Nike Links RFID to Predictive Analytics for Inventory

Good example of sensors and analytics and transparency in the supply chain.

Nike to marry predictive analytics and RFID to optimize inventory performance
by Tom Ryan in Retailwire plus expert commentary.

Nike Inc. has acquired Celect, a predictive analytics firm founded by MIT professors, to accelerate its ability to match inventories to consumer needs.

Celect’s cloud-based analytics platform allows retailers to optimize inventory across an omnichannel environment through hyper-local demand predictions. Celect’s team will be integrated into Nike’s operations. Its co-founders will continue as tenured professors at MIT, consulting Nike on an ongoing basis.

“As demand for our product grows, we must be insight-driven, data optimized and hyper-focused on consumer behavior,” said Eric Sprunk, Nike’s COO, in a statement. “This is how we serve consumers more personally at scale.”

In a column for Retail Touchpoints from July, Andrea Morgan-Vandome, Celect’s chief marketing officer, wrote that advancements in artificial intelligence and machine learning now provide retailers with a more accurate view of demand across channels to choose the best fulfillment strategy based on product availability, likely demand, capacity constraints, shipping costs, delivery timing and other factors.

At the store level, such insights would reveal that a location seeing high inventory turnover wouldn’t be able to cover walk-in demand if it was also fulfilling online orders. Vice versa, a store seeing slower turnover risks becoming overstocked if it didn’t support online orders.

She wrote, “For each fulfillment decision that needs to be made, advanced optimization can account for the overall margin profitability and customer satisfaction by identifying the immediate payoff versus the long-term opportunity cost — instantly.”   .... ' 

Walmart Testing Bot System to Fill Orders

Robotics continue to advance in fulfilling orders. A considerable move forward in using Bots for consumer goods.

Walmart tests automated system to help fill online grocery orders

Alphabot will retrieve and transport items to employees that package orders.

BY Mallory Locklear, @mallorylocklear in Engadget

Walmart is testing out a new system that will help put together grocery orders placed by customers online. The service lets users order groceries, choose a pickup time and have their order delivered to their car, and the new automated system, called Alphabot, will take over some of the legwork that goes into collecting order items. It will automatically gather certain items from a location's storage area and transport them to employees who will then package the order.

The first Alphabot system will be tested at a supercenter in Salem, New Hampshire and Walmart expects it to be up and running by the end of the year. The company is currently adding a 20,000-square-foot extension to the store, which will house Alphabot and include drive-thru lanes for grocery pickup. ....  "

Online Out of Stocks

One of our key exploration areas.   Including mobile assistance to instore personnel.  How diffiecult if the problem online?   Stronger communications or connections to fulfillment?

Study: Online retailers losing billions in sales to out-of-stocks    by George Anderson in Retailwire

Out-of-stocks are a problem for retailers that may be almost twice as bad online than in stores. That’s the conclusion of new research from the Grocery Manufacturers Association (GMA), which found sites across the globe could be losing billions in sales every year because products aren’t available online when consumers wish to purchase them.

The report, “A Worldwide Study of Extent, Shopper Reactions, and Implications for Non-Food Online Retail Categories,” written by Daniel Corsten, professor of operations and technology and IE Business School, and Thomas Gruen, professor of marketing at the University of New Hampshire, tracked online product availability of baby care, fabric care, hair car, oral care, skin care and shaving products on websites operated by retailers in China, France, Germany, Japan, the UK and the U.S.

“This is one of the first studies on online availability after previous reports over the past decade studying on-shelf availability and its effects on consumer purchasing patterns,” said Keith Olscamp, director of industry affairs and collaboration at GMA, in a statement. “The findings should encourage retailers and brands to collaborate and enhance online availability in the fast-growing area of online retail.”   ... " 

Amazon is Convenience

Convenience and consistency of results.  And over a relatively short period of time, re-setting expectations of delivery and immediate gratification.

How Amazon Delivers on Its Core Product: Convenience
Wharton's Katja Seim discusses her research on Amazon's fulfillment center network.

Podcast

Amazon sells more goods than any one person could count – but the e-commerce giant’s true “core product” is convenience, and how quickly it can get an order from customers’ virtual shopping carts to their real-life doorsteps.

Part of what makes it so easy for Amazon to offer two-day or even same-day shipping to customers is its vast network of distribution centers, which are located across the U.S. and store and ship products to their final destinations. New research from Wharton business economics and public policy professor Katja Seim takes a closer look at how significantly expanding that distribution center network over the past decade has been key to Amazon’s growth strategy.

Seim recently spoke to Knowledge@Wharton about her paper, “Economies of Density in E-Commerce: A Study of Amazon’s Fulfillment Center Network,” which was co-authored with Cornell’s Jean-Francois Houde and Penn State’s Peter Newberry. .... "

Forecast and Fulfillment

Discussion in Retailwire.     This remains a most important question.  The results of forecasts are driven by context, and that is always changing.    Even with large quantities of data.  Is inept forecasting holding back online fulfillment?     by Tom Ryan

Towards Lights-Out Fulfillment

'Lights-Out' used to be a favorite term when we worked in AI applications for the enterprise. Dramatically implying no humans, or lights needed to be involved.    Near total automation is still not here, but is approaching.  Consider the implications.  I note that Amazon now has 341K employees.  
Also it seems that most significant technological change mentioned here has Amazon involvement.   Now well over the tipping point for Influencing broad changes. Towards lights-out.  Keep watching their activity in this space.

Bezos move spurs $20B of growth in logistics robotics
Lights-out fulfillment will be the new norm within a decade   By Greg Nichols for Robotics.  In ZdNet.

This year is turning out to be a tipping point for how companies manage e-commerce fulfillment.

Worldwide sales of warehousing and logistics robots hit a respectable $1.9 billion in 2016. By 2021, according to a forecast by research firm Tractica, the market will hit a whopping $22.4 billion.

To better conceptualize the market explosion underway, consider that 40,000 units of warehousing and logistics robots were sold last year. A projected 620,000 units will be sold in 2021.

Why the change? In short: Amazon. If the last couple Prime Days proved anything, it's that a) Jeff Bezos is allowed to declare national holidays, and b) the investment Amazon made in warehouse logistics when it bought Kiva Systems for $775 million in 2012 presaged a complete transformation in global commerce.  ... " 

Amazon Fulfillment Robotics

On Amazon Fulfillment robotics.   Note in particular the augmentation and cooperation with.  This makes robots better unit resources.

In Wired: " ... Amazon’s robots were invented by a company called Kiva Systems, which Amazon acquired for $775 million back in 2012. With Kiva locked down, a new player wants to give smaller online retail rivals just a bit of that robotic advantage. Locus Robotics is an offshoot of Massachusetts-based Quiet Logistics, a third-party order fulfillment company that gets merchandise out the door for big apparel retailers like Zara, Gilt Groupe, and Bonobos. And the idea behind its bots isn’t just to replace humans, but to create a system where everyone can work together more efficiently. ... " 

Amazon Fulfillment Networks

I am a long time supply chain designer and engineer.  So it was interesting to see how one of the biggest retailers on earth addresses the problem.  In RetailingToday. Fulfillment here, not the same thing as a manufacturer's end to end supply chain, but it turns out also to be very complex.    Mostly a surface description, but with some interesting implications for all supply networks.   And how they evolve.   Also very heavily number driven and leveraged by anaytical needs .