Why I Chose Supply Chain Management

According to Dr. Robert Hanfield, Supply Chain Management (SCM) is based on two core ideas. The first is that practically every product that reaches an end user represents the cumulative effort of multiple organizations. These organizations are referred to collectively as the supply chain. The second idea is that while supply chains have existed for a long time, most organizations have only paid attention to what was happening within their “four walls.” Few businesses understood, much less managed, the entire chain of activities that ultimately delivered products to the final customer. The result was disjointed and often ineffective supply chains. Supply chain management, then, is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.

I’ll be completely honest, I never once paid attention to how or where a product I was interested came from, I just cared that I received the product at what I felt was a competitive rate. I’m sure most consumers would agree with me. So how did I decide to become a supply chain professional?

My dream job was to become a fighter pilot in the United States Air Force and I pursued this dream.  I commissioned as an Air Force Officer and was selected for a pilot slot to attend Undergraduate Pilot Training. When I thought I was well on my way to achieve this goal, life threw a disqualifying curve ball at me and forced me to reassess my career plans. I vividly remember having a conversation with my commander discussing career paths. He said, “Logistics (Supply Chain), that would be a great career field. There are huge opportunities out there for talented people.” It’s important to note that he was an air mobility pilot so he understood the significance of streamlined operations.

After conducting my own research in the career field, I discovered it was undoubtedly growing.  While I’m still learning the industry, it has already provided plenty of growth opportunity, professional challenges, and has been everything I wanted it to be.

What do you think? Please share your thoughts in the comment section below.

Black Friday and Cyber Monday

Since I’ve entered the supply chain industry, focusing in e-commerce fulfillment, I’ve dreaded Black Friday. Actually, I did everything in my power to avoid belligerent crowds, disheveled stores, and discourteous employees. There are many origins of the history, but I most agree with “Black Friday” indicating the point at which retailers begin to turn a profit, or become “in the black.” It is the day after Thanksgiving and has been described as the busiest shopping day of the year. My entire life I never paid attention to the hoopla surrounding the culture of Black Friday, but as much as I dislike Black Friday, there is something worse…Cyber Monday.

Cyber Monday is the first Monday after the long Thanksgiving Weekend and people are feeling fat and happy. They’ve kicked off their holiday season with their families, but now have to be back at work. So what’s the best thing to do when you’re at work and still recovering from the weekend’s food coma? Shirk…and shop all the online deals at your cubicle. In 2010, comScore reported that consumers spent $1.028 Billion online on Cyber Monday (excluding travel, 2009: $887M), leading to the highest spending day of 2010. The combination of Black Friday and Cyber Monday kickoff the holiday shopping season; however, this time has a whole new meaning to me. This is game time.

At Urban’s Reno Fulfillment Center, we call this “Peak Season” and last year, in literally over a few hours, we saw an incredible increase in demand. The orders poured in and it never stopped. We experienced the high class problem of not being able to keep up with ongoing demand; normal 40-hour weeks became non-existent, and overtime the norm. As a new facility, and with new technology, our processes and equipment hadn’t been proven to operate with high volume. We struggled to meet service level agreements due to unforeseen processing errors and inadequate support on our technologies. Heck, it seemed the building was feeling our pain as improperly installed skylights leaked during torrential rains. Bottom line, I felt unprepared and the teams operated by the seat of their pants. Thankfully, we were able to overcome our woes through simple hard work, determination, and unfaltering effort from everyone within the building.

This year will be different. I strongly feel I am a subject matter expert with our Warehouse Control System as well the Warehouse Management System. I have already leveraged this knowledge to improve our current processes, but I also know we are nowhere near an optimized operating plan. Individually, associates on the floor have incredible production, but it is my responsibility to ensure the team as a whole operates efficiently and effectively. I very much still dread Black Friday, Cyber Monday, and Peak Season, but in 2013, we’ll undoubtedly showcase our talent through our performance.

What do you think? Please share your thoughts about Black Friday and Cyber Monday in the comment section below.

 

“The $20 Buck F*** Up”

Anthropologie’s Spring 2013 Tag Sale kicked off with a bang.  The sale that was supposed to be routine, turned into a business nightmare with significant impact on the customer base, support professionals, and the brand’s reputation.  The sale highlighted a 20% discount on their housewares products, but instead, each item in that product line was marked down to $20.  Now this may not sound noteworthy to those who are unfamiliar with the brand, but a quick Google search of “Anthropologie Sofas” will highlight the expense of their premium housewares.  On Effortless Anthropologie’s blog, customer expressions ranged from being overjoyed to showing immediate concern.  Some were optimistic about receiving their discounted goods and others were apprehensive if they would be charged the true price of the purchased items.  Customers dubbed the mistake, “The $20 buck F*** Up.”  While the customers became disappointed, the business clamored to save the brand’s reputation.

Many consumers only see the face of e-commerce when they shop online.  What they overlook is the architecture behind the scenes to deliver a streamlined “ordered-to-delivered” process.  The brand’s integrity is at stake when they are marketing housewares priced at $20.  An input error made behind the scenes, reflecting the $20 price on their website, is not a simple error to resolve.  Within hours, hundreds of customer orders were placed reducing the amount of inventory available.  The time (and labor) needed to alleviate the situation was intensive and required a holistic approach by all support functions within Anthropologie.  The Customer Call Center was contacting numerous customers regarding the error made and IT teams were scrambling to make sure wrong orders were stopped while still being able to process correct orders.  The biggest lesson learned about this mistake was how it directly affected me.

Urban’s Reno Fulfillment center satisfies customer orders placed online and I am responsible for making sure orders are properly fulfilled within a timely period.  I am given tools to analyze customer demand and I must manage the labor required to meet daily production goals.  On this day, and after evaluating customer demand, my analysis concluded the daily demand was light and we were overstaffed.  We had just gone through a hellacious week requiring overtime and members of the team were looking forward to having an early day.  What happened next was unbelievable.  I had just left the production meeting, approved a few people to go home for the day, and started to reassess customer demand.  In a span of less than 30 minutes, more than 3,000 new customer orders showed needing to be processed.  Demand was now heavy and our numbers were decreased.  I later learned all Anthropologie orders were put on hold until the issue was resolved and releasing these orders was what drove demand.  Needless to say, I was tremendously impressed and applaud our outbound teams as they were able to process a significant portion of the demand before the end of shift.  The company had several lessons learned on this costly mistake, but communication between all segments is a must.

What do you think? Please share your thoughts in the comment section below.

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URBN: The Brands

Urban Outfitters has been a successful retailer since its inception in 1972.  It originally started focusing on “funky” fashion and household products, but has developed to include vintage apparel and luxury brands with several designer collaborations. What may be unknown to most consumers is that Urban Outfitters Inc. may be the parent company, but there are very distinctive brands under the parent umbrella. These brands are the most significant reason of success and Urban being sling-shotted to become the fastest growing internet retailer to date.  Each brand is both compelling and distinct and chooses a particular customer segment, and once chosen, sets out to create sustainable points of distinction with that segment.  The brands under Urban Outfitters, Inc. are Urban Outfitters, Anthropologie, Free People, BHLDN, and Terrain.

Urban Outfitters
Urban Outfitters seeks to target the educated, urban-minded individual between the ages of 18-30.  Their product base includes contemporary art, music, and fashion.
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Anthropologie:
Anthropologie is a lifestyle brand that imparts a sense of beauty, optimism and discovery to the customer. For her, Anthropologie is an escape from the everyday; it is a source of inspiration and delight, where innovative merchandising, customer centricity and a curated array of products come together to create an unimagined experience.  The stores do not focus on one category of goods, but on disparate merchandise that’s centered around a theme.  Anthropologie’s buyers travel the globe for interesting, relevant and unusual items for its core customer.

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Free People:
The Free People girl is happy and she loves life.  She is described as independent yet loves being with her friends and family.  She’s the type to travel to festivals such as Coachella with Wanderlust being her favorite.  She is the ultimate mix of sweet, cool, boho and everything in between.

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BHLDN:
Unveiled Valentine’s Day, 2011, BHLDN offers brides, party goers, and party throwers an inspired alternative for life’s most anticipated milestones. Catering to a small coterie of smart, creative women and focused on personalization, BHLDN goes beyond the wedding dress — bringing together inspiration, community, and a compelling, original product assortment

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Terrain:
Founded in 2008, Terrain transforms the local garden center into a celebration of nature. Inspired by the idea of merging house and garden to create an experience for the senses, our garden centers in Glen Mills, Pennsylvania and Westport, Connecticut cater to our customer with a curated assortment of plants for all seasons, as well as inspired items for the home and garden.

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What do you think? Please share your thoughts about Urban Outfitter’s distinctive brands in the comment section below.

Advanced Warehouse Technology

As a young supply chain professional, I have had the opportunity to visit local distribution and fulfillment centers within the Reno-Tahoe basin. The most unique element of my experience was the vast difference between material handling technology used from one facility to another. I will freely admit Urban Outfitter’s Fulfillment center was my first exposure to the industry and I assumed competitors used similar technology. Boy was I wrong.

Material handling equipment can consist of transport conveyance and totes used to carry product from one location to another. In a visit to Toys R Us, I was amazed by their Kiva System where a network of lawn-mower-sized robots, capable of lifting 1,000 pounds, brought product to you. Traditionally, a floor associate completes manual picks through an optimized travel path, but the Kiva system brought individual units to a packing associate, who then fulfilled customer orders. Additionally, their Kiva system was combined with an integrated pick-to-light system ensuring their pick and pack processes were nearly fool-proof.

As impressed as I was with the Kiva system, I am still very much spoiled with the “toys” at Urban Outfitters. Urban Outfitters selected Vanderlande Industries to deliver the innovative solutions needed to meets its challenging logistics model. They developed state-of-the-art picking and sortation technologies, specifically designed and optimized for the Direct-to-Consumer market. The material handling system is managed by Vanderlande’s VISION Warehouse Control System and is integrated into Urban Outfitters’ Manhattan Associates Warehouse Management System. The Vanderlande solution offers a faster return on investment and the new warehouse process will bring significantly improved performance in terms of operating costs, efficiency, and customer service levels.

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What do you think? Please share your thoughts between the two systems in the comment section below.

Urban Outfitter’s Reno Fulfillment Center

Reno Flfillment CenterAccording to Internet Retailer, when it comes to online sales growth among major retailers over the past decade, the winner is not Amazon. Urban Outfitters Inc. tops the charts as the fastest growing internet retailer. Since 2003, Urban Outfitters experienced colossal growth within their e-commerce segment and revealed a 9,000% jump in web sales, compelling the organization to develop their supply chain to meet customer expectations. Urban’s increased customer demand required the development of a new fulfillment center to improve the customer experience regarding internet-based demand. In the fall of 2012, Urban Outfitter’s Reno Fulfillment Center became fully operational and began satisfying customer orders.

The Reno Fulfillment Center is considerable at 460,000 square feet and is equipped with state-of-the-art transport conveyance and sortation equipment. When determining solutions for warehouse automation, The Executive Director of Logistics for Urban Outfitters stated, “Vanderlande Industries demonstrated that they clearly understand complex logistics challenges, and are able to design appropriate solutions through mixing and matching their proven sub-systems, and are able to provide full scope integration.” In addition to the sortation and transport equipment, the facility also contains an Accutech Apparel Autobagger capable of producing 800 single-item customer orders per hour.

The facility is still within its infancy, but the design of processes within the building, in addition to modern warehouse technologies, easily sets the building up for success. While the technology gives the facility some advantage over its competitors, I truly believe it does not give long term sustainable advantage. For long-term sustainable advantage to be attained, an organization cannot simply purchase new technology. There are minimal barriers preventing competition to acquire similar equipment. Only time will tell how greatly successful the Reno Fulfillment Center investment will become.

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