Category Archives: Retail

Market Disruption Forces Supply Chain Change

Market Disruption Forces Supply Chain Change

Despite what the title of this recent article over on Just Style might suggest, market disruption does not drive supply chain change, it forces it. However, the article is right when it notes that having an efficient and fast-reacting supply chain should be a must for any brand or retailer.

The difference is slight, but important. Driving implies there is some guidance to the movement. But the nature of disruption, especially in today’s supply chain, does little to guide an organization that needs to respond, and do so quickly. The organization is forced to change, because failure to do often results in a change in liquidity status from profitable to bankruptcy.

And it’s not just demographic shifts that a retailer or brand needs to react to, but disruptions further down the supply chain. Even if a brand can react quickly to a change in consumer preferences and adapt its main product line to have the look, feature, or ruggedness demanded by its target customer base, if a fire takes out its main manufacturing plant, or a labour dispute cuts off production of a needed rare earth metal, or an act of piracy results in its shipment being stolen, what is the brand going to do?

Organizations need supply chains that can react fast, but they also need supply chains that are informed even faster. In order to react, supply chains need multi-tier visibility into critical product lines, such as the visibility that Resilinc can provide. Otherwise, all the market intelligence in the world on changing consumer consumption patterns won’t do them any good if they don’t see that a critical even in their supply chain prevents them from being able to react accordingly.

DropShip Commerce Brings Drop-Shipping and e-Commerce Enablement to the Distributor and Retailer Masses

On Monday, we announced that BizSlate Just Released its ERP for Mid-Sized Distributors and Retailers that gave the masses a useable, and affordable, ERP solution with exceptional supply chain support — especially where inventory and order management were concerned. With the BizSlate ERP, it’s a breeze for a retailer to order hundreds of variants of dozens of SKUs with a few mouse-clicks and keystrokes and to see inventory requirements at any point in time in the future. And this is great for inventory and storefront management, but what about the e-Store?

As more and more retailers need to turn to online sales to compete in the new marketplace where a consumer can get almost anything she wants online — and do so within two days, as the bigger retailers, following Amazon’s lead, are now packing and shipping same-day if an order is received by the cut-off time — the mid-sized and small retailers have to offer the same convenience or get pushed out of the market. Also, sometimes the only way to survive is to create a unique shopping experience for a niche market and offer all of the products, and only the products, related to that niche through a single, customized storefront. (For example, maybe the way to survive is to cater to the fantasy gaming enthusiast and provide a unified storefront for all of the relevant card games, board games, video games, RPGs, and spin-off/related novels and/or movies when the shopper might normally have to go to a local comic/game shop, book store, and online DVD store to find the items of interest.)

However, this need to both integrate (live) inventory (feeds) from dozens, and sometimes hundreds of suppliers (like Amazon) does, and then parse a customer order into separate orders for each vendor that is supplying an item to you and sending it direct to the consumer through its drop-shipping capabilities poses an integration nightmare for the average e-tailer. The reality is that every supplier will have a different database format / taxonomy and every other supplier will have a different access method. One (group of) suppliers will provide access through an FTP site that will contain inventory exports (in a multitude of raw or compressed file formats), another (group) will provide database access through a secure tunnel, the more technical will provide a web API, and the non-technical will e-mail spreadsheets. Some will use (a variation of) CSV format, some will be on an (old) version of EDI, the more techie will have an XML format, etc. Nightmare!

But this is only a quarter of the challenge. The inventory files need to be processed and the relevant data pushed to the live site, after a human has selected or verified what items need to be pushed. Then, the orders need to be pulled from the live site, parsed, and the proper data pushed back to the suppliers for (drop) shipping in the required time-frame — in the format required by the suppliers.

In other words, today’s small-and-mid-sized e-tailers need a solution that makes it trivial to get inventory manifests (if you will), process those manifest, select (groups of) product(s) for the online store, (create a schedule to) push those products to the store, define rules for parsing orders and pushing them back to the appropriate suppliers (on a schedule), create the requisite e-documention, and push the documents to the vendors and the order management systems.

This is the system that DropShip Commerce provides, and it’s the first solution that the doctor has seen that solves the round-trip mid-market problem in a manner uniquely tailored to the specific needs of retailers and their drop-shipping suppliers. And like the other modern SaaS solutions on the market, it’s slick, quick, and very easy to use. By targeting a specific, relatively unaddressed, problem for a specific vertical (consumer-oriented retail), like BizSlate, they were able to create a unique solution that is just what the average mid-sized e-Tailer needs. The DropShip Commerce solution is definitely something the average mid-size e-Tailer that sources from multiple suppliers needs to check out if they haven’t already.

BizSlate Releases its ERP for Mid-Sized Distributors and Retailers to the Masses

Last fall we introduced you to BizSlate, an ERP for small to mid-size distributors and retailers that is bringing a useable, affordable ERP solution with exceptional supply chain support to the masses. (Basically, it’s doing what Compiere and Made2Manage did for small to mid-size manufacturers.)

As per our our introductory post, the founders, who were with Ezcom software, noticed the (utter) lack of appropriate ERP support for the small and mid-sized retail and distribution space and decided they needed to do something about it. The solution? A new SaaS based ERP system (re) built from the ground up to address the everyday accounting, inventory, catalog management, and order management/e-Procurement requirements of small and mid-sized distributors through a simple web-interface that is as easy to use as most of the new SaaS e-Procurement enterprise systems on the market.

Developed in conjunction with two dozen beta users, as per this VentureBeat article, Version 1 is now launched and is quite slick. As per our last post, the batch create function is incredibly powerful and easy to use. Not only can an administrator batch-create new products by entering all of the base product information, but he or she can select categories, suppliers, locations, terms, etc. from easy-to-use auto-complete pull-downs or from generic saved templates for product type. Extensive profiles can be created in a matter of minutes and hundreds of line items in a matter of seconds.

Order generation is as quick and painless as possible. A user can easily add items to an order through a simple-to-use but powerful search function that allows a user to search by name, code, style, or other attribute values and, as mentioned in the VentureBeat article, order generation can be done on the showroom floor on a mobile (Android or iOS) tablet. As per the batch generation, customer information, (preferred) supplier(s), terms, and other data can be quickly retrieved from pre-populated lists.

And the system even supports a sales order multi-edit capability which allows a user to update information across multiple sales orders (such as ship dates, payment terms, shipment location, etc.) simultaneously and to rationalize orders as need be. For example, if necessary, orders can be combined, split, and individual line items swapped. This is a powerful capability as it negates the need for orders to be cancelled and recreated or items to be deleted from one order and then added to another order, two very error prone processes.

And the rest of the system, which is configured around inventory, logistics, customer, supplier, and accounting management, is quite easy to use as well — and, in some instances, quit powerful. Consider inventory management — searches can include both open stock, pre-packs, and in-transit inventory and be performed with respect to any date. Thus, if a customer doesn’t want an order to be shipped for a week, you can see how many units you will have in a week after all orders scheduled to be received and shipped out over the next week are accounted for. The ability to search open stock and pre-packs together or separately is quite powerful. For example, let’s say a customer wants an order tomorrow, but you don’t have the open stock and if you don’t ship tomorrow, you lose the order. You can search pre-packs, determine that there is enough inventory in pre-packs, send someone into the warehouse to rip the pre-packs open, assemble the inventory and ship — and then replace the pre-packs with an order arriving in two days to be shipped out in the order the pre-packs were intended for that doesn’t have to ship for three days — and get a sale you would likely have missed otherwise.

With regards to inventory, customer, and supplier management — the ability to track the different SKUs used by each customer and supplier for each product and cross-correlate them across the supply chain is quite valuable. This allows you to search inventory and available suppliers off of a customer’s SKU and get complete, accurate information every time.

The document generation functionality was very well thought out — for each customer you can define what should be on the packing slip and invoice in addition to default shipment profiles to facilitate quick order entries. This simplifies the customer’s order verification and invoice processing and can speed up your payments. Similarly, you can specify what information should go on the good’s receipt to the supplier, what information should be associated with the payment, and what information should be matched before payment is issued. This simplifies transaction management for Accounts Payable and minimizes the chances of over-payment or payment for merchandise not received. And the system can even generate customized receiving forms for the warehouse personnel that makes it easy for them to check off items, and easy for whomever is doing data entry to check it off if they don’t have mobile system access.

It’s one slick SaaS solution and if you are a mid-sized retailer or distributor, BizSlate should be on your must-review list.

If You’re Depending on Taft, Then You Are Really Daft!

A recent article in the Supply Chain Management Review that stated the obvious fact that retailers’ supply chains [are] in jeopardy if [the] port strike is not averted noted that the NRF (National Retail Federation) and the RILA (Retail Industry Leaders Association) are calling upon President Obama to engage directly in contract negotiations between the ILA (International Longshoremen’s Association) and the USMA (United States Maritime Alliance) and invoke the Taft Hartley.

Why? The strike, which could take place on December 29, would impact all international trade and commerce at 14 of the nation’s East and Gulf Coast container ports that account for 95% of all containerized shipments offloaded on the Eastern Shipboard.

Should he? I don’t think so. It is Obama’s job to support legislation that opens the borders to free trade and to reach out and begin negotiations with leaders around the world – not to settle labour disputes. It’s not his problem that the West Coast work stoppage in 2002 caused an estimated $15 Billion in losses or that the 8 day work stoppage at the ports of LA and Long Beach last month caused shipping delays for hundreds of millions of dollars of cargo. That is an issue caused by the inability of two sides to reach an agreement, and, to be honest, by the unwillingness of the union to accept that it’s the twenty-first century and adapt appropriately.

As per this article in the LA Times earlier this month, the port strike was part of a bigger fight. The union is not happy with the fact that cargo companies want to cut costs and automate operations to compete with aggressive rival ports in South America and Canada and are fighting tooth and nail to prevent automation to preserve as many of the (extraordinarily) high-paying jobs for their middle-class members as they can. (And these are high paying jobs. An article in the Pittsburgh Post-Gazette back in 2006 noted that the 100,000 members of the two longshoremen unions had an average salary topping $120,000 a year, making them the highest paid blue-collar workers in the U.S. who earned 65% more than an average auto worker at a big three. Source)

While I’m sure the cargo companies and ports are being too aggressive in terms of target cost and job reduction (as transition takes time to be non-disruptive), at this point I’m sure the union is being, at the very least, equally unreasonable. The economy is still in the dumps, the unemployment rate is still close to 8%, and ports North and South of the border are adding enough capacity to take all their business if they don’t smarten up. They average worker is doing a job that could be done by a high school graduate and earning more than I was when I was a Chief Scientist / Chief Architect, that required a PhD. In fact, they earn considerably more than the average software developer or engineer who requires 4-5 years of advanced schooling and 5-10 years of experience to their jobs. I personally think something is wrong with this picture. I’m all about fair pay for fair work, but as they are already getting ridiculous pay for the work they’re doing, relatively speaking, I can’t sympathize with them.

However, while I certainly understand the position of the people calling for the invocation of Taft, I don’t think it’s the President’s job to intervene. If this means a strike is inevitable, then it has to happen. After both sides lose, they’ll come to their senses and strike a reasonable deal.

I know this will probably hurt a number of retailers, but it’s their own fault. Retail, in my view, has been too slow to adopt proactive Risk Management strategies just as they were too slow to adopt e-Sourcing and e-Procurement technology. If a retail chain was actively identifying and managing risk, it’d already be hedging its bets by sending a percentage of its shipments to the closest Canadian, Mexican, or even South American port and then trucking it into the nearest U.S. distribution center so that, should a stoppage (be likely to) occur along the east or west coast, it could just divert all shipments to the Canadian, Mexican, or South American port and not be impacted in the least. To be honest, it’s a shame this isn’t the case for most major Retailers. This is why the ILA and the LWU (International Longshore and Warehouse Union) have so much power. Retailers are not taking appropriate advantage of Northern and Southern FTZs and using foreign ports to mitigate risk. As such, they are depending on TAFT and, in doing so, being really daft. (Especially when, as I pointed out back in September in The Looming Strike Might Cost Billions – But You Don’t Have to Lose a Dime !, Canadian and Mexican east-coast ports are adding capacity hand over fist and ready to take your shipments.)