Bob Trebilcock

The retail supply chain revisited
September 29, 2008

Retailers have been a major catalyst behind the growth of the materials handling and supply chain software markets in recent years. It’s no coincidence, for instance, that RedPrairie and HighJump Sofware both grew their product suites by focusing on the link between the distribution center, field service, and the retail store.

Given the slowdown in the economy, what’s happening in retail distribution today? To get the answer, I spoke to Ken Mullen, a senior director at enVista, a technology and systems integrator with a core industry focus in retail.

While there is no question that some retailers are pulling in their reins, Mullen says that those that are investing and expanding are looking for ways to integrate their various sales channels into one distribution center.

“Most retailers have taken on different business channels, including catalogs and e-commerce,” says Mullen. “Since it’s not going to their stores, the trend had been to create a separate warehouse and do direct-to-consumer business as a separate business.”

While that makes sense, it’s also inefficient. Some retailers have tried to incorporate both processes in one facility by picking pallet and case orders for stores at the beginning of the day, and piece picking for direct-to-consumer orders at the end of the day. While that eliminates the need for two facilities, it also requires a facility to divide and conquer its resources. “Picking eaches creates a challenge for retailers not used to the pick and pack model,” says Mullen. “You need a flow that supports replenishment and picking at all unit levels at the same time.”  

At Modern, we’ve come across this at a couple of facilities, including American Eagle’s distribution center in Ottawa, Ks., and Gardner Denver’s manufacturing plant in Sedalia, Mo.

Mullen adds that some forward thinking retailers are adopting new order fulfillment software solutions, combined with automated materials handling and data collection, to bring both processes together. “This is very much an emerging space,” says Mullen. “But it’s becoming more prevalent as the economy drives companies in this space to run their distribution centers more efficiently and more cost-effectively. I think we’re going to see more of it.”

Posted by Bob Trebilcock on September 29, 2008 | Comments (2)