How Automation Transforms the Meaning of Retail Warehouse Management
I hear a lot of talk about the ways retail enterprises can improve warehouse efficiency, and often there's a basic problem with the discussion: the definition of warehouse is too narrow.
To many, warehouses are buildings where you keep your product. They're the places filled with pallets and forklifts and trucks coming and going. But if your supply chain is where it should be, the definition of "warehouse" is a much bigger concept. If a retail supply chain is automated the right way, the warehouse is wherever your materials or products are right now. That could be aboard a ship or aircraft or on trucks headed to customer outlets.
With tracking technology, your organization has the benefit of total command visibility. The entire retail supply chain becomes your warehouse, and the physical structure you used to think of as your warehouse becomes only one part of a larger picture.
I call that the interactive supply chain. It means taking your specific point-of-sale information and your business analytics and actually applying them to maximize your profit, all the way down to the store level.
Voyage of the Red Dresses
Let me explain what I mean by giving an example of a supply chain with no command visibility. Take a large department store chain. Let's say someone has designed a really great red dress.
So, the design goes out to somewhere in China. Someone manufactures it. Well, the company doesn't have visibility into China. It just knows that someone is going to make the red dresses. It doesn't even know how many. Eventually, the manufacturer gets all the red dresses and it boxes them up and puts them on a ship. The company still has no visibility.
There's no visibility until the ship comes into port. Next, there's a distribution issue because the dresses are going to a distribution center, and they need to get those dresses out to all its stores. So the retailer puts 100 dresses in each store.