head-first with the announced $13.7 billion acquisition of Whole Foods Market. While the news itself made a big splash with the public, the overall ripple effect could send waves of change across the industry for years to come.

Just take out the Citizens Banks!

The deal gives Amazon a network of 450 Whole Foods stores in the U.S., Canada, and United Kingdom, many of which are located in affluent neighborhoods and come with a loyal customer base willing to pay a premium for high-quality groceries. It also potentially extends the online retailer’s existing grocery service, Amazon Fresh into new markets while also broadening the assortment of products sold. And almost overnight, Amazon goes from a niche player to a national powerhouse in the $1.4 trillion grocery industry. Combined with Amazon’s well-established expertise in logistics, customer data, and pricing, Whole Foods could become a transformational force in brick-and-mortar as we know it.

So what does it all mean everyone else? Retailers and grocers continue to feel the pressure from shifting consumer habits, with many struggling just to stay relevant. Amazon’s new push into the physical world will likely add to the pressure. Here are five things to watch for as Amazon and Whole Foods move forward:

Flexible distribution

Your local Whole Foods likely won’t change into a massive Amazon warehouse and fulfillment center overnight. But there’s a good chance Amazon’s already thinking about how to leverage these strategically located stores (as well as Whole Foods’ existing network of distribution centers) to get products to customers faster and more efficiently than ever. Especially as the company looks to develop its Amazon Fresh service into a leader in the small, but growing online grocery space. Somewhere between Whole Foods’ in-store experience and Amazon Fresh’s online convenience lies the potential for great synergy – especially when it comes to giving more customers access to the whatever delivery method they prefer.

Experience matters

People don’t just buy products; they choose experiences. And the most successful retailers today understand that experience matters. Whole Foods is a long-time leader in bringing experiences to its stores. Whether it’s through in-store cafes, bakeries, cheese tastings, or coffee roasting, Whole Foods customers have come to expect an opportunity to see, taste, touch, and learn about many products before they buy them. That type of experience remains a tough solve for online-only food retailers. Whole Foods is an opportunity for Amazon to double-down on the ability for customers to experience new products and how to use them. Will it extend these experiences beyond just food products?

Fulfillment-plus

Jeff Bezos was one of the first to propose the idea of delivering orders to a physical location other than a customer’s home or office. Today Amazon Lockers are commonplace, giving customers a secure place to receive orders whenever and wherever it’s most convenient for them. Having an additional 450 Amazon-owned locations could extend the service even further, providing new real estate for deliveries, returns or other shipping services that can’t simply be provided in the back of a 7-Eleven. While there’s no public plans for Amazon shipping centers, it’s certainly within the realm of possibility.

An industry wake-up call

Amazon’s big jump into the grocery business splashes water on the faces of just about everyone else in the industry. Now it’s up to grocers to innovate and refresh their business models in order to stay afloat. Will it lead to traditional grocers adopting more online shopping and deliveries? Will they be able to compete on more than just price? Clearly, customers will choose the experience that suits them best. They ultimately vote with their wallets. It’s up to grocers to gain a better understanding of all the data behind customer interactions, to be able to match pricing and promotions to a customer’s preferences, and to create experiences that delight and reward shoppers for their loyalty.

The landscape is changing fast – don’t get left behind

It used to be that Amazon was the leader in online shopping and services and Walmart was the king of physical retail. But now Amazon is building bookstores and could soon have its own massive grocery chain, while Walmart gets more aggressive online. Somewhat lost in all the news about Amazon and Whole Foods was Walmart’s announced acquisition of online fashion brand, Bonobos – not to mention its recent purchase of Amazon competitor Jet.com. In their quest to be the primary destination for consumers of all walks of life, both Amazon and Walmart have begun aggressively stepping on each other’s turf.

It’s further evidence the lines have blurred between physical and online retail and there’s no single path to success. It’s no longer just about stores or about prices, delivery speed or convenience. Those who succeed will do so by finding the right mix of products, prices, and technology to surround the customer with consistent, seamless, personalized experiences.

Will drone-delivered, organic kombucha come next? Maybe not tomorrow. But all signs point to the dawning of a new age of retail. And it’s only just begun to get interesting.

Advertisements

Leave a comment

Filed under Current Events, eCommerce, Retail, Supply Chain

Your supply chain – not simply about cost control

I recently attending the WWD CEO apparel summit in New York City. The event brought together a number of executives from the fashion world from the likes of Dior to Neiman Marcus, as well as fashion superstars such as Ralph Lauren, Vera 1477496755713Wang, Joseph Abboud and Diane von Furstenberg. Other than a fabulous two days at the Pierre Hotel, I took away some key themes to the event. The main talking points:

  • Supply chains are for more than simply cost control. Supply chains have long been seen as centers to control cost, but they are finally starting to be recognized as tools of differentiation, tools that need to be leveraged to gain opportunities within the space. The CEO from Neiman Marcus highlighted as his top initiative the supply chain. Without an efficient and robust supply chain, all the efforts Neiman Marcus are making to redefine their stores and customer interactions will fall short. The supply chains must be increasingly nimble to meet the shifts within the retail world. As we pass through the omni channel stage of retail and evolve to a state of constant retail, or ambient commerce, the supply chain has to be nimbler and more flexible.
  • Stores aren’t dead, just being redefined. As mentioned above, the store is not dead. Far from it. Brands such as Neiman Marcus recognize that the physical store remains an essential cog in the retail universe. However, it is undergoing a transformation and will continue to undergo changes. From bringing beauty salons, restaurants or coffee shops the real estate footprint for fashion and retail. The question for these brands is how do they better manage their ability to fulfill. As stores change dynamics, what are the repercussions of the overall network’s strategy? Brands and retailers must become even more sensitive to how they manage their inventory positioning and fulfillment as their distribution footprint constantly shifts. The retail footprint is evolving, the store is being redefined and driving the overall retail experience. As was often stated at the conference – retail and fashion cannot view physical stores as separate from web commerce, but both must go hand in hand. All one had to do was listen to Hudson Bay and why they acquired mobile eCommerce darling, Gilt. Truly creating a full retail footprint.
  • Consumers are the queens and kings of fashion and retail. The consumer runs the show, according to the numbers presented by MasterCard, close to 70% of the purchases are made by a female buyer. That buyer is also becoming increasingly driven by experiences and driving the relationship. Clearly the consumer continues to grow in strength. She expects to have unique products available, experiences but does not necessarily want everything immediately. Consumers want to have visibility into when they can expect product, but do not necessarily expect it always right now. Retailers and the brands need to keep this in mind, while they need to be sensitive to their consumers’ wants and desires, they must balance the importance between experience, available inventory and meeting consumer needs.

Hearing the presentations from main stage as well as the hallway conversation reinforce the notions that retail continues to evolve, and at an unprecedented pace. While these changes are happening at a breath taking pace, the fundamentals around inventory, supply chains and the consumer must be kept in focus.

Leave a comment

Filed under Current Events, eCommerce, Retail

Back to School: the second happiest time of the year for retailers…but not necessarily for kids!

As the last days of summer come to lazy close—sigh—retailers and parents of school children should all be squealing with glee.  Okay maybe that’s an exaggeration, but the end of summer does mark the beginning of the retail race to the black. They are looking to beginning to build up their holiday season inventories while ensuring they capture as much back to school revenue as possible. However the back to school season is a microcosm of the shifting sands in the retail world.

Back to school is the second largest sales driver, right behind the end of year holidays – accounting for over $27b worth of sales.[1] But while this time of the year is a boon for retail, there are signs this rosy picture is cracking because of the usual disruptors.  Their disruptions come primarily in the form of growth in consumerization,[2] and the pressures from ecommerce giants such as Amazon.

Let’s dig into some NRF numbers:

  • 97% of online sites visited are either super centers or office supply sites.
  • 84% of parents will only purchase online if free shipping is offered.
  • Over a third of parents will make purchases online.

Retailers that are in this space are probably selling commodity items – a heavy percentage of office supplies. (Click here for an example list.)

These items are difficult to differentiate through value-added services, customization, or contextual experiences. They are often based on convenience and price, and are usually not overly bulky but can be heavy. Why is this important?

Consumers are going to shop for these products and look for value and cost to be the biggest drivers. This is in the sweet spot for the likes of Amazon and Jet.com. But could some of the items – like paper and books – place an additional strain on fulfillment for retailers? Possibly. What is the opportunity for retailers to thwart being overwhelmed by Amazon’s ecommerce prowess?

Here are some strategies:

  • Focus on an in-depth understanding of your network. Where can you hold back inventory? Can you fulfill from different nodes, and are there parts of your network that can push inventory out earlier in the process? Bring more flexibility to your distribution and fulfillment capacities to control your costs, but most importantly, retain customers through profitable fulfillment. As the data from NRF reminds retailers, consumers want and expect free shipping, how can retailers better leverage a network view of their inventory to address this trend.
  • Leverage the digital supply chain to focus on creating a user profile. Can retailers follow their customers as they progress from pre-K to college and beyond? This insight may open up opportunities to provide location-based value-added services. If a child is about to be a junior in high school, inform them of a local college prep program. Create some contextual wrappers around your inventory. Leverage the digital mirror to your supply chain to create stickiness to your brand. Hopefully this not allows for a degree of brand loyalty, but allows the retailer to do a better job with demand sensing and shaping.

Back to school can be stressful enough – as retailers let’s not have the added stress of how to continue to drive and capture revenue in a world of omnichannel and consumer-driven supply chains. There are opportunities to protect revenue but also uncover new opportunities; the retailers that start to think network and digital are pointed in the right direction.

[1] Data from NRF – https://nrf.com/news/infographic-look-back-school-supplies-lists-and-online-shopping

[2] Consumerization of the retail supply chain is the shift in dynamic towards the consumer. The consumer has become the focal point in the retail supply chain.

Leave a comment

Filed under Current Events, eCommerce, Supply Chain

After market supply chain – getting ready for prime time

A few months ago I wrote a piece of research that broached the after market supply chain. Click here for link. This topic continues to grow in importance, especially for retailers. Why? Primarily due to the continued growth of the consumer’s voice within the retail supply chain. The saying “the customer is always right” has taken on a whole new degree of importance. Whereas this statement was limited to a finite number of interactions between consumer and retailer, today this saying carries much more gravitas. Consumer’s have a greater awareness to a larger portion of the retailer supply chain, and with that awareness comes greater expectations. One area where retailers are starting to feel this impact is in the after sales supply chain. Consumers want choice returns.jpgnot only prior to the moment of truth, at the point of making a purchase, but also expect it post sales. The notion of “all sales are final” is rapidly becoming a dated concept. So what are retailers to do?

  • Make sure you have a strategy…okay this might seem too simple, but there are number of retailers ranging from Nordstrom to Target that offer free returns. In 2015, close to 50% of retailers offered these services, placing a massive strain on their cash flow statements. So have a plan. Providing free returns, just because the likes of Amazon and Zappos are doing it, does not necessarily make business sense for your business. Consider creating a tiered returns policies. Big spenders or loyal customers can qualify for free returns, other customers fall into different levels. Perform some ABC cost analysis on the entire supply chain – figure out the true costs. Because nothing is truly “free.” Then create a logical strategy strategy of how to deal with the reverse supply chain.
  • Can you turn the after sales into a strategic advantage? The after sales supply chain should be seen as an extension of your relationship with your customer. Returns are not a negative – the customer is not saying they don’t like your product – rather it is part of the customer journey. Can  you learn from why the customer returned the item? Is there something that you could alter to the process? How far back in the supply chain can you change procedures to ensure returns are lowered? And you can make returns another revenue opportunity? There are some retailers that seek to incentive customers to return in store, knowing that over 50% of these will convert on another purchase. Could retailers drive those numbers higher? Viewing after sales supply chain as part of your customers’ journey is crucial to unlocking some strategic opportunities with post sales supply chains.
  • Another data source – mine it! Why are consumers returning the product? Wrong size, color, style…the number of reasons is endless. Retailers need to embrace this level of data that could be ingested back into the supply chain. Can the product be redesigned? Is the marketing of the product not appropriate? Was there a better way to promote the item? Was the style just wrong? Retailers must embrace the data and information that the after sales supply chain can render. The ability to take the information, processes it quickly and render better decisions based on this information could prove to be a data lake worth swimming in.
  • Don’t hesitate to lean on your solution providers to offer solutions. One theme I saw at NRF was some innovative thinking about how to handle the after sales supply chain. From software players such as JDA and IBM to service providers such as Wipro. Retailers shouldn’t hesitate to look their existing service and solution providers to assist with this journey. Don’t be shy about expecting your software and service providers to become a true partner when it comes to handling the post sales supply chain.

The after sales supply chain is evolving beyond being a cost center and a “nuisance” to retailers. It is part of the consumer journey and consumer expectations. Retailers, service providers and software vendors all have an opportunity in the after sales supply chain. Consumers are already there expecting better post sales service, it is up to the savvy retailers to meet those expectations.

Leave a comment

Filed under eCommerce, Retail, Supply Chain

Digital disruption on verge of taking out historic retailer

The 94 year old retailer, Radio Shack, is on the verge of no longer being in existence. Sad, but another example of digital disruption in the retail supply chain. Radio Shack was one of the leading retailers when it came to cutting edge electronics. I remember as a kid going there to get a new tape recorder (yup I played my first Van Halen cassette, 1984, on a tape recorder from Radio Shack) or when cordless phones came out, Radio Shack was the go to place to acquire such technological marvels. There is a picture circulating around social media about all the technologies you could have at Radio Shack in the 1990s…that are all now contained in that device we carry in our pockets – the smart phone (see below). Talk about digital disruption.

As the rise of Amazon took place in the 1990s, electronics being sold more widely and consumers becoming more digitally savvy, Radio Shack found itself in a difficult situation. The store’s footprint was too small to carry the wide array of SKUs that a Best Buy or Circuit City could (not that is necessarily a long term advantage as the latter is out of business and the former struggling) and it could not compete with the online force that Amazon had become nor the discounting that the likes of Target and WalMart offered. Not a great place to be for Radio Shack.

Everything on this page is now in your smart phone...talk about digital disruption

Everything on this page is now in your smart phone…talk about digital disruption

So now the stories are that Sprint may take on or co-brand some locations. Makes sense for the telecom giant as they look to increase their reach with their brick and mortar stores. Unlike Radio Shack, Sprint only needs to carry a very focused and smaller inventory – just mobile phones and tablets. Wireless providers like Sprint and AT&T benefit from having some brick and mortar for sales but also lean on them for service and customer support. The more intriguing option is the one where Amazon would swoop in and purchase some locations. Interesting.

This comes on the heels of Amazon opening their first brick and mortar store, something I wrote about a while back, click here for post. Does this make sense for Amazon? Some are pointing out that Amazon could use these stores to showcase products. Not sure I agree with that. Amazon already has that…it is called Barnes and Nobles, Target, Best Buy, REI, Toys R Us, Dicks Sporting Goods, Home Depot etc…why would they add a cost layer to get something they already have? They could use the locations for pick up and returns. Hmmm, that I might see as a more viable option. Radio Shack stores have an average of 2,426 square feet, a little bigger but similar footprint to UPS stores. UPS stores range from 800 to 1800 square feet. The Amazon/Radio Shack stores could provide similar services: receiving and holding orders or processing returns. With this level of service, Amazon would not have to worry about carrying SKUs at these locations nor having a large staff to manage need to manage the retail aspect. Could they also act as smaller distribution centers (DCs)? Why not. As Amazon is also looking to expand their own transportation fleet – in such deliveries as grocery – these smaller outlets could also be staging areas for some inventory. They may even have their own drone delivery assets at each physical location. Don’t laugh too loud, this might be closer then we think!

One topic we are covering in 2015 is the transformation of the consumers’ home into an extension of the retailer. Amazon moving into Radio Shack locations would allow the online giant to move in this direction. It could give users of such services as Zappos who are used to getting multiple sizes and colors delivered to their home to try on and then return, an alternative channel from which they can return their items. This move might allow Amazon to get a little bit closer to their consumers.

Leave a comment

Filed under Current Events, Drones, eCommerce, Retail, Supply Chain

Not your father’s POS system

Here is something to tickle your retail supply chain – we are under 50 days until Christmas. Avoiding the debate over the mass commercialization of the holidays, the reality is that consumers will, or already have, started their shopping engines. With so many retailers dependent on good holiday sales, for example Lego moves 50% of their sales between Thanksgiving and Christmas, the ability to properly capture orders is vital.

The POS (point of sale) systems, whether in brick and mortar or on line, are the vital touch point between the consumer and the commerce supply chain. Like with the majority of technologies, this has been impacted by the digital old-fashioned-cash-register-isomorphic-viewwave. POS systems are not longer limited to the larger systems synonymous with the corner store – remember the ones where numbers would pop up once the large typewriter like buttons were pressed. These systems have evolved into a new range of sleek mobile devices, and those large legacy systems are now smarter. POS systems are also getting into greater areas and increasing their reach – supply chains need to craft strategies about how to take advantage of the new data as well as the new places POS systems will pop up.

For example:

  • The POS systems in the air. Those us that have been flying long enough remember the days when we were served a meal and drinks as part of our overall plane ticket. Today if you want a scotch on the rocks and a can of Pringles, you need to pay for these items. Airlines have put mobile POS devices in the hands of their staff to take your payment. Rather than just using these as order taking machines, airlines like Delta Airlines have made these mobile devices a much more valuable part of their supply chain. Beyond just taking payments, the mobile devices are enabled to communicate about customer and maintenance issues. So if the passenger in seat 7a voices a legitimate complaint, Delta employees can use the POS system to give that passenger 10,000 miles. If a seat is found to be broken or an overhead can’t open, the flight attendants can use the system to communicate the problem and location to the destination airport and schedule the appropriate maintenance.
  • Infusing retail into other entertainment channels. We have all used to having to walk through the store when we leave a museum, zoo, aquarium or other attraction. But what about the movies? Get ready for your phone to become part of a POS system for the movie theater. I am not speaking of the POS when you are ordering your over-sized tub of popcorn, but post movie viewing. For example – you go see the Transformer movie, once the movie is over as you are leaving the theater there are QR codes on promotional posters at the exit and even pop up kiosks where you can scan your phone to find where to get the latest Transformer toy. There could potentially be a 3D printer right there allowing you to get your item made in place. If you scan the product at the movie theater you may be given a discount – incentive consumer to make transaction at that point. Your portable POS systems – aka your smart phone – will have an app that allows for this to happen and could also communicate with the closest Target, WalMart or other retail channel that carries the item. Or even tie back to Amazon and have the eCommerce giant dispatch your item immediately.

Of course there remains a continued evolution in mobile POS, companies like Square and Apple are allowing anyone with a tablet and connectivity to run mobile POS systems. Retailers can start looking at these mobile POS systems as great data sources – where do most of the transactions happen on the store floor? Are there still locations for impulse purchase displays? Can you tie these mobile terminals into the inventory systems? A prospective buyer is looking for a specific piece of cookware at William Sonoma. The item is there but the consumer wants it in sky blue. Using the mobile terminal the associate helping that consumer can instantly scan the inventory at different stores, identify where an item can be secured and ship directly to the store or to the consumer. The mobile device should also be able to pull up the consumer’s profile: are they a loyal shopper? If so the associate should have the ability to waive shipping costs or expedite the product.

Supply chains need to think of their POS systems as Point of Service, not sales. In a world of Matrix Commerce, these are the intersection points between the consumer and the commerce supply chain where the digital reality has great impact. How companies take advantage of this will determine who leads and who is a laggard.

 

1 Comment

Filed under eCommerce, Mobile payment, QR Code, Retail, Supply Chain, Tablet, Wireless

Oracle OpenWorld 2014 – focus on the decision makers to empower your supply chain

I just returned from a successful week spent at Oracle OpenWorld in San Francisco. A nice perk for being in the Bay Area at this time of the year was summer was in full swing! While it was raining buckets back in Boston, I was enjoying the close to 90-degree sunny weather…as I ran between meetings. The conference revolved around Oracle’s push into the cloud, talk of the importance of mobility, smarter access to big data and the demotion of Larry Ellison to CTO…okay the last item was some good humored self deprecation from Mr. Ellison himself while on stage for his keynote Tuesday. He even apologized for missing last year’s main

Not a bad trophy to have at your event...

Not a bad trophy to have at your event…

stage demo since he had been pulled into watching some boat race. Anyways, the area I was focused on was what Oracle was doing in the supply chain and retail/CPG spaces. Oracle did not disappoint with the large number of sessions dedicated to these spaces. So let’s look at 3 things I took away from both the CPG/Retail sessions and the Supply Chain sessions –

The shift in power in the CPG-Retail spaces means a change in how we address it:

  • In the retail space Oracle discussed a persona-based approach for their offerings. Clearly traditional retail sub segments are not behaving the way they once did – the customer persona is becoming the driving force not the retail sub vertical. Retailers need to approach personas when it comes to how they best address the consumer need. It is the consumer that will dictate what the rules are. The retailer, with help from their service providers, need to focus on addressing the different personas they are servicing and build the software and solutions around this. This is what we are seeing with Matrix Commerce – as the number of intersections between the consumer and commerce supply chain grows, so does the need for the solution vendors to offer more nimble solutions. Oracle provided an example of how they could work with retailers to equip the retailer with an enhanced view of the customer. They designed a system that allowed the retailer to associate a persona to the way the consumer interacted with the retailer – pulling information from all possible channels. Allowing the retailer to more effectively address the consumers’ needs. Oracle Retail, staying true to what was being discussed on main stage, highlighted the fact the solution had a mobile aspect. Why is this important other than following the buzz? It places the information and analytics in the hands of those working on the retail floor. The mobile delivery of data and analytics means the people at the store level can make better decisions and service the customer in a much more personalized and effective manner. Getting the information closer to the decision makers.
  • We are all aware that consumer influence has increased vis-à-vis retailers and CPGs. Oracle highlighted how their solutions are helping CPG companies to be even more efficient and effective in their relationship with the retail channels. Once again it boils down to focusing on better usage of retailer data and the subsequent enhanced collaboration that allows an effective partnership between CPGs and their retailers to meet increasingly savvy consumer requirements. Sony discussed working with Oracle to overhaul their managing of sales and promotions for their PlayStation products and how it was sold through retail channels such as Wal Mart, Gamestop, Target, Amazon and Best Buy. At the core Sony and Oracle worked to harmonize and ensure they had the most reliable data and a system of record from which to build upon. From this they worked on putting together an S&OP process that allowed for Sony to do greater analysis of the insights they were getting from the retailers and how Sony could do a more cost effective and smarter job in marketing and selling the PlayStation. Sony was able to look across all their channels, coupled with other sources of data, to improve their planning cycles for the PlayStation. As they stated – they have a very large competitor, with very deep pockets…so Sony has to do it smarter and more efficiently. Focusing on the fundamental blocking and tackling with the help of Oracle gives Sony a competitive edge in the space.
  • Finally, and this was something I heard through many of the sessions for CPG and retail, but there is a real emphasis on how to take advantage of the confluence of mobile – big data – analytics – cloud and focusing on how to drive down more intelligence closer to consumer touch points. This is really about empowering all the players that are close to the consumer, the best data and analytics to make the right decision on the ground. Think about it, you and I as consumers have gained tremendous power in the past decade. Between the transparency the internet has given us to the ability to carry that internet everywhere we go – we as consumers have suddenly put intelligence and insight right into our purses and pockets. The Oracle solutions targeting CPG and Retailers are looking to give the same level of intelligence to the store associates servicing these smarter consumers. The reality is the large systems used to drive CPG and Retail businesses are vital for running the businesses at a macro level. But the trick is how to empower those that are “on the front lines” to have a similar impact on the process.

The overarching theme for CPG and retail was to provide the complete end-to-end solution and platform that will allow for this transformation. Overall they touched many aspects of what we are seeing in Matrix Commerce. The ability to push data and analytics down to the closest touch point of the consumer is vital to reducing the friction that often flares up at those levels.

Supply chain continues to be about better planning…but also easier access to improved execution

  • My kingdom for a better plan! Clearly planning remains at the heart of supply chain…really at the heart of business and dare I say life? Yet for some reason it has a bad connotation at times. Yes we all know that all plans carry one similar trait: they are WRONG. But the reality is we really cannot do much without those plans. What was interesting in the discussions of planning was not that Oracle was professing a 99.9% accurate plan, or a faster plan but looking at offering a more responsive planning method. Since being responsive is different that being efficient. Again pulling on the themes of big data – cloud – analytics, they discussed continuing to work on their planning engines that are digging deeper into the data as well as making them more accessible within the planning organization. Panasonic Avionics (they are the division of Panasonic that builds and maintains many of the in flight entertainment units you may leverage when you are flying) for example, has a very challenging supply chain to service. With long component lead times, capacity constraints, high demand volatility and a large array of materials to service (they mentioned that they still need to support some systems that use video tapes!), Panasonic Avionics really needed a system that was able to rapidly identify where the plan would impact the product. In order to properly achieve this, Panasonic and Oracle needed to ensure the planning engine could truly understand the complexity of the BOM and identify where each part of that BOM could be impacted by any fluctuation in the plan. They highlighted the ability to improve the granularity of the information being pulled into the planning process, as well as the ability to run multiple plans to provide the most robust scenarios. The speed at which Panasonic Avionics was able to refresh their plans allowed for rapid insights into potential issues.
  • Embracing the cloud – but not just for lower TCO and faster implementations. Like many vendors, dare I say most vendors; there was a strong message around putting solutions up in the cloud. Good. I agree with this thinking. What I also agree with, and what Oracle made clear was this does not mean you have to ignore continuing to offer on-premise solutions. When I sat through a session on Oracle’s transportation and global trade solutions being moved into a cloud offering, what was refreshing was the fact that they made a point to discuss continuing to offer the solution on premise. And that both would maintain the same high level of functionality. The same was true for the discussion around supply chain planning functionality and its migration to the cloud. What was evident was that Oracle seems to grasp the notion that while the cloud is important; it does not prevent them from continuing to offer and support on-premise offerings. I do think that the strategy to give a choice is important and will allow them to target mid-market and individual business units in larger enterprises. Long gone are the days of massive system overhauls and implementations. Supply chains need nimble solutions to keep up with their ever-changing environment.
  • Making supply chain solutions even more business friendly. Let’s face it, when it comes to the supply chain function within business, it is still fighting for a place at the big table. Yes we hear of more companies with CSCOs, but I would still wager that number is small compared to CMOs, CFOs, CIOs and yes CEOs. But my last take away from the supply chain discussions is the way Oracle appears to be addressing this issue. For example, they spoke of better tying in what is happening in the supply chain to the marketing side of the house. The solutions stressed the need to drive analytics and better information down the planning stack – get as much rich information where it matters. Decoupling the financial flow from the physical supply chain to better understand how the two interact. Individually these are all nice efforts, but put together they indicate a view of the importance of the holistic supply chain – one that starts on a solid platform where the right data is leveraged. This mirrors what was spoken about on main stage Tuesday, and the overall drive by Oracle to ensure cross channel and cross identity customer experience. How true that is at the core of supply chain – being able to ensure the best view of the customer’s needs and orders.

Oracle’s overall Value Chain solutions are all rowing in the right direction. When you add to the discussion the continuing evolution of Oracle’s Warehouse Management solution that has added Yard management – clients have the ability to access a full suite of execution modules. When it comes to Matrix Commerce, one key need for the commerce supply chain is to ensure the elimination of friction, friction that arises from supply chain blind spots. Not having the full view of your fulfillment can cause supply chain blind spots to sprout.

Oracle continues to maintain its status as a “mega vendor.” Their breadth and depth in terms of solutions and industries make them a serious contender in most situations on the market. We will continue to watch with intent how they address the area.

Leave a comment

Filed under Consumer Product Goods, Current Events, eCommerce, Retail, Supply Chain