By Dave Rodgerson, Retail Industry Solutions Executive, Microsoft Canada
The first time I saw them dance, it was in New York. They looked so cool, turning and spinning as they flew across the floor of the show. They moved quickly, with a choreography that defied reason, yet every move was precise. But this wasn’t an avant-garde ballet in a trendy art house. These were warehouse robots from Kiva Systems on the floor of the National Retail Federation “Big Show” which draws an audience of more than 30,000 industry insiders each January. Amazon was impressed… they bought Kiva in 2014 and now you’ll find them in Retail warehouses around the world.
Managing the logistics function of a warehouse and distribution network may seem almost industrial at times. Schedules, load optimization and cross-dock handling seem far removed from the luxury showrooms of Saks and Nordstrom, but they are critical functions for any retailer. There was a time when these operations were managed with manual processes and calculations. Today, the volume and complexity of this function requires a more sophisticated approach. Predictive analytics and machine learning are just as valuable as variations in fuel costs. To meet these challenges, companies like Rubikloud have developed analytic tools that leverage machine learning to juggle all of this information to help manage forecasting accuracy, reduce stock out situations and save man hours.
Another area that’s having an impact on logistic solutions is the Internet of Things (IoT). Being able to connect devices attached to everything from ships, trucks and pallets has provided incredible access to information throughout the supply chain. It’s now possible to track and measure everything from temperature and humidity of produce to the real-time location of your truck fleet. These things allow a retailer to optimize their operational costs and be more efficient in the way they bring their goods to market.
I spoke with Gary Newbury, a subject matter expert in Last Mile Fulfillment and Retail Logistics about this evolution. He commented that “the biggest two challenges for any retailer is having full visibility of exactly where each item is within the supply network extending back into each supplier, and dealing with a mix of both pallet handling for stores and single item picking, supporting individual customer orders, cost effectively”.
All this technology requires a new way to manage the information. While there are some notable exceptions, most retailers are very reluctant to build a massive data centre where the information is processed and stored. The capital expense is just too great. The other aspect to consider is that the computing power and speed required to handle the analytics, forecasting and reporting, exceeds the capabilities of a traditional data centre. Companies are now looking to Cloud solutions that can be scaled up to match their seasonal peaks. That evolution has sparked a whole new issue for retailers. AWS (Amazon Web Service) is a Cloud offering that is readily available for retailers. The issue that the retailer face is that they look at Amazon as the competition, so they find it difficult to partner with them by using their Cloud service.
Logistics may not be one of the most glamorous parts of the retail industry but it’s changing as much as any other part of the business, as a result of the digital transformation that the industry is experiencing. With a future that promises driverless transport trucks and drone deliveries the face of distribution and logistics has become a lot more interesting.
Dave Rodgerson Is the Retail Industry Lead at Microsoft Canada and has 25 years of industry experience working with leading Canadian Retailers in sales, marketing, operations, IT and strategic planning roles.
Mr. Rodgerson works closely with both clients and industry associations that share an interest in enhancing the consumer experience. His work has included consulting with such firms as Tesco supermarkets in the UK, Canadian Tire Corporation, Target Department Stores, Imperial Tobacco, Walmart Canada and Rogers Communications. More recently, he has been speaking about the customer of the future, the Omni Channel customer experience and the adoption of new technologies by consumers.
Mr. Rodgerson has been a member of the faculty of Meritus University where he taught Marketing in their School of Business. In addition, from an academic perspective, he is on the Board of Advisors for the Ryerson University School of Retail. He has played an active role with the National Retail Federation, the Retail Council of Canada and the Conseil Québécois du Commerce de Détail.
Mr. Rodgerson holds an MBA from Queen's University in Kingston Ont.