COMMERCE TRENDS National DCP unifies supply chain operations Tarsus Distribution boosts efficiency by 60% Food retailer Co-op delivers scalable ...
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COMMERCE A Manhattan Associates Magazine 2019/2020 TRENDS ENGAGE. EXPLORE. EXPAND. National DCP unifies supply chain operations Tarsus Distribution boosts efficiency by 60% Food retailer Co-op delivers scalable capability
COMMERCE
PUSH TRENDS
POSSIBLE
A Manhattan Associates Magazine 2019/2020
®
Henri Seroux
Senior Vice President EMEA
Manhattan Associates
A winner’s game
Commerce and supply chain go hand in hand.
Something Amazon’s Jeff Bezos and Alibaba’s
Jack Ma have known for years. Increasing
visibility, agility and flexibility across their supply
chain network made a commercial difference.
Technology is the name of the game.
Supply chain, extended to the point of sale, is
no longer just a cost centre. Fulfilling orders
at lightning speed, personalising products &
parcels and by offering customers additional
services, your supply chain can turn into a revenue
generating centre. Sophisticated technology
14 makes this possible.
In this magazine we showcase National DCP,
the company behind Dunkin’ Donuts and
Baskin Robbins, who see order, inventory and
transportation information flow quickly across
their new platform, giving unprecedented
end-to-end visibility across their supply chain.
4 22 Tarsus, South African IT distributor, recognised
the power of software solutions to improve
customer success while enhancing retention
through efficiencies and value. This resulted in a
TABLE OF CONTENTS 3PL methodology that adds valuable services to
end clients.
National DCP unifies supply chain operations 4
Software drives sustainability in the supply chain 6 Technology also creates a competitive advantage
Medi-Market reduces fulfilment costs 7 in stores. Lamps Plus upgraded its point of sale
Forget everything you know about point of sale 8 (POS) system to provide a modern, omnichannel
AI: What does it really mean for retailers? 10 experience. The new system provides store
Tarsus boosts efficiency by 60% 12 associates with a holistic and comprehensive view
The cool and sexy supply chain 14 of the customer so they can anticipate and quickly
Ready to take your technology to the next level? Fueled by a quarter century of tenacity, we’re You can’t secure what you can’t see 18 respond to their needs.
Co-op delivers scalable capability 19
on the ground with you helping you chart the best path between “in demand” and “in stock.”
The Online Paradox – how to profit from e-commerce 21 In today’s environment it is not just revenue and
Partnering with you to create seamless experiences that connect your store, your associates, your The evolving role of B2B companies 22 profit that counts. Sustainability is taking centre
warehouse, your website, and your service centre to the customer like only we can. Together, Discover Manhattan’s customer community 24 stage. As Steve Banker from ARC Advisory
Keeping customers happy: striking the right balance 26 Group shares: “Almost any supply chain software
let’s deliver beyond the expected to push potential, push profitability, and Push Possible. Credits 27 allows you to do more with fewer resources,
but improvements in supply chain software also
improve sustainability.”
We’d love to show you how technology can help
you to sustainably excel in all areas of commerce.
What are you waiting for? It’s a winner’s game,
To learn more, visit us online at manh.com/active contact us today.
©2019 Manhattan Associates, Inc. 2019/2020 - COMMERCE TRENDS 3
antiquated to effectively scale up with the
demands of a unified infrastructure. In came
a refreshed system consisting of multiple new
components, going live at once when ready.
Most ambitious program
According to Chris Lafaire, NDCP’s Senior Vice
President of IT, “`Project Freshstart’ is the most
ambitious program in our history. We combined
four regional companies into one national firm,
and then overhauled our entire IT network. what had been a static routing environment.
Integrating TMS and WMS functions on one The ability to incorporate multiple modelling
platform, merging it with our new ERP, Labour scenarios enables NDCP to run routes more
Management Systems, warehouse voice picking, efficiently and take advantage of backhaul
web portal and data centre operations, and rolling opportunities. Manhattan’s technology opens the
it all out in just 10 months has been essential to door for NDCP to leverage mobile applications
the program’s success.” in delivery operations. NDCP can fully unlock the
Manhattan quickly rose to the top of the list of value of its vast road infrastructure, capabilities
TMS/WMS/LMS providers. Its proven track record that will become ever more critical as it expands
of designing and managing integrated platforms, its geographic coverage area west of the
deep experience with wholesale food distributors, Mississippi and looks to double its distribution
the resources to execute the transition quickly centre footprint.
and easily, robust training and support tools, and
a scalable model that could be repeated as each Just 10 months
region went live, melded perfectly with NDCP’s The system went live just 10 months after the
needs. revamp began - an impressive rollout timeframe
by any measure. “We are in the early stages, but
Tightly integrated we couldn’t be happier with our decision,”
With a tightly integrated TMS and WMS, Lafaire said. “Manhattan has a mastery
NDCP manages its supply chain in ways of the technical issues and a thorough
it never has before. Order, inventory, and understanding of how our industry
transportation information flow quickly works. It grasps our objectives, and
A fresh start at Dunkin’ Donuts across the Manhattan platform, giving NDCP knows how to help us reach them.
unprecedented visibility from one end of Manhattan is the perfect partner to help us
NATIONAL DCP UNIFIES the chain to the other. Rapid access to
good information provides the flexibility to
introduce dynamic transport routing into
cost-effectively capitalise on the tremendous
opportunities that lie ahead of us.”
SUPPLY CHAIN OPERATIONS
B
National DCP benefits from the total order-to-delivery ehind the famous Dunkin’ Donuts and CHALLENGE SOLUTION PROGRESS & RESULT “WE CHOSE MANHATTAN
Baskin-Robbins brands is National DCP NDCP needed to NDCP selected The tight integration BECAUSE OF THE ABILITY
visibility that comes with seamlessly integrating (NDCP), the $2 billion a year sourcing and replace its 10-year- Manhattan based on of the transportation TO COST-EFFECTIVELY
transportation and warehouse management systems. distribution arm that ensures reliable product old IT system with its ability to seamlessly and warehouse systems SUPPORT OUR EXPANSION
deliveries to more than 8,100 restaurant locations technology that could integrate TMS and is expected to drive a AND HELP US FIND NEW
The company is more flexible in planning the drivers’ in the United States and abroad. As the IT and scale up cost-effectively WMS. This enabled 3-7% annual reduction WAYS TO DRIVE UP
schedules. Chris Lafaire, NDCP: “Our drivers log almost physical distribution backbone, NDCP is relied on when deployed the company to in transport costs, a EFFICIENCIES.”
by thousands of franchisees to serve up what their nationally. A more optimise transportation 10-20% improvement in Chris Lafaire, Senior Vice
45 million kilometres each year, so transportation is a customers want, when and where they want it. tightly integrated TMS/ processes and gain backhaul opportunities, President of IT, National DCP
key part of our cost structure and value proposition. In a move to optimise its physical and IT networks, WMS was needed to pipeline visibility and a 10-20% drop in
NDCP launched a major initiative called ‘Project provide visibility to from purchase order waste and spoilage.
Optimising our inbound and outbound road networks is Freshstart’. NDCP merged its four legacy regional schedule driver pick-up management to
central to making it all work. businesses into one national company. It then and delivery. final delivery to the
rebuilt its IT capabilities virtually from scratch. franchisee.
Out went a 10-year old system too fragile and
4 COMMERCE TRENDS - 2019/2020 2019/2020 - COMMERCE TRENDS 5
SOFTWARE DRIVES SUSTAINABILITY
IN THE SUPPLY CHAIN
Steve Banker is clear about sustainability. Manhattan Associates interviewed
him as head of the supply chain & logistics consulting team at ARC. “When it
comes to sustainability the key requirement is a willingness to set high goals
and to commit to a multiyear period to try and achieve those goals.”
What are the key challenges that we “In the old days, you would fill up a Do you think there’s a way to offer
need to solve right now for sustaina- truck with pallets deliver to stores. lower cost and be sustainable at the
bility in ecommerce? Now we’re having shipments of same time?
“The ecommerce question is a good
one, ecommerce is just inherently a
less efficient way to do retail compared
just one or two goods, and they go
by courier. Eddie Capel, CEO of
Manhattan Associates, talked about
“Any supply chain solution is a
sustainability solution. Almost any
supply chain software allows you
MEDI-MARKET REDUCES
to before ecommerce became so big.
Young folks are often more committed
to sustainability than older generations.
this at Momentum in May this year.
His idea is that we need to give
choice to consumers, giving them
to do more with fewer resources.
Two solutions that do this well are
transportation management and
FULFILMENT COSTS
They today look at Amazon and say, the information needed to make supply chain design systems. When
‘Wow, that’s a really cool company’. an informed decision so that when it comes to ROI, these are areas Founded in 2014, Medi-Market Group is considered a disruptor in the Belgian
Technologically, Amazon is doing a shopper buys online, they see where you can get sustainability pharmaceutical and drugstore market with its aggressively low prices. In just five years,
such interesting things, but do sustainable options. You just say, ‘Geez, improvements for free. Our recent the company has quickly grown to 32 parapharmacies, 17 pharmacies and four beauty
need to improve their approach to if you want it tomorrow, we can ship ROI research around transportation salons. In 2019, the company aims to open more than 15 stores and significantly grow its
sustainability. Not just because of their it tomorrow. But if you can wait three management systems showed the ecommerce business.
internal processes but because they’ve or four days, we’ll ship it not only at average business implementing a TMS,
M
pretty much forced all retailers to come a lower cost, but here are the CO2 reduces their freight spend by 8%, edi-Market recently selected Peter Bos, CIO and Supply Chain Director, Medi-Market Group is a
up with an ecommerce omnichannel benefits that will accrue if you do it that while maintaining or even improving Manhattan’s cloud-based Medi-Market Group Belgian retail group founded
strategy. way.’” their service levels. That’s one area solution Manhattan “Manhattan Active SCALE is an enabling by Yvan Verougstraete in
where sustainability comes for free. Active® SCALE to run its distribution technology for our future growth plans in 2014. The group is active in
Who has the ownership for these I honestly don’t know why more operations in its 4,000-square-metre our stores and online. To support this steep the pharmaceutical and in the
solutions. Is that the supplier, ven- companies aren’t pursuing it. Belgian distribution centre in Nivelles. growth curve, we chose Manhattan’s WMS parapharmaceutical sector,
dor consumer, g overnment regula- The solution will enable Medi-Market technology to give us maximum flexibility offering close to 30,000
tion, or is it some combination of “Improvements in supply chain to improve warehouse productivity and and scalability so that we can go even references in a.o. dermo
everyone? software improves sustainability. decrease labour costs, giving it the further in providing affordable medical care cosmetics, skin- and haircare,
“If you really want to drive In supply chain management ability to focus on expanding its market to all.” food supplements, natural
sustainability, you must take it down there’s a real effort to use artificial reach while substantially increasing drugs and childcare. Medi-
to the consumer level as well as taking intelligence, machine learning, as well pharmaceutical affordability. Pieter Van den Broecke, Managing Market Group succeeded
it down to the voter level. I know as incorporating new data sources Director Benelux and Germany, in transforming the market
that there’s a lot of people, if you to improve performance. Existing The market-leading picking Manhattan Associates with low prices combined
Steve Banker, do surveys, that will say, ‘I am more products are just getting better methodologies will expedite retail “One of the fastest growing drugstore with a vast assortment and
Vice President likely to buy a product, even if it costs and better based on these new replenishment and online order retailers in Europe, Medi-Market is professional advice. Around
Supply Chain more, if it’s green.’ But that’s not really technologies.” fulfilment, and its optimised put- investing in innovative solutions which will 12,000 customers visit the
Management, true. The CEO of a big CPG company away and replenishment of picking help it accelerate its growth in Belgium as shops every day, generating
ARC Advisory mentioned for example that when they locations will streamline key warehouse well as in nearby countries. The easy-to- a turnover of more than 80
Group took a good look at the data, only 15% operations. SCALE’s advanced implement, cloud-based solution minimises million euros in 2018. The group
of consumers were willing to pay more inventory management tools will also the use of Medi-Market’s IT resources and currently has more than 450
to get green goods. So, I think it comes provide Medi-Market with real-time provides it with faster implementation and employees. Medi-Market Group
down to us as consumers and us as stock visibility and accuracy. quicker ROI. We are pleased to see our continues its mission outside
voters.” This article is a summary of the podcast Manhattan Active SCALE being used to of the borders of Belgium with
with Steve Banker and Manhattan deliver optimal customer service.” the recent acquisition of the
Associates. The full podcast can be parapharmacy chain Parashop
replayed via www.manh.com/tms. Italia, and opening stores in
France.
6 COMMERCE TRENDS - 2019/2020 2019/2020 - COMMERCE TRENDS 7
FORGET EVERYTHING
YOU KNOW ABOUT
POINT OF SALE
Forward-thinking retailers and demanding consumers
now expect much more from the humble cash register
at checkout. The next generation point of sale (POS)
4
FUTURE TRENDS
At Manhattan Associates we have
an eye on the future and see trends
taking shape today that will change
how retailers need to operate
tomorrow.
can be a significant point of commercial differentiation, GRASP GOLDEN OPPORTUNITIES TO SAVE THE Next-level sales forecasting:
giving retailers and brands an opportunity to offer SALE AND INCREASE AVERAGE BASKET SIZE Using machine learning, effective
control of orders will generate more
information-rich customer experiences. accurate buying signals, which in turn
will enable more dynamic inventory
allocation and pre-ordering.
C
ustomers crave personalisation, with have options of how and when
75 percent saying they are more likely to they can complete their Channel demand patterns:
buy from a retailer or brand that knows purchase—for example Data insights will emerge from
them by name, recommends options based on buy in-store, take away Lamps Plus enhances connected commerce systems that
past purchases or knows their preferences. As
e-commerce has shown, offering such product
or order and have it
delivered.
shopping experience reveal how channel use is evolving
over time. This will inform future
recommendations based on purchase history Unified basket Lamps Plus has successfully deployed Manhattan fulfilment strategies and the best
creates proven conversion opportunities that most transactions at the point Point of Sale to deliver an advanced omnichannel route to long-term growth.
stores aren’t currently able to capitalise on. That’s of sale are the key to a shopping experience to its customers. Lamps
because store associates lack a single view of all seamless omnichannel Plus is the largest specialty lighting retailer in the Growth of drop ship:
customer transactions across multiple channels, customer experience. United States, operating a thriving e-commerce Direct-to-consumer shipments are
hampering their ability to personalise the in-store business, along with 36 stores. already emerging as a new channel
experience based on the shopper’s buying habits. Customers hate queues Lamps Plus decided it needed to upgrade its for fast, cost-effective delivery.
Real-time access to customer data, however, 90 percent of consumers traditional POS system to a modern, omnichannel Retailers can retain control of
enables store associates to view their profiles, say they will avoid a experience. Manhattan Point of Sale brings customer data but fulfil away from
including purchase histories, average order store completely if a together selling, customer engagement and their own distribution centre. Supply
values, online browsing habits, likes and dislikes, line is too long. The store inventory and fulfillment to help store chain and inventory management
wish lists and loyalty status. Based on this answer is mobile point teams deliver customer experiences with a single software must have the ability to
granular information, sales staff can make highly of sale that gives store omnichannel system of record for adapt and scale in line with this
personalised recommendations, nurturing their associates the freedom managing customer interactions trend.
customers to achieve increased sales and repeat to walk the shop floor, delivering and transactions. The new
customers. personalised experiences and software also allows Lamps Next-generation store experiences:
recommendations, upselling and Plus to choose from Digital handheld tools are appearing
Shop the endless aisle cross selling products before numerous hardware in-store so that staff can improve the
Online and in-store product assortments often seamlessly taking payment with manufacturers, form omnichannel experience. These give
continue to exist in silos. Even if employees have their mobile device. factors and operating access to ‘endless aisle’ inventory,
the ability to view online inventory in-store, the Point of sale is clearly just one systems. clienteling services, individual
checkout process continues to remain separate facet of the modern store customer preferences, POS, delivery
between store and online purchases. Only a next- environment. Modern retailers and loyalty capabilities, and, over
generation point of sale capable of processing must be able to adapt faster Clark Linstone, Chief Financial Officer, Lamps time, will play a greater role in
unified basket transactions can bridge this gap. than ever before. And that Plus: “Manhattan Point of Sale provides shopper journeys.
A real-time view of network-wide inventory will requires new thinking about our store associates with a holistic and
show the store associate if specific items are in systems, data, logistics and comprehensive view of the customer so they
stock on the premises or are available at another execution at every step along the can anticipate and quickly respond to any
store or at a distribution hub. Customers will then buyer journey. need.”
8 COMMERCE TRENDS - 2019/2020 2019/2020 - COMMERCE TRENDS 9
ARTIFICIAL INTELLIGENCE:
WHAT DOES IT REALLY MEAN
FOR RETAILERS?
An amazing AI solution in-store that uses a Furthermore, AI enables retailers to better
Despite the progress that has been made around Artificial Intelligence (AI), retailers still need to ask customer’s hair and skin tone, size and style manage the changing sales peaks, such as back to
to recommend products, from hair styling to school or an unexpected April heatwave, as well
themselves: what is the goal? What can AI really deliver – and what will this mean for consumers? make-up, fashion to accessories, is incredibly as problems with shipping or haulage. Essentially,
Craig Summers, UK Managing Director, Manhattan Associates warns against falling for AI gimmicks exciting. But unless every recommendation is AI delivers more accurate and granular predictions
available to buy in-store at that very moment, that can be used to smooth out the entire logistics
if retailers are to leverage AI to its full potential, promoting predictability and above all, delivering a or if not, easily sourced and delivered to the process in real-time. With differentiation and
greater customer experience. customer’s destination of choice, using AI in this innovation at the core of AI, there has never been
way is nothing more than a gimmick. It may add a better time for all types and sizes of retailers
a little levity to the shopping trip – but it does to leverage AI and ML to level the playing field
A
rtificial Intelligence (AI) has undoubtedly AN AMAZING AI SOLUTION IN-STORE not provide a truly compelling and repeatable with major retailers, not only to help neutralise
become one of the biggest buzzwords of THAT USES A CUSTOMER’S HAIR customer experience that delivers on the and compete, but to differentiate and innovate.
2019 and its use within retail is only set to AND SKIN TONE, SIZE AND STYLE TO bottom line. Retailers have shown in the past how they can
grow, not just for large market-leading retailers, RECOMMEND PRODUCTS, FROM HAIR embrace innovation, rise to a challenge and adopt
but for retailers of all shapes and sizes across many STYLING TO MAKE-UP, FASHION TO And this is the key: in today’s highly competitive the technology available – so now is the time for
sectors. Driven predominantly by the success ACCESSORIES, IS INCREDIBLY EXCITING. retail environment, the priority has to be on them to do it again.
and maturity of AI and Machine Learning (ML) customer experience, satisfaction, and retention.
platforms/solution providers and the pervasive Otherwise, customers will just easily drift over Conclusion
Craig Summers, growth and adoption of Cloud Service Providers, to another retailer within the overloaded omni- In the future, AI will offer the chance to transform
Managing Director retailers are beginning to move past the marketing channel marketplace. Strong customer experience customer personalisation. It will support the most
UK, Manhattan flurry that AI once was. Now, retailers are and satisfaction is not achieved through gimmicks, extraordinary innovations – both externally and
Associates beginning to develop a legitimate appreciation but through ensuring customers quickly get their internally – and support huge changes in the
of what it takes to properly evaluate, prepare and hands on the products they’re seeking. In practice, way retailers and customers interact. Aside from
produce AI and ML-enabled solutions. this means maximising stock availability – where AI-driven, personalised and on-demand product
it is needed, at the right time. It means achieving creation (imagine the ‘personalisation’ we see
Confusing gimmick with experience a slick warehouse operation that can fulfil today but heightened ten-fold), AI will enable
Online, in-store, in the warehouse, the both to store and direct to consumers without highly accurate behavioural analysis that will
opportunities to leverage AI and ML to improve unaffordable – and often hard to find – additional ensure the retailer knows what a customer wants
retail operations are compelling – no wonder workers. It means improving predictions to long before the customer has any idea.
research predicts that retailers will spend minimise discounting and maximising best-
$7.3billion on AI by 2022, more than tripling the selling products. With this approach, retailers can Imagine virtual shopping networks with intelligent
average spend in 2018. However, before AI can be achieve true customer satisfaction and loyalty, shopping assistants, with visual and conversational
truly effective in the sector, the challenge of data and therefore achieve higher levels of sales, and digital assistants for both consumers and retail
quality, quantity and privacy must be addressed. sales longevity. staff; imagine just how interactive and innovative
Even with the volumes of data currently captured retailers can make the experience for their
by many retailers, they often still struggle with AI in the future customers. But that is the future. And, let’s be
utilising accurate, complete and contextual data – Retailers that have embraced AI in the warehouse clear, such behavioural insight is of zero value if it
including historical data – to fully take advantage are already driving tangible improvements in cannot be backed up by a retail operation that is
of the benefits AI can bring. Additionally, many efficiency and accuracy. By combining deep, high efficient and effective – and can automatically and
customers are becoming less willing to share their quality order history data with AI and ML to better consistently deliver every aspect of the customer
data, which is necessary to truly make AI and ML understand the characteristics of order trends, experience.
models accurate and successful. In the rush to including direct to consumer ecommerce orders,
embrace innovation, it is easy to overlook these retailers can reconsider the pick, pack and ship AI is taking retail by storm but put the gimmicks
challenges and move focus away from the bottom processes. Schedules are being reorganised; aside: the real and attainable value of AI right now
line objectives, which should be: where is the resources redeployed; while orders can be is to be gained by applying proven algorithms to
ROI, and what is the implication for the customer seamlessly prioritised, and new delivery options drive essential supply chain improvements.
experience? enabled.
10 COMMERCE TRENDS - 2019/2020 2019/2020 - COMMERCE TRENDS 11
• Extend and optimise current warehouse nature of the change. Instead, the teams were
offerings and solutions. excited about the shift to a growth and efficiency
• Implement change in the culture of the firm. mindset.
This was presented as the biggest challenge but Though there was initial employee pushback
became the biggest opportunity. when asked to move away from the familiar,
• Reduce costs, as well as increase internal Tarsus as whole recognised the way forward lies in
efficiencies through labour force optimisation using innovative solutions to price competitively,
and staff empowerment. developing internal and external infrastructure,
• Drive a customer-centric approach which would and establishing new skill sets, strategies and out-
improve their customers’ experiences. of-the-box thinking.
Greater efficiency Long-term success
The entire process - beginning with aligning By investing in Manhattan SCALE, Tarsus
needs and expectations and then implementing recognised the power of solutions that raise
the system - took a year and a half. But Tarsus customer success and enhance retention through
began seeing positive results within two months efficiency and value. This resulted in a 3PL
of going live. methodology which leveraged existing assets and
Manhattan SCALE was implemented in a infrastructure while adding valuable services to
systematic and phased manner. Standardisation, end clients. Tarsus achieved the following:
automation and optimisation of processes • Pick rate productivity improvements in excess of
resulted in a reduction of staff requirements, and 60%.
also improved operations through a customer- • Labour force reduction of 25% and elimination of
centric approach. Thanks to data optimisation overtime.
tools in the new technology, Tarsus was able to be • Inventory accuracy greater than 99%.
more proactive in ensuring customer satisfaction. • Business growth challenges met and exceeded
Pick path sequencing, in conjunction with through optimisation processes.
Inventory ABC analysis and related warehouse • Reduction of ongoing MHE costs.
TARSUS BOOSTS layout, increased overall efficiency by a stunning
60%. The newly optimised and mapped-out pick
path reduced picker travel time in the warehouse
• Increased sales and customer satisfaction,
driving new momentum in demand generation.
• Growth in profitability due to huge
EFFICIENCY BY 60% by a massive 35%. This has been a crucial element
in achieving the high efficiency in customer
service.
improvements in internal quality and
effectiveness.
Thanks to Manhattan SCALE and Supply Chain
With the speed of innovation and change within the South African hardware reseller market, Cultural impact Junction, Tarsus has set itself apart in marketplace.
The pedigree of the Manhattan solution, paired It has proven that it can implement 3PL customers
Tarsus needed a solution to ensure that is was able to adapt rapidly and embrace and leverage with Supply Chain Junction’s consulting expertise in timelines in accordance with international
this change. It was recognised that the existing legacy software solution and supply chain practices and project methodologies, ensured an elevated standards, with high marks for customer
operational system that would propel Tarsus’ satisfaction. With solid technology foundation in
were a key inhibitor to this change and needed to be modernised. The solution was found in the customers’ success. Finally, positive outcomes of place, Tarsus can move into the future knowing
Manhattan SCALE software application platform. the change in software and processes – in such a future success is within its reach.
short timeframe – quickly settled the disruptive
T
arsus was established in 1985. With more grow the business by developing their unique
than 30 years of operation, is the longest- distinctive services in the market.
established IT distributor in South Africa. CHALLENGE SOLUTION PROGRESS & RESULT “NOT ONLY HAS
Tarsus Distribution distributes the world’s leading Program for change Tarsus Distribution With Manhattan SCALE Pick rate productivity MANHATTAN SCALE
IT hardware brands to the Southern African Tarsus embarked on a journey to implement a had a decades-old Tarsus was about to improved more REMOVED ERRORS AND
reseller channel. data driven and process-oriented program for warehousing system, bring its customer- than 60%, inventory INEFFICIENCIES, IT HAS
But the Southern African market is changing. change, focused on their end customer success. outdated processes and centric business model accuracy increased to IMPROVED PRODUCTIVITY
Tarsus needed to invest in a new IT solutions for its Manhattan and Supply Chain Junction were there practices and needed to life by streamlining greater than 99%, and THROUGH FLEXIBLE AND
supply chain. The company wanted to improve its to ensure the company turned its vision into a to plan for rapid change processes and the labour force was OPTIMAL PICK PATTERNS.”
long-established solutions and processes through reality. in the technology improving customer reduced by 25% along Tim Proome, Head of Supply Chain,
the Manhattan SCALE software application Tarsus aimed to achieve the following objectives distribution industry. service. with an elimination of Tarsus
platform. The company also chose to partner with when they started their journey: overtime.
Supply Chain Junction to leapfrog legacy and
12 COMMERCE TRENDS - 2018/2019 2019/2020 - COMMERCE TRENDS 13
H
ow times have changed! Today the
customer is a mighty ruler, dictating
how retailers should behave with just
WHO WOULD’VE THOUGHT a wave of their hand. What matters most is
not the cost of those logistics activities, but
that the goods end up in the right place at the
THAT SUPPLY CHAIN right time and at the right speed. After all, the
ruler’s wrath is merciless: one false move can
be fatal, and consumers move onto another
WOULD EVER BE COOL competitor who can meet their demands and
expectations.
AND SEXY? Henri Seroux, Senior Vice President EMEA
at Manhattan Associates, explains that
consumers now take note of retailers’ logistics
performance: “Logistics never used to be
an everyday topic of conversation, but now
it’s not unusual for logistics professionals to
suddenly find themselves discussing their
work at parties or with their friends and family.
Logistics is back in fashion!” Warehouse
managers have got a sparkle in their eyes once
more, he says. By fulfilling orders at lightning
speed, personalising products & parcels and
by offering customers additional services, they
can really make a difference. “Logistics has
become an essential part of an organisation’s
business strategy. Who would’ve thought that
warehouse management could ever be cool
and sexy?”
Wasn’t life easy in logistics back in the days when customers still came “NOW THAT GOOD EMPLOYEES
ARE HARDER TO FIND, IT IS Ideally, everyone involved in the process
to our stores, and took their purchases home with them? We had to should have that same glimmer – from the
MORE IMPORTANT THAN EVER
ensure we had the right items in stock, of course, but we could focus our TO BUILD CLOSE-KNIT TEAMS warehouse operatives who pick and pack the
OF PEOPLE WITH DRIVE AND items, the drivers who jump in and out of their
logistics efforts on improving efficiency and reducing costs. But while vans to personally deliver (and sometimes
ENTHUSIASM.”
smooth-running logistics had some impact on retailers’ margins, it had Henri Seroux, Senior Vice President even install) the ordered goods, to the store
EMEA, Manhattan Associates associates who provide tailored advice to
little to no effect on their revenue. Logistics was simply not a significant assist shoppers in their buying decisions.
factor in creating a competitive edge. Eager, enthusiastic and motivated people
inject that extra touch of spirit that is so
important in the battle for the consumer’s
favour nowadays. >
>
14 COMMERCE TRENDS - 2019/2020 2019/2020 - COMMERCE TRENDS 15
“EMPLOYEES ARE MORE MOTIVATED WHEN THEY ARE BETTER INFORMED.”
Henri Seroux Senior Vice President EMEA, Manhattan Associates
TIME TO CLOSE THE GAP
In recent years, retailers have invested in benefit from offering shoppers the chance to feel better about themselves and are more
state-of-the-art technologies to improve try before they buy and to take products home motivated. “Imagine how a store associate feels
customer satisfaction with the shopping with them immediately. when – thanks to a mobile device– an in-store
experience. The top priority is consumer shopper knows more about products and prices.
convenience. Technology is facilitating faster On behalf of Manhattan Associates, research When employees know their customers, they can
and more efficient shopping. So far, online firm Multiscope (Netherlands) and YouGov provide better advice, make relevant special offers
retailers have been the ones setting the trends (Germany) surveyed over 3,000 consumers on and perhaps even start a personalised marketing
in terms of logistics processes, convenience their wants, needs, expectations and buying campaign – such as sending them an email to
and the customer experience, but it is now behaviour. Two important conclusions for say that a new shirt in their favourite colour has
high time for traditional retailers to close the traditional retailers: just arrived. An employee who acts more like a
technology gap. Brick-and-mortar retailers can personal shopper rises in status and will ultimately
sell more.”
Empowering employees
Humans will never be replaced even though
CONCLUSION #1: The physical store has not lost its appeal CONCLUSION #2: Consumers have high expectations technology may well take over certain manual
of technology “Good employees can be hard to find, it is now tasks. Quite the opposite, in fact: technology
Despite frequent claims to the contrary, physical stores have more important than ever to build close-knit enables a company to make better use of its
definitely not lost their appeal. According to our panel, they Convenience is key, and online and offline retail are clearly no teams of people with drive and enthusiasm. people’s talents. Seroux calls it ‘empowering
regularly visit physical stores, in particular to try a product exception. Our respondents want technology to be used to Across Europe there is already a shortage of truck employees’. “Employees are more motivated if
or be able to take it home with them immediately. End-of- speed up and simplify processes – specifically to improve the drivers, as well as also increasingly difficult to they are better informed, feel heard and do work
season sales or special offers are another reason for a lot of provision of information and to make financial transactions recruit warehouse operatives across large parts that suits them and they can excel at. Their pride
customers to visit a store. And of course, price is always an easier. Additionally, almost a quarter of the customers would of the continent. The use of mobile and flexible and self-confidence grow, and that pays dividends
issue. like to see technology used to create a unique shopping robots in warehouses and self-driving trucks could in the long run.”
experience. partially solve these problems in the longer term,
Recommendation for retailers: Physical stores still add but we will still need humans for the foreseeable Personal contact between associates and
significant value for shoppers. In fact, in the future, stores Recommendation for retailers: It is high time for brick-and- future. And it’s important to deploy people in consumers is more important than ever in today’s
are expected to play a bigger role in the delivery (ship- mortar retailers to integrate the efficiency and convenience roles that make the very most of their talents and digital age. After all, it is a key element in the
from-store), pick-up (click-and-collect) and return of online of online shopping into their physical stores. For example, abilities,” states Seroux. shopping experience; it’s one of the main reasons
orders. It is advisable for retailers to start putting the relevant with the right technologies retailers can give shoppers easy that people still visit stores. Seroux: “Retailers that
systems in place now in order to ensure this logistics process insight into product availability, amend orders after they Improved productivity excel by using technology to enable their staff to
runs smoothly. have been placed and offer a fast and hassle-free payment Enabling technology that drives this is available. create a fabulous customer experience, across the
process. Improvements such as these will not only simplify One such tool is labour management software digital omnichannel environment, from contact
What are the deciding factors when the shopping experience but will also create a consistent which visualises the performance of employees centre, store, social teams and more, will drive not
shopping in a store? (In percentages) omnichannel experience for consumers. in various warehouse roles. Depending on the only customer loyalty but grow revenue through
workload, they can be deployed where they a holistic view of customers, real-time insight and
PRICE
How can technology help to improve generate the most value. “The team leader has engagement that not only connects the enterprise
59 the shopping experience? (In percentages) access to an app that shows how everyone is but truly enables customer connectivity. So, with
66 performing. Those insights form the basis to take a connected, agile and flexible solution, supply
TAKING PRODUCTS HOME IMMEDIATELY CONVENIENCE
the right action at the right time and entering a chain is certainly cool and sexy.”
60 58 dialogue with the employees – not necessarily
62 45 to spur them on, but rather to make their work
TRYING OR TESTING PRODUCTS INFORMATION
more enjoyable and to proactively avoid them
62 61 becoming overstressed. This automatically
48 36 improves productivity.”
END-OF-SEASON SALE / OFFERS EXPERIENCE
52 24 Technology can also help store associates to
41 18 generate more revenue. Armed with a tablet
HELPFULNESS / FRIENDLINESS OF STAFF PERSONALISATION
that provides tailored advice based on each
44 11 consumer’s customer profile, online activity and
35 13 purchase history, store associates transform into
(PRODUCT) ADVICE / KNOWLEDGE personal shopping assistants. Not only that, but
38 employees who add more value for shoppers
34
NL DE NL DE
16 COMMERCE TRENDS - 2019/2020 2018/2019 - COMMERCE TRENDS 17
YOU CAN’T SECURE WHAT YOU CAN’T SEE Dave Robertson,
Retail IT Director,
Co-op UK
When your company’s name appears in the press, the story should be about
your fantastic third-quarter earnings, improved year-on-year same-store results,
and the efficiency of your supply chain. You never, never, never want to see a
T
news story about a huge data breach that exposes private, GDPR-regulated oday, Co-op is one of the world’s largest
information about your employees – or your customers. consumer co-operatives, with 4.65M active
Members, turnover in excess of £10BN, and
interests spanning food, funerals, insurance, legal
Y
et such breaches happen far Threat visibility only 16% of chief information security services and health.
too often, as we all can see by Threats are everywhere, thanks to both officers are able to collect, analyse,
reading our favorite newspaper external agents (hackers) and internal and respond to 75% or more of their The Co-op aims to operate at the heart of local
or website. What can you do to prevent hazards (disgruntled employees). security event telemetry, says the community life - championing better ways of
this? The first step is to know what Confidential data, including inventory, Oracle and KPMG Cloud Threat doing business. In September (2016), Co-op
you have in terms of data, systems, financial, pricing, business plans, Report 2019. rejuvenated its Membership proposition, this fol-
applications, users – and third-party and customer info, is stored in data lowed a move back to its iconic clover-leaf design
actors like suppliers, customers, centers, laptops, mobile devices, and The key to avoiding bad incidents is “Co-op” logo, a logo which doesn’t just stand for
partners, consultants, and contractors. cloud services. Maintaining security increased visibility by the security team. a business, or even a family of businesses. It repre-
This can be particularly complicated across these systems is no easy feat. Everywhere. That means seeing things sents a powerful idea with values and principals.
in retail, because of the complexity Meanwhile, rules and government both inside and outside the classic It represents a way of doing business that’s stood
of managing stores and e-commerce, regulations are tougher. ‘network perimeter’ because, let’s be the test of time – 175 years this year.
as well as a v-e-r-y long supply chain frank, that perimeter no longer exists.
with complicated logistics. However, The big first step is to gain threat The many challenges society faces today are con-
there are no excuses. Every company visibility across all platforms. Until Obsolete notion siderable - and the Co-op has to be ambitious,
needs to keep your confidential data you’ve accomplished that, you can’t Thanks to cloud computing, mobile not only for its business, but for the communities
out of the hands of competitors, while determine the risks, and establish devices like smartphones, and the which it serves. It wants those communities to
assuring customers and partners that priorities to manage those risks. internet of things, the classic perimeter understand how choosing the Co-op benefits
you are safe to do business with. You can’t secure what you can’t see. is an obsolete notion. This means them. To think of Co-op as something different,
Your top goal for the next year should that security and IT staff must change something that brings people together and keeps
be to gain true visibility into your cloud, assumptions about safe traffic, trusted them together. It runs its business differently
mobile, and on-premises assets, and to users, and the idea that there is a single because it is owned by its Members. >
understand the external vulnerabilities demarcation point between public and
- and be able to quickly see and private clouds.
correlate risk and incidents across all
those platforms. Indeed, the new perimeter has been
pushed up into the cloud and into the
CO-OP DELIVERS
Tell-tell signs
Having data spread across multiple
tiers of applications and cloud services,
hands of every user in the form of their
identity. You’ll need every employee
to help make sure that data is safe and
SCALABLE
Alan Zeichick,
Director of
Strategic
and sometimes out on unauthorised
services, can greatly impact the
organisation’s ability to have unified
secure, and stored inside sanctioned
applications. That means finding out
about unapproved applications, and
CAPABILITY
Communications, visibility and correct incidents to even approved applications used in
Oracle determine vulnerabilities and see unapproved manners. Co-op is a story 175 years in the making, founded in
attacks.
Never forget that security is first and
1844 by The Rochdale Pioneers, people who cared
For example, hidden in the mounds foremost a cultural norm. If it is not about their community and fought to change society
of security log files generated every a cultural norm, you won’t have true
second across every enterprise could visibility into all the data. You can’t
for the better with fairness, education, inclusivity, and
be the fingerprints and tell-tell signs secure what you can’t see. equality among the values still at the very heart of
of an attack. But here’s the problem:
everything that the Co-op does.
18 COMMERCE TRENDS - 2019/2020 2019/2020 - COMMERCE TRENDS 19CO-OP CONTINUES TO INNOVATE AND
INVESTS TO MAINTAIN COMPETITIVE
ADVANTAGE WITHIN THE CONVENIENCE
SECTOR. DELIVERING EASE,
THE ONLINE PARADOX –
CONVENIENCE AND CHOICE FOR TIME-
PRESSED SHOPPERS.
HOW TO PROFIT FROM E-COMMERCE
For years now, retailers have been facing the inconvenient truth of needing
to incur the incremental costs of consumers shifting from in-store to online
shopping, to the detriment of profitability. To meet consumers’ expectations,
retailers have had to survive in the (often) margin dilutive world of e-commerce.
W
It works to create value in its communities and Its Members also backed a move to accelerate orldwide, online shopping less profitable or potentially margin All of these responses, however,
supply chain - whether this is support for local action to reduce impacts on our natural world. contributes to 12% of global dilutive. Retail used to be based on mandate a granular understanding of
suppliers; its pioneering work with Fairtrade Co-op has committed to accelerating steps to retail sales (more than 20% the consumer doing the fulfilment both customer behaviour and activity-
- where Co-op was the first retailer to bring curb Green House Gas (GHG) emissions and backs in mature markets) and this is expected themselves in the stores. Yet now we’re level costs. Not going to this granular
Fairtrade bananas to the UK; campaigning for global goals to limit warming to the most stringent to grow with nearly 50% by 2021. This all increasingly setting the expectation level is not an option.
greater protection for victims of modern slavery; of targets. In the last year alone, Co-op reduced increase of online sales also means that this massively value-adding activity
alleviating water poverty in some of the world’s GHG emissions by 20%. It has the lowest plastic a shift from store-based fulfilment to can be owned by the retailer without Operations model
poorest communities; investment in Co-op footprint of any retailer, was the first UK retailer to home-fulfilment. When one considers getting fully reimbursed for this service. Since the commercial model is typically
Academy Schools and, its ground-breaking cam- make compostable bags widely available and, will a 100 euro in-store grocery basket And this expectation of service keeps not enough to pivot into profitability,
paigning for Safer Colleagues, Safer Communities, eradicate hard-to-recycle plastic from stores. delivering between 2 and 6 euros in growing: shorter lead times, smaller the operations model is the second
Co-op invests in changing societies for the better. profit, while home delivery typically delivery windows, easier returns, etc. domain that need explicit focus. The
The Co-op continues to grow, the strength of its entails an extra 7 to 13 euros of costs, majority of the incremental costs arise
How it runs its business creates value for the com- business can be seen by its underlying financial it does not take a mathematician to So what is a retailer to do? If we from the physical product movement to
munities it serves – the many £Millions Co-op position and the increasing impact it is having in conclude this has a potentially fatal assume that saying no is not an option, the consumer, and specifically from the
returns to local causes through its Membership communities. Earlier this year, Co-op was awarded impact. the question then becomes how to inefficiency of asset utilisation (driver
scheme is a very big example of this, but there the “Grocer of the Year” title at The Grocer Gold minimise the margin impact. This and vehicle). Drop density is the most
are many more ways in which it gives back. Its Awards. It continues to innovate and invests to This is what we call the Online Paradox: comes down to two key questions: relevant variable to influence.
Stronger Co-op, Stronger Communities plan is maintain competitive advantage within the conve- retailers need to move their business how to optimise the commercial model
helping customers recognise that choosing Co-op nience sector. Delivering ease, convenience and online in order to stay relevant, but to ensure the consumer pays his fair Drop density is mainly driven by
means choosing to do good for community. choice for time-pressed shoppers. Last year (2018), every transaction that moves from share and how to set up the operation two components. One component
Co-op wants to help create stronger, more con- Co-op became the first retailer to trial autono- offline to online requires massive to ensure that costs are as low as is minimising the travel time versus
nected communities, which is why it launched the mous robots. It launched e-cargo bike deliveries upfront investments, and tends to be possible? number of drops. Retailers around the
Endangered Spaces campaign in partnership with and explores exciting online and digital propositi- world are experimenting with e.g. dark
Locality, aiming to protect 2,000 community spa- ons; developed the capability to offer Franchises Commercial model stores, regional hubs, pick-from-store
ces by the end of 2022. at scale and, continues to invest in opening new Lots of retailers started with free home in part to address this parameter. The
stores, in particular in transport hubs, key city deliveries, but more and more retailers second component is maximizing the
The Co-op today has 2,600 food stores, and in locations, residential apartments and Universities. in recent years have come back on that consolidation of orders in a single trip.
a challenging economic environment has seen decision. Beyond iterating the price Experiments with so-called milk-runs,
over 20 consecutive quarters of like-for-like sales It believes co-operation today, as a way of getting of the unit fulfilment service, there whereby the customer is told when the
growth. It also supplies over 5,000 other stores things done and making changes for the wellbeing appears to be four levels of response: delivery will arrive, also zoom into this
including those run by independent co-operative of society, is more relevant than ever. • Setting up the pricing in a modular domain.
societies; franchisees and independent operators manner, along the dimensions
through its acquisition of Nisa Retail Limited. It has worked to evolve its supply chain, working Kevin Overdulve, Mark-Jan of product type, delivery speed, For the operations side, however,
with strategic partners such as Manhattan to deli- Director in Grootenboer, window width, etc. the same prerequisite applies
It has worked hard to ensure it remains relevant to ver scalable capability, and to support the creation Logistics & Senior Manager • Encouraging lower fulfilment-cost - a granular understanding of the
all generations, in particular younger co-opera- of a sustainable and efficient logistics operation Distribution, Strategy & propositions such a click & collect key costs drivers and a proactive and
tors – this year Co-op operated a deposit return which delivers what its Members and customers Deloitte Operations, from store or 3rd party locations. holistic management of these drivers
scheme for plastic bottles to reduce pollution and want, need and care about, conveniently. Consulting Deloitte • Introducing a fulfilment subscription, is necessary.
littering at its pop-up shops at some of the UK’s Consulting to encourage more deliveries and
biggest music festivals, including: Download, Isle thereby spreading the costs across
of Wight, Latitude and Creamfields. multiple fulfilments.
• Integrating the fulfilment service into
a subscription proposition a la Prime.
20 COMMERCE TRENDS - 2019/2020 2019/2020 - COMMERCE TRENDS 21THE EVOLVING ROLE OF Agility
Executing to those delivery windows calls for
outstanding logistics to get orders to the right
to your current software you need an extra layer
that can cope with customers’ new demands.”
Van den Broecke has noticed that a large number
B2B COMPANIES destination quickly. “You must be able to deliver
on that promise, such as by opening small
distribution centres and service points where
of wholesalers are already on the right track: “It’s
easier for the smaller operations who are more
agile, and that’s much more of a challenge for
customers can collect their orders. Ensuring bigger wholesale companies. Organisational
The role of wholesalers is changing. Whereas they used to be the link between manufacturers and that goods are in the right place at the right agility is key.”
time is a complex process,” continues Van
retailers/contractors, wholesalers are now increasingly becoming service providers. They need to den Broecke. “To implement the necessary More information for wholesalers:
adapt if they are to keep pace with the changing face of wholesaling, and digitalization can help technological change, a company certainly needs manh.com/en-nl/wholesale
a technology-minded board of directors because
them to do so – in the shape of an advanced warehouse management system (WMS) and order you can only achieve all this with an advanced This interview with Pieter Van den Broecke
management system (OMS), for instance. warehouse management system (WMS) and order appeared previously in evofenedex magazine.
management system (OMS). After all, in addition
P
ieter Van den Broecke from Manhattan to get as close to the end user as possible, and How will your customer He selects these to be
Associates is an expert on the changing the traditional role of the wholesaler does not engage with you? Online? delivered directly to his
role of wholesalers. “Traditionally, support that.” Over the phone? In your address.
wholesalers served an important function in depot?
the value chain. They formed the physical link Against that backdrop, it seems that wholesalers Harry knows what he How do you maintain your
between the manufacturers and the companies are in for a very rough ride. Van den Broecke is needs — now he has to profit margin?
selling to end users. That automatically not quite so pessimistic, as long as wholesalers find a way to buy it. When Harry’s material needs
made them a key communication channel for start to take action fast. “If they want to secure a he searches online for the to be in store for pick up
Pieter Van
den Broecke,
manufacturers too, but that role has now been
taken over by the internet. Physical contact is
role for themselves, they will need to be able to
offer the same service, speed and reliability as
QUESTIONS best price means every
supplier is just a click away,
by midday tomorrow. To
do this, your fulfilment
Managing no longer necessary in order to do business.” Amazon – that’s a must. Besides that, wholesalers TO CONSIDER while the demand for fast network has a number of
Director Benelux For example, more and more manufacturers have to ensure they stay relevant by differentiating delivery puts the speediest options. It can drop-ship
and Germany, are in direct contact with end users through themselves not only from their competitors, The success of your fulfillers into pole position. the item directly from the
Manhattan their own online stores. “Moreover, online but also from the manufacturers themselves. wholesale business supplier, source the item
Associates marketplaces such as Amazon mean that end In contrast to manufacturers, wholesalers have depends on your ability Will your customer buy from one of your regional
users can obtain products more quickly and the benefit of physical stores, and they can set to exceed customer from the fastest or the distribution centres or
conveniently. Nowadays, Amazon is used not only themselves apart from Amazon by providing an expectations: are you cheapest supplier? send the item from a local
by consumers, but also by companies that need on-site service centre. As a result, we’re seeing winning at each decision Travelling between jobs, depot.
specific professional supplies. There’s a clear growth in service centres.” point? Harry happens to pass one
trend towards everyone in the value chain wanting of your depot branches How do you fulfil every
Speed and stops to see if the order efficiently?
Additionally, something needs to change in the fence is in stock. Does Harry’s fence arrives in
relationship between the wholesalers and their your service point rep have your depot at 11:00 a.m.
customers. That relationship has traditionally been the tools and information the next day. He collects
a transactional one, but Van den Broecke explains to secure the purchase? the material, knowing he
that it must now become based on emotion: can deliver on his promise
“Even business customers are consumers when What’s the best method of and finish the job with a
they are at home on the couch. They buy goods What does your customer delivery? happy customer.
online, read reviews and appreciate good service. need? Harry pays, and while
They want the same things in their business lives.” Harry, a carpenter, needs he’s there, he also orders Can you deal with
Wholesalers that stubbornly continue to take material to build a fence a number of other items. exchanges and returns as
the traditional approach will not survive, he says. for his customer. Harry efficiently as possible?
“Because others around them will change. Getting needs reliable and accurate Harry needs to return one
as close as possible to the end user means being product information of his purchased items.
proactive. Business customers expect the same and delivery times from A flexible returns process
experience that they receive as consumers, so his supplier to keep his is a benefit to both your
‘fast delivery’ doesn’t mean in three days’ time, promise to the customer. customers and you.
but tomorrow – and preferably even today.”
22 COMMERCE TRENDS - 2019/2020 2019/2020 - COMMERCE TRENDS 23You can also read
