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The Impact with the Rise of Omni-Channel Sales on the Supply Chain

Posted by TMW Systems on Oct 24, 2017

Video transcription below:

Jennie Ford:  So there's quite the phenomena taking place in today's trucking landscape, the rise of omni-channel sales is changing the supply chain, what's happening?

James Stevenson: I think if you start and we take a look at what's happened really from a retailers perspective, if you think about it in 1905 and 2005, there really wasn't that much difference in terms of the way that people actually bought goods. You went to a store, you looked at what they had, you bought something, you took it home. If you had a problem with it, you took it back to the store. Fast forward to 2016, 2017, and everything is... The assumption is that you're gonna sit in your living and you're gonna buy it. I think the seven major retail chain closed over a thousand stores last year. So they're struggling to remain relevant, and I think that as they're doing that, as transportation providers, we're gonna have to be able to adapt and change with them in order to provide the services that they need in order to maintain the businesses that they've built over the years.

Jennie Ford:  What does this mean for each stakeholder?

James Stevenson: They have to compete by offering service. So no longer are they offering that in store experience. They have to have the ability from a service perspective to get that customer to come back to them repetitively when there's a lot of other shopping options that they're presented online. So, from a transportation provider, what does that mean for us? That means that we have to be able to be flexible. So, from a flexibility perspective is, as they're offering these different shipping options and maybe I get it delivered from the store, maybe I go buy it online, I get it picked up in the store the next day, all of these things that are happening are driving the transportation provider to provide flexibility to the retailers in order for them to be able to maintain that level of experience that the end consumer's looking for.

Jennie Ford:  All of this is having a profound effect on transportation models, forcing freight carriers to rethink and expand their service offerings, what does the new transportation model look like?

James Stevenson: Well, if you think about what it's been for the last 60, 70 years, you effectively went from the manufacturer to a warehouse or distribution center, from the distribution center to a store, and then the end consumer went to the store to pick the product up. Also, if there was a return process, they took it back to the store. So, what we've effectively done through omnichannel and through the new ecommerce boom is, we've taken that process and now we've kinda disintermediated that store from the process in a large percentage of the shipment. So, you've got an opportunity now where the consumer could potentially get it directly delivered from the warehouse or they maybe even go and pick that up. But in either case, the expectation is, I'm gonna have the ability to go get that within a day or two. So, that changes the velocity with which we have to be able to move the goods through the supply chain in order to be able to provide that experience to the consumer.

Jennie Ford:  James, this doesn't come without new challenges, what are those?

James Stevenson: So, as we start moving away from the full truckload movements, we get into an inherently less efficient model, so now we're seeing more LTL, more parcel, and much higher stop counts on the loads that we're hauling. So, effectively what that does from a shipper's perspective is, we have to now have a much more complex problem that we have to solve, of being able to deliver those goods in a much quicker fashion and we have to provide enhanced visibility at the same time, which is a very challenging thing to do for most organizations, especially with the systems they currently have in place.

Jennie Ford:  Well, how can our viewers thing outside their comfort zone and meet the challenges set forth by this evolution?

James Stevenson: We really have to start with technology. So, the delivery process is evolving into one fluid motion as opposed to a series of independent events. So, from a technology perspective, we have to have a system that was designed and built around the ability to manage a shipping cycle that is getting more and more compressed, while at the same time provide the visibility that the customer and their end customer expects. And while doing that we still have to find a way to make a profit.

Jennie Ford:  That's great. Thanks for joining us. One more thing though, where can our reviewers get more information on this product?

James Stevenson: You can visit the website. There's an on demand webinar, as well as a white paper on the subject.





Topics: Supply Chain, Transportation Technology News Vlog