CONFERENCE REPORT
Pascal Jacobs from international logistics service provider Katoen Natie took to thhe stage at the Gobal DIY Summit to discuss how changes in the retail market are disrupting supply chains and how businesses in the home improvement sector can stay ahead
you adapt?’ In his opening address, he says: “The customer today is the one who is leading our supply chain – nobody else. He is only one click away from ordering products from the other side of the world and having them delivered right to his doorstep.” Asking retailers whether they think their supply chain is customer centric and ready for the future, he maintains that businesses need to look at what is happening around them. “Are we organised in a way to match what is happening around us? Other speakers have discussed the big trends but, what is interesting for me, is to look at what effect these influences are having on our supply chain?
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“So we have to go a little deeper and ask what are the main game changers that affect our supply chain that are caused by these strengths?”
He goes on to list five ‘game changers’: 1) Growing volume of direct imports 2) Stock reduction and change of the order profile
3) The multitude of channels we have to deliver to 4) The increasing speed of delivery 5) A different mindset
“The supply chain is upside
down now,” he says. “We have a big consolidation at the inbounds, a fragmentation on the outbounds and everything else is changing. “The
growth
www.diyweek.net of our direct
he title of Pascal Jacob’s talk was ‘Omni-channel logistics – Nobody said it would be e-asy. But how do
SUPPLY CHAIN GAME CHANGERS
sourcing is immense but the real game changer is, in effect, that the total volume that is imported into our countries is spread over fewer players. With the effect that the need for warehouse capacity and handling capacity is exploding.” He goes on to address the outbounds in a supply chain. “We now have a multitude of channels to deliver and every channel has its own particularities – whether we deliver to store, to pick-up point, an office or customer’s home, every channel has a difference. “As a consequence, the order
profile has changed and we are going from high volume with low number of transactions and an easy flow, to a high number of transactions but always low number of volumes and, on top of
that the complexity of these
transactions is increasing. One of our customers has more than 1,000 different customer specifications on his outbounds!” He adds that cut-off
times are
getting later and more responsibility lies with warehouse pickers. “The cut-off times for next-day delivery is 10pm or 11pm. Even same same-day delivery, pre-9am delivery, evening delivery, weekend delivery; and you have all the services around it. Finally, the flows are getting smaller, they’re getting shorter and everything that happens in the
warehouse has a direct consequence on your customer. So, that is why in the warehouse there is a zero tolerance for mistakes. Because every picking mistake you make, has a direct impact on your customer” He explains there needs to be a
tremendous mindset change in the warehouse, adding “in warehouses that deliver to the customer, we use more women – they make fewer mistakes. Sorry men!” He continues: “I see two different worlds. On one hand I see this mobile customer; he’s the master of the universe, he dictates everything and, if he’s not happy, he will just swipe you away and go to one of your competitors. On the other hand I see our industry, which is still pretty much organised in a linear model; a B2B model. Based on long-term agreements where the factory supplied the brand, the brand supplies the retailer and the retailer supplies the consumer and you all try to work out ways to still serve this consumer out of this business model. And, when you do these work rounds, very often they work for a short while but these are no solutions for the long- term because we all complain about the high costs and, at the end, the customer satisfaction is not at the level that you aim it – and neither is the shareholder satisfaction. “ Pascal stresses that businesses
can no longer remain with a linear model. “Forget the way we organise
today – think in another way,” he says. “Simplify your flows – make them much shorter in order to be faster. Re-build your margin doing this and bring convenience to your customer.” In order
to measure success,
consider five factors for a frictionless experience: 1) You need flexible warehouses and flexible handling because of the increasing and changing volumes. Think of peaks and seasonal impacts 2) It has to be agile so you are able to constantly adapt 3) Lowest possible cost
4) Is it long lasting? Do you have short-term solutions? For example, a lot of overflow warehouses are short-term solutions that cost a lot of money 5) You have to do it with the right partners – choose real specialists for the type of services you want to deliver.
He concludes: “You need to find a mechanism that will constantly allow you to adapt that will allow you to regulate your flows, to manage upfront everything that might happen in your supply chain and disturb it because if you do not have this you will not be able to serve your customer and deliver your promises.”
06 SEPTEMBER 2019 DIY WEEK 15
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