Real Virtual Venture
By Staff -- Modern Materials Handling, 12/1/1999
Flexibility and diversity are key words in the professional vocabulary and daily activities of Steve McAlexander, vice president and chief logistics officer, Borders Group, Ann Arbor, Mich. Manager of a workforce of 2,200, he faces the challenges of meshing together two distribution/ logistics strategies: One is for an emerging, Internet-based business that sells books online. One is for the bricks and mortar side of the books and periodicals retailer's business.Distribution for any online business faces challenges, McAlexander says. One is maintaining very high order accuracy." You only get one chance, maybe two, to retain each customer," pointing to the consequences of a mistake on an order.
McAlexander also must keep a wary eye on possible future trends: Books printed on demand, for example, which require no inventory-only delivery to the customer from the point of printing. Although in its infancy, this service can be provided by several companies already. There's also the future possibility of selling electronic books, downloaded and read on screen through some device. Again, there's no inventory to stock in advance of the sale.
For the book publishing industry, a shift to "virtual inventory" of these kinds isn't all that imminent. Readers-particularly those of art and science books-like the look and feel of a book in their hands. But the possibility, McAlexander suggests, reinforces the notion of always maintaining "a supply chain flexible to technological change."
Online book sales are "a small but fast growing part of Borders Group's business," McAlexander says. "But we're not a pure player like our competitors getting all the media attention," he notes.
So he juggles the logistics of Web orders and orders for the more conventional book retailing side with 290 Borders stores and 990 Walden stores. They're numbers are growing, too.
For web sales, an order fulfillment center runs around the clock, seven days a week picking orders among 750,000 titles stocked. Besides accuracy, speed in picking and high-velocity throughput are critical.
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