The Supply Chain of the Future – Tomorrow's Vision or Today's Reality?
Join Intel as we provide insight on how the Internet of Things will continue to transform key supply chain elements.
Most Read Articles
More retailers to merge store, online inventory
An increasing number of retailers will choose to integrate the distribution operations for their bricks-and-mortar stores and direct-to-consumer businesses. That prediction came from Dan Whitnable, an engineering manager at Lands' End, the purveyor of clothing and home goods that began as a mail-order catalog and has since branched out to include online sales and retail shops in its parent company Sears' stores. Whitnable made his forecast in a keynote address at the North American 2010 Material Handling and Logistics Show in Cleveland, Ohio, USA in April.
The need for inventory reduction will drive this integration, creating a common pool of stock for both types of retail operations, Whitnable said. "Increased sales and margins are also driving this consolidation. Having a common pool of inventory that I can flow between both channels makes a lot of sense," he commented.
As more retailers service both types of business in their warehouses, their distribution operations will have to be redesigned to handle both store and direct-toconsumer shipments. As a result, they may have to make such changes as repackaging goods that originally were intended for the retail shelves so they can be used to fulfill individuals' orders.
Along with accommodating different order types, distribution centers may have to adopt new metrics to measure performance. In the past, retail distribution centers were evaluated based on lineitem utilization. An integrated distribution center, by contrast, will have to judge work activity on metrics that measure performance relative to "eaches," Whitnable said.
Join the Discussion
After you comment, click Post. If you're not already logged in, you will be asked to log in or register.
We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 2010: More retailers to merge store, online inventory"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.