Executive Briefings

The Rapidly Changing World of Retail Order Fulfillment

John Sarinick, chief sales officer with Beumer Corp., gives us three trends that are driving huge changes in retail order fulfillment, as well as a prediction for the next big thing in the industry.

Historically, retailers have approached automation in their distribution centers from the standpoint of "push" operations, with shipping activity based on forecasts, historical sales and production capacity. Relatively little automation was needed to support that system, says Sarinick.

Now, with the growth of electronic commerce, retail replenishment is being tied much more closely to actual demand, with an eye toward maximizing customer service. "ROI [return on investment] is still very important," he says, "but there's more of a focus on the importance of growth."

Material-handling systems are being embraced as a means of getting product to market more quickly. E-commerce retailers are riding a wave of dramatic growth that's forcing them to adjust, or risk going out of business in a few short years.

Multichannel fulfillment is designed to handle both e-commerce and brick-and-mortar distribution. Ideally, says Sarinick, a distributor should be able to draw from a single pool of inventory, with the flexibility to serve both channels as needed.

The future of distribution-center operations lies in a greater number of smaller orders, with higher throughputs. "The days of being able to manually pick orders at the rates required are coming to an end," says Sarinick. "Having systems that are smarter, faster and more accurate is becoming very critical."

On top of those trends, retailers need to prepare for the next major requirement: same-day delivery. "It's going to be a game-changer," Sarinick says.

To view the video in its entirety, click here


Keywords: supply chain, supply chain management, inventory management, inventory control, global logistics, logistics management, supply chain planning, retail supply chain

Historically, retailers have approached automation in their distribution centers from the standpoint of "push" operations, with shipping activity based on forecasts, historical sales and production capacity. Relatively little automation was needed to support that system, says Sarinick.

Now, with the growth of electronic commerce, retail replenishment is being tied much more closely to actual demand, with an eye toward maximizing customer service. "ROI [return on investment] is still very important," he says, "but there's more of a focus on the importance of growth."

Material-handling systems are being embraced as a means of getting product to market more quickly. E-commerce retailers are riding a wave of dramatic growth that's forcing them to adjust, or risk going out of business in a few short years.

Multichannel fulfillment is designed to handle both e-commerce and brick-and-mortar distribution. Ideally, says Sarinick, a distributor should be able to draw from a single pool of inventory, with the flexibility to serve both channels as needed.

The future of distribution-center operations lies in a greater number of smaller orders, with higher throughputs. "The days of being able to manually pick orders at the rates required are coming to an end," says Sarinick. "Having systems that are smarter, faster and more accurate is becoming very critical."

On top of those trends, retailers need to prepare for the next major requirement: same-day delivery. "It's going to be a game-changer," Sarinick says.

To view the video in its entirety, click here


Keywords: supply chain, supply chain management, inventory management, inventory control, global logistics, logistics management, supply chain planning, retail supply chain