Supply Chain Insight | Issue One

SupplyChainInsights News, Trends & Technology for APAC Supply Chain Leaders

Issue One

The Changing Face of eCommerce

June 2021

Learn how TMX is helping develop TTI's new $200 million automated distribution facility

Contents

Welcome

About The Magazine

Welcome to the first edition of Supply Chain Insights Magazine - your primary source of industry news, focused on innovation, technology and knowledge-sharing in the logistics sector.

Published quarterly to a circulation of 20,000 + industry professionals across Australia, New Zealand and the wider Asia-Pacific region, Supply Chain Insights Magazine is focused on helping you solve the complexities of today's supply chain. Going forward the digital magazine will highlight latest trends, operational strategies, technology advancements and best practice within the logistics industry.

In our first edition we tackle the issue of “The changing face of eCommerce fulfilment,” including an in-depth look at the challenges retailers face with meeting the growing demand for online shopping and how instore and online fulfillment models are having to evolve to better service the demands of the digital consumer.

We take a look at how Australian consumers are pushing for contactless shopping following COVID-19 and how leading Australian online book retailer, Booktopia, is shipping stock faster and

easier with an advanced automated mobile computing solution. Readers can also read how Super Retail Group reduced their fulfillment costs with the flick of a switch, along with learning four essential steps to optimise eCommerce fulfilment for workflow efficiency and how TMX is helping develop TTI's new $200 million automated distribution facility.

We hope that you enjoy the first edition of our magazine and look forward to hearing your feedback!

For more information or story suggestions, please contact: editor@supplychain-insights.media For advertising enquiries, please contact: advertising@supplychain-insights.media

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Contents

In This Issue

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The Latest Insights

eCommerce Boom Drives Demand for Sustainable Supply Chains

How MicroFulfilment is Re-shaping the Australian Supply Chain in 2021

4 Essential Steps to Optimise eCommerce Fulfilment for Workflow Efficiency

Analysis

Analysis

News

6 The Changing Face of eCommerce Virtual panel

8 Australian Consumers Push for Contactless Shopping Following COVID-19 Industry Update

Anaysis

13 Welcome To The eCommerce Age Feature

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22

Booktopia Ships Books Faster and Easier with Zebra’s TC8000

Modernising Aramex for Greater Agility and Innovation

Industry Update

Industry Update

25 Enhance your Supply Chain and Boost your Customer Experience Analysis

27 The Importance of Last-Mile Delivery in eCommerce Industry Update

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News

News & Insights Super Retail Group Reduces Fulfilment Costs with the Flick of a Switch Online sales of home fitness and outdoor leisure exploded in Australia in 2020, resulting in Super Retail Group increasing eCommerce sales by 87 percent to $237 million in the second half of 2020. In an effort to meet this surge in online orders and meet their customer promise around delivery, the company fast-tracked the rollout of a new omni-channel solution with Manhattan Associates in an innovative, socially distanced manner.

Super Retail Group’s previous online order fulfilment system allocated orders based on proximity to customers, without considering the true cost to fulfil. As a result, more than 20 percent of home delivery orders were shipped interstate at a higher cost, despite the company having the items in stock in the state. Additionally, more than 15 percent of home delivery orders were split into multiple packages, which also increased fulfilment costs.

“When COVID-19 fully hit and many businesses were consolidating projects, we actually sped up the deployment of

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Manhattan Active Omni, and it now offers us a single window of visibility and availability of stock across our entire supply chain network.” explained Brian Townshend, Super Retail Group’s general manager of omni-retail.

“The cloud-based Manhattan Active Omni solution is highly adaptable and responsive. Even implementing it virtually and operating throughout the challenges of COVID-19, the new system has been able to accommodate major order and fulfilment routing changes within minutes.

With the new system, we were able to change our fulfilment logic and immediately reduce fulfilment costs – even achieving our 12-month goal on day one, which is a remarkable result,” finished Townshend.

The Manhattan Active Omni Solution is highly responsive and can accommodate major order and fulfilment changes within minutes. This was critical for Super Retail Group when the state of Victoria went into a COVID-19 lockdown in 2020, allowing the company to change its fulfilment logic so that orders that were going to be shipped out of Victoria were stopped and re-allocated to other sites within minutes. The new system also allows Super Retail Group to deploy a ‘site outage’ action for both its DCs and stores, so that if any site is unable to trade (such as due to a positive COVID-19 test or other reasons) the company can quickly close that site and redirect order activity to be fulfilled elsewhere.

“We would like to congratulate Super

Retail Group on the great work and results they have achieved during a challenging 2020. We know at this particular time just how important it is for this leading Australasian retailer to be able to get the best local and international brands to its customers as quickly as possible, whether it’s via delivery or click and collect,” added Raghav Sibal, Managing Director of Australia and New Zealand for Manhattan Associates.

“To roll out Manhattan Active Omni virtually during COVID-19 and then immediately see these excellent results is testament to not only the power of our cloud solution, but also the expertise of our team, as well as the strong partnership between the two companies,” ended Sibal. ●•

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News

Rackspace Elastic Engineering Launches in Australia Rackspace Technology has launched a new service model designed to help supply chain customers build and operate modern cloud environments in Australia.

While traditional cloud managed services are fixed scope and focused on infrastructure operations, the new Rackspace Elastic Engineering solution delivers on-demand access to a dedicated Pod of nine highly skilled cloud architects and engineers. A supply chain organisation’s Pod will work alongside their own internal team in an agile, sprint-based model to drive innovation, modernisation and transformation initiatives going forward. Customers would always work with the same Pod familiar with their team and environment, allowing the Pod to

serve as an extension of the organisation’s own team.

“Supply Chain customers gain the most from cloud technologies when workloads, teams and processes are transformed to a more cloud native and agile operating model.

Traditional managed services struggle to deliver in these environments due to inflexible scope and contract structures,” said Tolga Tarhan, Chief Technology Officer, Rackspace Technology. “Rackspace Elastic

Engineering combines our unmatched operational expertise with flexible, modern, cloud native engineering services.”

As more supply chain organisations embrace a cloud native approach, their teams are increasingly transforming toward DevOps-focused operating models. With DevOps approaches, the boundaries between infrastructure and applications and “build” and “operate” have become increasingly blurry. At the same time large, monolithic outsourcing contracts are unable to provide flexibility for modern cloud adoption, leading to stagnation and inefficient use of cloud technologies. In response to these trends, organisations are demanding more customised engineering and operations capabilities from their partners.

Recognising these shifts, Rackspace Elastic Engineering delivers a new model for an ongoing partnership with customers.

Rackspace Elastic Engineering will support all three major public cloud providers, Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). ●

News

TTI commits to $200m facility to future-proof their business A new $200 million state-of-the-art distribution facility is to be established by multinational manufacturer Techtronic Industries (TTI) at Australia’s first industrial community The YARDS, in Kemps Creek, Western Sydney.

TTI is a fast-growing world leader in power tools, accessories, hand tools, outdoor power equipment and floor care products, with worldwide brands such as Milwaukee, Ryobi, AEG and Hoover. The company will consolidate its two existing facilities in NSW into one 73,920 square metre premium distribution centre at the strategically located industrial precinct.

“We are continuing to expand rapidly and need a new facility to support our future growth. By consolidating our existing sites into this new state-of-the-art distribution centre, we will be able to meet our future needs, while optimising our supply chain to the benefit of our retail partners and end users of our products,” said Grant Edhouse, Chief Financial Officer and Chief Operating Officer of TTI.

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Key features at TTI’s new distribution facility will include a goods-to-person automated mini shuttle system, Very Narrow Aisle (VNA) racking storage, drivearound truck access and market leading sustainability measures. The facility is targeting a Green Building Council of Australia 6-Star Green Star rating.

TMX secured the 10-year lease term for TTI after undertaking an operational review of TTI’s existing operations, designing the future facility and procuring the property solution and internal fit out. TMX will now project manage the delivery of the new purpose-built solution through to operational go-live.

Jack Moroney, Director of TMX who negotiated the transaction says, “Our supply chain team undertook a comprehensive

review of TTI’s operations to establish a robust business case and designed a flexible supply chain solution that supported TTI’s future growth while optimising their current business performance. We were able to go to market with certainty that all of TTI’s bespoke needs were included within the base building definition. This will ensure TTI can adapt their new warehouse to meet any changes their business is faced with.”

The YARDS is a new $1 billion premium industrial precinct under development that is set to become a new benchmark in Australian industrial development, and cement the region as a key distribution hub.

In total, The YARDS will accommodate around 400,000 square metres of nextgeneration sustainable warehouse and logistics facilities, in addition to onsite amenity for workers and the community. It’s expected to generate over 3,500 jobs during construction and after completion.

TTI’s site at The YARDS is expected to be operational in July 2022. Development of the precinct is being undertaken by Frasers Property Industrial, Aware Super and Altis Property Partners, with construction having commenced in April 2021. ●

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News

The Changing Face of eCommerce Virtual Panel

You can watch this exclusive gathering of industry thought leaders simply by clicking the link on this page: The Changing Face of eCommerce, presented by Supply Chain Insights magazine (YouTube)

In May, renowned technologist and industry speaker, Dez Blanchfield, hosted an expert panel on behalf of Supply Chain Insights Magazine.

The interactive and insightful panel discussion considered the topic of "The Changing Face of eCommerce" and covered everything from fulfilment locations, to hardware requirements, all the way through to software and infrastructure.

The panellists for this event offered some fantastic takeaways and actionable insights that any organisation in the retail or supply chain space can benefit from. Insights included:

• How the total cost of supply chain changed due to COVID-19 - including the cost to fulfil

Zebra Technologies boosts Worker Productivity with Personally Assigned Wearable Mobile Computers

personally assigned to employees, the devices are ideal for both large, global companies and small to medium businesses, offering continuous on-the-go support, empowering efficient connectivity between workers, improved business activity and responsiveness to changing work conditions.

The EC5x series features a familiar android operating system and sleek smartphone look and feel, as well as advanced business capabilities including enterprise-grade scanning, 13-hour battery life and an enhanced Wi-Fi range. The versatile device empowers frontline workers in numerous industries, including retail, hospitality, field sales and ancillary healthcare, and can be simply placed in a pocket or transformed into a larger workstation.

Compared to consumer smartphones, the EC5x offers a far longer lifecycle of four years, unmatched durability, extended security protection and an expanded software suite, ensuring the same device can be deployed well into the future as

Zebra Technologies unveils its latest EC5x series, a new category of individually assigned mobile computers developed to boost worker productivity and enhance connectivity and customer experience relationships across multiple industries.

Designed to be company-owned and

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• How companies that designed their supply chains too lean were impacted by market disruptions over the past 12 months • The importance of and how to build resilience within your supply chain

The expert panel for this discussion included: • Travis Erridge: Co-Founder & CEO, TMX • Chris Buckthorp: Director of Professional Services at Manhattan Associates • Royston Phua: Vertical Practice Lead APAC Supply Chain, Zebra • Matthew Heap: Head of Solution Architecture APJ, Rackspace

businesses grow.

In turn, the devices significantly improve front line workflows such as assisted selling, mobile point of sale, inventory and task management, and direct store delivery.

The EC5x series solidifies Zebra’s leadership position in the mobile computing market, and further strengthens its portfolio of Android 10 devices. More details on the EC5x can be found here. ●

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Industry Updates

Australian Consumers Push for Contactless Shopping Following COVID-19 New research has revealed that Australians desire contactless shopping, delivery and collection options following COVID-19. The research shows that nearly 60 percent of Australian shoppers are more likely to purchase and collect retail goods without human interaction such as online ordering for contactless click and collect, compared with before COVID-19.

The research project undertaken by Manhattan Associates, found that only 28 percent of shoppers desired the same level of direct human interaction when shopping as they did prior to COVID-19. Of those respondents who desired contactless shopping, 57% percent of people were likely to buy online for home delivery, 18 percent would buy online and collect from a contactless parcel collection point, while 7 percent of people would buy online for contactless curb-side pick-up.

“Australian consumers’ shopping habits have fundamentally changed following the arrival of COVID-19.”

They want less direct human interaction and more flexibility in the way that they shop, collect or receive their goods, that is much more varied than traditional models of instore purchasing,” explained Raghav Sibal, Managing Director, Manhattan Associates.

“This shift in buyer behaviour can be attributed to not only perceived health concerns following the impact of COVID-19, but also a positive customer experience of the increased flexibility that retailers have offered shoppers in 2020. The findings have significant implications for local retailers who must offer greater flexibility to meet varied consumer preferences.”

In addition to desiring less human contact, shoppers also indicated that they were more likely to participate in sales

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campaigns than before COVID-19, with 71 percent of people saying that they are now more likely to purchase goods from events like Boxing Day sales and click-frenzy.

People that are looking to purchase from a sales event in the future are mainly likely to do so because they have less money to spend on essential goods (32 percent), or are looking for a bargain (38 percent), while only 11 percent of people will be participating in a sales event to make an indulgent or luxury purchase. In any sales, shoppers indicated that they were most likely to purchase clothing (70 percent), followed by electronic equipment and household goods (44 percent), such as refrigerators.

“Given the financial impact that COVID-19 has had on many Australians, it is not unexpected that they would turn to sales events to make their finances stretch further.

“Retailers need to be prepared for spikes in sales activity around these events and take control of their inventory with realtime visibility of stock, whether it is in the warehouse, in-store or being transported.”

By knowing what goods they have, and what they may need to build stock up on for future sales events, retailers can position themselves to take advantage of sales and offer the best possible customer experience.” ●

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Analysis

eCommerce Boom Drives Demand for Sustainable Supply Chains WRITTEN BY JAMIE DIXON, DIRECTOR SUPPLY CHAIN, TMX

The Coronavirus pandemic triggered a shift in the retail landscape, altering the consumer buying experience and speeding dramatic growth in eCommerce. As retailers benefit from strong consumer demand and a colossal increase in online sales, more needs to be done to control emissions within supply chains.

Increased growth of deliveries is driving up the use of last-mile delivery vehicles due to inefficiencies, resulting in trucks running empty. The transport and logistics sector needs sustainable supply chains not just for corporate governance and operational savings, but for retaining customers who are becoming more environmentally conscious.

Road to resilience The role of technology in transport and logistics has evolved significantly over the past decades, with GPS systems playing a crucial part in delivering efficiency gains in the delivery process.

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GPS is a great entry-point for logistics operators that want to reduce their carbon footprint.

GPS-enabled tracking and routing systems that see a delivery truck transmit its location to a central terminal at the dispatcher level, means that vehicles can be dynamically routed to avoid traffic jams. This results in a reduction in time spent on the road, operational and maintenance costs, and carbon emissions.

The less time that a delivery driver is spending in their vehicle, the less time they are producing carbon (and increasing costs to your logistics operation.)

Having drivers report traffic issues to dispatch means that updates to the GPS units of other drivers can be processed, and areas of high congestion can be avoided.

The cost of implementing a system of dynamic routing is minimal in terms of both hard and soft costs. Soft costs, in this context, refer to the cost of software and dispatcher training.

While GPS technologies are not new to the industry, never has the move towards technology occurred so quickly or dramatically as in response to COVID-19. Many operators have taken up route optimisation to improve customer experience and reduce carbon footprint. Others have considered the type of fuel they use.

ECommerce has put an immense pressure on last-mile logistics, with customers placed as top priority. But what happens when customers don’t

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The big challenge Senior supply chain executives face sustainability issues daily as they look to ensure their organisation’s activities are aligned to the expectation of shareholders, including internal and external stakeholders.

Having the capability and metrics in place to identify and communicate social, environmental and economic achievements is paramount to embedding sustainability thinking within an organisation. Some overseas organisations have the added challenge of complying with legislative requirements. Therefore, setting the right targets is crucial, including making emissions a critical KPI for companies.

Measuring the effectiveness of green supply chain strategies can be highly complex. As a starting point though, most organisations should be able to simply record the amount of kilometres driven as part of their transportation programs, and measure the subsequent reduction of cost and driver time to demonstrate a reduction in carbon emissions.

Supply chain strategies should enable businesses to exceed sustainability ambitions across logistics functions, designing solutions that are practical and adaptable to meet environmental goals and targets in line with customer, shareholder and community values and expectations. quite understand the difference between cheap and fast deliveries to sustainable supply chains?

As operators raced to deliver order volumes over the Christmas period, the question remained whether cost to service was being covered. Those who can optimise their costs are more likely to reduce their carbon footprint.

Concerns for shoppers According to Australia Post’s 2020 eCommerce Industry Report, the key concerns for online shoppers are sustainable packaging and delivery, returns policies and processes, and additional costs such as shipping, taxes and duties.

Almost half of the respondents want recyclable packaging, and nearly 30 percent prefer carbonneutral delivery. Some 28 percent are willing to wait longer for delivery to reduce environmental impact.

To help address some of the key concerns that shoppers have today, progressive logistics operators can utilise the process of reverse distribution to build on their bottom line and improve their green credentials. Some logistics operators may be running at a percentage of their full storage capacity. In these instances, using the extra capacity to collect, transport and store goods that can be used again in supply chains can produce real benefits.

Utilising extra storage space in a truck to transport packaging that can be reused multiple times would offer environmental and costs savings to the business.

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The new normal

As businesses have been forced to adopt new ways of working – from just surviving the pandemic to truly thriving, a learning curve might just become the springboard for 2021.

It’s unlikely that the explosion in online shopping and B2C is going away any time soon. Leading companies need to find ways to become more efficient and adapt to the new normal; they need to understand the full cost of servicing orders and consider adapting their logistics profile from a large warehouse to multiple smaller ones in order to deliver goods on time. Global eCommerce giant Amazon in the US has led the way with this.

Industrial parks across Australia have been incorporating sustainable practices in their facilities for a while now, which is driving green initiatives in the industrial property market. Many have been investing in solar panels and water recycling plants among other environmentally-friendly initiatives in industrial property, which is ultimately reducing carbon emissions.

As the pandemic has pushed the industry ahead by around five years, turbocharging the growth of online retail, now’s the time to take charge of sustainable supply chains. ●

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Industry Updates

Booktopia Ships Books Faster and Easier with Zebra’s TC8000 As Australia’s leading online book retailer, Booktopia dispatches more than 3.3 million parcels annually to its customers across Australia and New Zealand. During peak periods, the online retailer has shipped 41,800 units in a day. Booktopia’s technology decisions are focused entirely on enabling it to efficiently ship a high volume of books from its warehouse to fulfil orders and maintain outstanding customer service.

As Australia’s leading online book retailer, Booktopia needed to uphold its reputation by deploying sophisticated and productive technology at its 13,000 square meter warehouse. When the incumbent, dated Windows CE mobile technology threatened the efficiency of Booktopia’s picking and put away operation, the company needed a solution that would complement its custom warehouse management system (WMS) and give it the flexibility to innovate.

Importantly, Booktopia required a solution that would also improve staff satisfaction, and therefore boost efficiency and productivity of its warehouse operations.

In 2020, Booktopia engaged with Zebra Technologies Corporation, to deploy Zebra’s TC8000 touch mobile computers, an android-based mobile computer with fast scanning capabilities.

“With work shifts stretching up to four consecutive hours per shift, our frontline workers needed mobile computers with a dependable battery life and scanning accuracy,” said Tim Rimington, Infrastructure Manager at Booktopia. “Additionally, we needed mobile computers that were rugged, lightweight, ergonomically-designed and easy to use. We were delighted that Zebra’s mobile computing solution fulfilled these requirements.”

Is this the way of the future?

According to Zebra’s Warehousing Vision Study, forward-thinking companies like Booktopia are turning to technology to cope with the growth of the on-demand economy.

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“Up to 77 percent of them agree that equipping their workers with technology is the best way to introduce automation in the warehouse”, said Tom Christodoulou, Regional Director of Australia and New Zealand, Zebra Technologies.

The Future - Improved productivity, accuracy, staff satisfaction and potential to innovate Zebra’s TC8000 devices will continue to enable high productivity levels and staff satisfaction across Booktopia’s warehouse operations. By leveraging on Zebra’s TC8000, Booktopia joins the 77 percent of forward-thinking companies that are equipping their workers with technology

to achieve better results. They will boost Booktopia’s capacity to process orders in greater volumes and see it remain a market leader in eCommerce.

As an entirely online retailer, Booktopia is reliant on technology for its success, and must stay ahead of the technology curve.

The next step for Booktopia is wearable devices. These will produce greater time savings than handheld mobile computers.

Booktopia has invested over $20 million dollars in automation solutions across its warehouse, and the company plans to increase investment in the next few years. ●

See Zebra’s TC8000 in action at Booktopia here.

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Feature

Welcome to the eCommerce age As eCommerce volumes in Australia continue to soar, retailers are tasked with adapting their instore and online fulfilment models to better service the demands of the digital consumer. Supply Chain Insights analyses this shift and takes a deep dive into the new era of fulfilment.

Throughout last year, the pandemic was a catalyst for major changes in human behaviour. The way we work, travel, communicate and shop has fundamentally changed.

Stay-at-home directives to curb the spread of COVID-19 led to billions of people around the world remaining indoors throughout 2020. From remote learning, to team meetings, to gym classes – people’s lives moved online overnight.

This profound shift in the way we live has also changed the way we consume. Data released

by Australia Post has revealed Australian online shopping reached an all-time record high in 2020, with online purchases growing 57 percent year-onyear.

Four in five households in Australia bought something online in 2020, and 1.36 million Australians shopped online for the first-time last year.

All of a sudden, consumers across the nation became very comfortable making purchases online.

While the pandemic fuelled the rapid uptake of eCommerce, this dramatic shift in consumer behaviour is yet to show any signs of slowing down.

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“During COVID-19, a significant amount of Australian online shoppers were first-time eCommerce customers. This will have a lasting impact on their behaviour as they get used to the ease, value and benefit of shopping online,” Raghav Sibal, Managing Director – Australia and New Zealand at Manhattan Associates says.

Travis Erridge, Co-Founder and CEO at TMX agrees, and says the impact of COVID-19 on online shopping in Australia is irreversible. “People are increasingly time poor and have very quickly got used to the convenience of shopping online,” he says.

The sudden acceleration in eCommerce volume in Australia saw the market jump five years ahead in terms of previously predicted growth. Raghav describes this as “chaotic” and says for a number of retailers, it was like drinking from a fire hose.

With more parcels moving through Australia’s infrastructure and logistics networks than ever before, retailers and third party logistics providers (3PLs) are faced with the challenge of transforming their distribution networks to meet the expectations of a new breed of consumer.

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Title

Online purchases grew 57% year on year in 2020 Four in five households in Australia bought something online in 2020 SUPPLY CHAIN INSIGHTS

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Feature

“Some of the most successful retailers during the pandemic were those who could leverage their store network to fulfil orders.”

RAGHAV SIBAL, MANAGING DIRECTOR, AUSTRALIA AND NEW ZEALAND, MANHATTAN ASSOCIATES

The shift to direct-to-consumer According to Travis, the customer experience is fundamental to the success of any eCommerce fulfilment operation. However with much of the workforce still based at home, offering consumers convenient ways to receive their online orders has been easier for retailers.

“There is a serious concern among retailers around how they are going to keep this level of customer service up. How are they going to hit delivery windows and keep their operations profitable when the working world returns to the office?” Travis asks.

A supply chain designed to service the eCommerce market needs to keep the customer experience at the forefront.

However, developing a logistics network that can service multiple channels of fulfilment is extremely challenging. “It takes a flexible mindset to be able to deliver to a B2B store, a B2B marketplace and direct to a consumer’s home or workplace,” Travis says.

Tom Christodoulou, ANZ Sales Director and General Manager at Zebra Technologies echoes this view, and says distribution centres need to be designed to process orders effectively and efficiently more than ever before.

This distinct shift has thrown previous distribution strategies into disarray. “When we look at distribution networks that were built in the 2000’s, many organisations consolidated a number of distribution centres into one mega-distribution centre. Then we started to see larger sites being closed down and split up into smaller, heavily automated facilities. But again, this strategy is not built for today’s eCommerce world and we’re seeing facilities that were built in the 2010’s no longer fit for purpose,” TMX’s Travis Erridge says.

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“Retailers in Australia need to think down the path and realise that their biggest competitor might not be the bricks and mortar store down the road.”

TRAVIS ERRIDGE, CO-FOUNDER AND CEO, TMX

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Merging online with offline

Ship from store

According to Zebra’s Tom Christodoulou, despite the significant growth in eCommerce a physical retail network still offers a substantial strategic advantage.

“Bricks and mortar stores have a physical presence with instant fulfilment capability – that’s a major advantage over any pure-pay eCommerce retailer,” he says.

This is even more apparent in a country as large as Australia. As one of the least densely populated countries in the world, same-day or next-day delivery presents a major challenge for Australian retailers and logistics providers.

With this in mind, Tom says we can expect bricks and mortar stores to continue to play a significant role in the Australian retail landscape. “Retailers with a physical footprint in all key metropolitan areas such as Melbourne, Sydney and Brisbane, will have a major advantage,” he says.

Manhattan’s Raghav Sibal agrees and says some of the most successful retailers during the pandemic were those who could leverage their store network to fulfil orders. “The single biggest thing that will drive tremendous value in eCommerce fulfilment is making in-store network inventory available to online. We’ve seen retailers around the world pivot and make this adjustment in a very agile manner, and they have really come out on top,” he says.

"All retailers want the same thing — to be closer to the consumer, improve fulfilment times, and keep delivery costs down."

“If you want the ability to fulfil orders on the same day, then you need full visibility of your inventory across your entire network. With this, you can utilise your instore inventory for click and collect, and curb side pick-up and delivery,” he says.

A further advantage of having accurate data across instore and online inventory is the ability for retailers to be strategic about the volumes of stock they make available, and through which channel.

“If I visit a retailer’s website and want to buy a jacket, they might have 100 items across five stores in stock. But they might want to show me that they only have 80. This way they can hold some inventory back for their cash and carry customers and drive profitability,” Raghav says.

As more retailers invest in technology that provides them with the ability to fulfil online orders from their store network, the profile of the traditional retail store is rapidly changing.

TMX’s Travis Erridge references the endless aisle, and says we’re starting to see some retailers in Australia adopt this strategy. An endless aisle refers to the concept of an instore customer being able to virtually browse a wider range of products than what is found instore. They can then opt to have that product delivered direct to their home.

“Previously, if I went to a store and a retailer didn’t have what I wanted they would simply lose the sale. But now through advanced technology, store assistants are empowered with data that shows them their entire network inventory. This enables them to make the sale in person and arrange for delivery direct to the consumer’s home,” Travis explains.

As the profile of the retail store starts to merge into a truly omni-channel experience, the role of the store assistant is also changing.

“Interacting with customers instore, then picking and packing orders for click and collect, to preparing an online order to be picked up by a courier – all of these roles will be done by the same individual,” Raghav says.

This is driving the need for store assistants to be kitted out with the right technology that enables them to interact with customers while also fulfilling online orders.

Wearable tech, voice picking assisted technology, RFID and rugged mobile computers for stock management and inventory visibility are empowering store assistants with real-time data.

“A lot of the technology typically found in the warehouse is becoming more mission-critical in the retail setting,” Zebra’s Tom Christodoulou says.

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Feature

1.36 million Australians shopped online for the first time last year.

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“All retailers want the same thing — to be closer to the consumer, improve fulfilment times, and keep delivery costs down."

TOM CHRISTODOULOU, ANZ SALES DIRECTOR AND GENERAL MANAGER, ZEBRA TECHNOLOGIES

What next?

Global eCommerce giant Amazon is on track to finish building its first robotics fulfilment centre in the Southern Hemisphere by the end of this year.

The mega-warehouse in Western Sydney will be 200,000 square metres and will house up to 11 million items. Amazon, the world’s largest eCommerce player, has claimed the new facility will double its operational footprint and provide its customers in Australia with wider selection and faster delivery.

Amazon’s aggressive expansion in Australia points to continued growth of the local eCommerce market. Analysts from Morningstar Equity Research forecast Amazon to account for about 25 percent of local online retail sales, or five percent of the total retail market, by 2030.

Renowned for its ability to provide same-day and next-day delivery in the US and the UK, Australian retailers are nervously anticipating what the real impact of Amazon’s expansion plans will be on the Australian retail market.

According to Travis, retailers shouldn’t be asking themselves how much they should be spending on optimising their network, but how much they are willing to lose if their brand fails to deliver a good customer experience through inconvenient and slow delivery.

He also points out that if Alibaba, China’s biggest online commerce company, can deliver to Australia in two days, then Australian retailers have more to worry about than just Amazon’s expansion plans.

"Retailers in Australia need to think of the future and realise that their biggest competitor might not be the bricks and mortar store down the road. It could be an online shop in China. Suddenly they are competing on speed to market as well as the price difference that overseas competitors can offer,” Travis says.

While there are significant challenges ahead for retailers and 3PLs, Tom says the increased uptake of eCommerce has been a bright spot for the Australian economy in an otherwise challenging period. “While the pace of change and the need to be agile is scary, it’s also very exciting. It’s certainly an amazing time to be working in supply chain and logistics,” he says ●.

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18

Analysis

How MicroFulfilment is Re-shaping the Australian Supply Chain in 2021 WRITTEN BY RAGHAV SIBAL, MANAGING DIRECTOR, ANZ, MANHATTAN ASSOCIATES

The COVID-19 pandemic has accelerated the proliferation of eCommerce by up to six years according to industry experts, with social distancing and lockdown measures leading to unprecedented growth in online shopping.

However, there are associated challenges when it comes to eCommerce fulfilment and delivery, particularly in metropolitan city centres where there is a high reliance on imports, but land availability and limitations on international travel are disconnecting the flow of the eCommerce supply chain.

Online delivery exploded in Australia during the pandemic, yet there appears to be a strong disconnect between what consumers say that they want in relation to retail delivery or collection, and what retailers are offering or understand that their customers want. A recent Manhattan Associates survey of 2,000 Australian consumers and 100 large-end retailers found that the largest group of consumers – 34 percent - said they consider home delivery in two-plus working days to be the most useful option when online shopping, whereas only 6 percent of retailers said that this was the most popular delivery option with their customers.

Almost 50 percent of retailers said that Click and Collect in two-plus working days was the

SUPPLY CHAIN INSIGHTS

most popular delivery option amongst customers, which contrasted with only 6 percent of consumers agreeing that this was the most useful delivery option. A further 31 percent of retailers stated that same day home delivery was the most common delivery choice with customers, however only 8 percent of consumers consider this to be the most useful choice.

Alarmingly, these research findings indicate a major divide between what retailers believe is the desired delivery option, compared with what consumers really want or find most effective.

To combat the very real challenges around meeting customer expectations for online delivery today, one innovation gaining pace for a proactive and resilient supply chain is micro-fulfilment centres.

Micro-fulfilment is the new 2021 supply chain COVID-19 did not just fast-track eCommerce uptake, it also accelerated advances in technology, pushed corporate boards to revaluate their traditional business models, and forced them to rethink relationships between retailers, disruptive start-ups, and automation innovations. This set the scene for a potentially radical shake up of fulfilment strategies across Australia now and into the future.

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making micro-fulfilment centres work efficiently rests on three core pillars. Firstly, making sure that you have an effective omni-channel offering that connects eCommerce orders to the appropriate micro-fulfilment centres is essential. Secondly, ensuring you have complete visibility of inventory is an equally important factor for maintaining accurate insights into stock availability, so you will never end up out of pocket. Finally, making sure you have an in-warehouse system in place to meet the exact delivery demands of the end customer that will see you through to a well-managed and proactive microfulfilment strategy.

Other beneficial aspects of micro-fulfilment centres for retailers across Australia are the options available when it comes to setting them up. You can set up micro-fulfilment centres to primarily service customers in the local area of one store, or you can also set up a ‘spoke-hub’ distribution model where one centre is able to serve many different stores.

Another approach could even be to set up a ‘dark store’ (a retail DC or outlet that caters exclusively to online shopping) as a micro-fulfilment centre.

Streamlining returns to gain efficiencies

At its core, micro-fulfilment aims to speed up the delivery of goods to consumers by bringing the product closer to the consumer.

As the name suggests, micro-fulfilment sites are far smaller than the traditional retail model of sprawling, labour-intensive distribution centres located in just a few remote locations. By adding more automated operations to smaller urban sites and even the backs of physical stores, retailers have the goal of slashing delivery times for online orders, allowing products to reach customers in a matter of hours, rather than days.

Micro-fulfilment also comes with a number of additional benefits. Cheaper than larger, fully robotics-equipped warehouses, the approach of a fully automated micro-fulfilment improves COVID-19 safety, reducing the costs of floorspace and expediting the picking process. It also enables late ordering cut-offs, which reduces the carbon footprint of delivery networks by being closer to the consumer and providing additional collection points away from busy store locations, which in a country like Australia can become incredibly advantageous.

The fundamentals of micro-fulfilment Beyond the challenges of adapting to a more entrepreneurial mindset, the practical aspects of

SUPPLY CHAIN INSIGHTS

The rise in eCommerce orders has also resulted in an increase in returns. Traditionally reserved for the start of the year when retailers would prepare themselves for an onslaught of Christmas returns, retailers must now prepare for higher volumes of returns throughout the year. Streamlining the returns process is key to ensuring bottom-line profits are not eroded too much. An effective Warehouse Management System (WMS) linked to micro fulfilment centres can help to streamline the returns process and also means that returned inventory can be made available for shops or online channels quicker.

Smart fulfilment to streamline 2021 supply chain operations While there is no doubt that the pandemic accelerated a more flexible and innovative approach to supply chain operations for many businesses, going forward there will be more pressure for retailers to redefine their fulfilment strategy to future-proof operations.

As many grocers and retailers remain reluctant to use their current store base for eCommerce fulfilment - because it can interrupt customers and cause issues around social distancing - concepts such as automation and micro-fulfilment will likely be the winners this year and beyond.

While there are still many challenges ahead, we should have a positive outlook.

2020 showed the willingness of retailers and senior leadership decision makers in Australia to go above and beyond normal conventions.

With an open mindset and a willingness to adapt based on market conditions or opportunity, retail businesses are maximising their chance of future success. ●

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Invent tomorrow

Industry Updates

Modernising Aramex for Greater Agility and Innovation The ultimate goal of this transition is to modernise the company’s technology to make it more flexible, robust and agile to adapt in the rapidly evolving competitive climate.

Aramex is a leading global provider of comprehensive logistics and transportation solutions, with a breadth of services that include express courier delivery, freight forwarding, logistics and supply chain management.

The logistics and transportation provider recently embarked upon a large enterprise, digital transformation program with the goal of migrating its entire technology infrastructure from its on-premise data centres to Amazon Web Services (AWS) in order to increase agility, security and speed of innovation. The program included transformation in other areas including customer experience and last mile innovation.

Transforming Aramex’s technology landscape Aramex was previously linked to seven data centres across the globe, which supported over 60 on-premise applications.

To support Aramex in moving its core IT backbone to AWS and in the transformation of its IT landscape through application modernisation, AWS turned to Rackspace Technology to help the company accelerate its transformation.

Working closely with the team at AWS, Rackspace Technology built a team of experts across its Professional Services function that would work directly with the Aramex IT and application development teams, to deliver against a migration roadmap. Rackspace Technology then began supporting the creation of the IT backbone of the cloud environment, where applications could interact seamlessly.

Developing remote working practices to continue the seamless project delivery Aramex and Rackspace Technology were about eight weeks into the project when

SUPPLY CHAIN INSIGHTS

the COVID-19 pandemic forced the teams to continue the work remotely. While there were some initial concerns about the practicalities of operating in this way, Aramex and Rackspace Technology were able to successfully redistribute the workload, and change the governance and product plan in light of current requirements.

“The loyalty and commitment that we’ve seen on the programme from the team at Aramex and Rackspace Technology during this trying period has shown how aligned our two companies’ values are. I can’t think of a time when our leadership values were more evident than over the past few months – and this was also true of Rackspace Technology,” said Mais Rihani, CTO at Aramex.

Creating a cloud native future that is more flexible, robust and agile Thanks to the team’s strategic vision for the potential of the cloud and technology within the organisation, Aramex is not only undergoing cloud transformation but true business change.

Aramex is already seeing the results of its investment in the cloud. The scalability of the cloud infrastructure was critical in supporting customers throughout the 30- 40 percent growth rates that Aramex experienced during the pandemic. The reduction of the on-premise environment resulted in cost savings, as the company has transitioned away from the seven data centres that it previously managed.

While the project is still ongoing, moving away from the monolithic design of the legacy environment into a cloud-based, microservices environment is already starting to deliver against the goal to adopt a more agile infrastructure.

The project is also enabling the Aramex team to begin exploring how cloud-based machine learning models could advance its logistics and transport processes on the ground.

“In our data lake, we now have around 10.2TB of data powering five to six machine learning use cases on the cloud,” Rihani explained. “This generates over 450,000 predictions per day — each of which is generated in just 1.1125miliseconds. With more than 100,000 shipments every day, the deployment of microservices in these machine learning models will help automate more processes to drive greater efficiencies that help us optimise performance and cost.” ●

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Analysis

4 Essential Steps to Optimise eCommerce Fulfilment for Workflow Efficiency WRITTEN BY TOM CHRISTODOULOU, REGIONAL DIRECTOR OF AUSTRALIA AND NEW ZEALAND, ZEBRA TECHNOLOGIES

The rapid rise of the global eCommerce market reflects a shift in consumer attitudes that has made shopping convenience paramount.

New consumer expectations of speed and convenience are impacting supply chains in ways never seen before. In this environment, downtime and inaccurate inventory can cause delays that result in millions of dollars in lost transactions and poor customer experiences. On the other hand, small increases in productivity can make a big impact on customer satisfaction and the bottom line.

So, how do supply chain and logistics professionals access these benefits?

The answer is by optimising operational efficiency in product handling, workflows and use of staff, assets and equipment throughout the fulfilment centre. Superior visibility across your fulfilment centre and partner networks makes greater efficiency possible. With better visibility, you can achieve greater workflow efficiency and collaborate with more partners to get goods delivered to customers faster using flexible omni-channel strategies as you grow.

SUPPLY CHAIN INSIGHTS

Step 1 Understand supply chain visibility and efficiency improvement microservices strategies With the increased dependencies on omni-channel logistics, industry partners are working under collaborative service-level agreements to get goods to the end customer in a promised timeframe. Understanding and implementing these three operational improvement strategies throughout your fulfilment operations can facilitate successful partner collaboration across the supply chain.

The three strategies: 1. Equipping workers with modern mobile technology 2. Automating workflows and managing inventory on the front line 3. Adhering to global data capture standards

Step 2 Equip workers with modern mobile technology Giving your workers modern mobile technology to easily and intuitively capture and utilise data at each touch point throughout the fulfilment process, gives you reliable inventory visibility at any given moment—providing you with better forecasting and communication with your vendors, suppliers, 3PLs and selling channels.

The key to success is choosing and implementing the right devices for the job - that way you can ensure compliance for data capture and use.

What is the right technology for you?

If your front-line workers are always on the move, equip them with a handheld mobile device, which is basically a computer in your pocket (touch screen, camera, enterprise-grade processing power, extended battery life and durable) including a built-in barcode scanner or RFID reader.

If printing high-quality barcode labels or RFID tags from multiple locations is part of your everyday, equip workers with a mobile printer which will allow for digital inventory and asset tracking. By giving your physical goods a digital presence, you’ll maintain essential realtime visibility of your entire supply chain.

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Step 3 Automate and manage inventory on the front-line Empowering your front-line workers to view and manage inventory is paramount to a successful, optimised eCommerce fulfilment operation. Supply chain operators have much room to improve their inventory accuracy, with participants in a 2018 APAC Zebra survey reporting an average inventory accuracy of only 61 percent.

Using captured data to track and analyse inventory movement and utilisation enables real-time decision making throughout multiple operational areas of your fulfilment centre, warehouse or plant so you can optimise interactions with your vendors, suppliers, 3PLs and physical and online selling channels.

So how do you achieve this?

Enabling automation can be as simple as introducing new productivity applications to your devices as well as Radio Frequency Identification (RFID). Productivity applications can save valuable seconds in repetitive tasks - for example, you can capture multiple barcodes in one scan or trigger pull. Meanwhile, RFID can reduce the amount of manual scanning or counting through active or passive signals, resulting in far greater inventory visibility and accuracy levels of 99 percent (a 38 percent increase from the average inventory accuracy).

Step 4 Adhere to global data standards to support effective collaboration In the age of eCommerce, fulfilment and delivery optimisation often means getting an item into a customer’s hands the same day they order it.

Collaborating more effectively with your industry partners and achieving real-time supply chain visibility throughout your fulfilment process can be the difference between capitalising on and missing opportunities to meet heightened customer demands. Capturing and sharing data using global data standards is a powerful collaboration practice that helps industry partners use a common language when managing goods and assets across the supply chain. Using the standards allows for fast, accurate and frictionless transactions and analysis that reduce missed opportunities and cultivate greater customer satisfaction.

How will you benefit?

Benefits to using global data capture standards include easy identification of goods amid changes in the chain of custody, item-level data capture across your partner supply chain for further data analysis, and easy to understand data and information sharing without complicated conversion exercises.

SUPPLY CHAIN INSIGHTS

Step into the future 99 percent of businesses either have a mature omni-channel strategy in place, have recently implemented one, or are planning to implement one soon. But what separates businesses, is their choice in technology to bring their strategy to life.

By incorporating innovative frontline inventory management and orderfulfilment technology solutions into your daily fulfilment operations, you can provide advanced visibility of supply chain activities.

This visibility enables you to collaborate seamlessly with selling channels, manufacturers, wholesalers, suppliers, third party logistics providers and buyers.

Combined with the use of global data capture standards, technology modernisation is a critical step in achieving a higher level of collaboration that meets today’s omnichannel, order-fulfilment requirements. ●

To find out more about how you can give your front-line workers better visibility of goods, assets, processes and people download Zebra’s new report here.

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Analysis

Enhance your Supply Chain and Boost your Customer Experience WRITTEN BY SANDEEP BHARGAVA, MANAGING DIRECTOR, APJ

It can feel like we are living through a period of accelerated disruption.

From fundamental changes in supply chains, increased global competition and the evolution of routes to market, the challenges facing businesses today are daunting.

At the same time, customer expectations continue to evolve and increase. Instant gratification is the standard, and if your digital experience can’t deliver it, customers will leave to find a business that can.

To help address these demands, businesses are looking to transform their approaches to sales, marketing and supply chain management. With the right digital solution, you can create an experience that connects your business, supply partners and channel partners — so you can adapt to market trends and stay ahead of customer needs.

Now is the time to transform Although the COVID-19 pandemic caused 55 percent of surveyed businesses to delay their digital transformation and modernisation plans by six months or more (Rackspace Technology survey, June

SUPPLY CHAIN INSIGHTS

2020), now is not the time to put the brakes on your supply chain modernisation initiatives.

By delivering a strong digital customer experience, you can gain a competitive edge that can support your business recovery. After all, customers will remember those companies that came through for them, and those that didn’t.

Take this opportunity to build a dynamic digital experience in which your businesses, supply partners and channel partners all share and collaborate in a transparent manner.

Data drives devices to the edge IDC predicts that by 2025 there will be over 150 billion machine sensors and other connected IoT devices streaming data continuously. Further, IDC says that edge computing is poised to be one of the main growth engines in the server and storage market for the next decade and beyond.

The advent of 5G networks, which are expected to be 10 times faster than 4G, further increases the need for speed. Edge computing supports more sophisticated applications, especially those that need to overcome latency and bandwidth limitations.

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It eliminates long distances between devices, bringing the power to them wherever they run.

Organisations that have already embraced edge computing are gaining several significant advantages, including: • Real-time responsiveness — As the volume, variety and velocity of data from more connected devices increases, localised network resources deliver real-time value by enabling faster interpretation and processing.

• Reliability — The edge delivers reliability in a world where different devices have different requirements for processing power, electricity and network connectivity.

• Cost efficiency — As data moves faster decisions can be made faster, which can help reduce costs. Also, the reduced reliance on centralised data processing in the cloud can curtail network overhead costs.

One key area of weakness in edge computing can be data security. The problem stems from the wide range of devices used with a secure centralised or cloud-based system. This issue can be exacerbated with the use of IoT devices, which have a documented history of being points of vulnerability in network security. However, distributed network architectures make it easier to lock down and isolate compromised system components, and also reduces the volume of data at risk at any given time.

On the edge of supply chain efficiency

Nearly every industry has deployed or is developing technological innovations that can only be successful if they are supported by edge computing.

The edge could improve business operations in a number of ways, such as supply chain efficiency, machine maintenance, and data optimisation. A few examples of cases from three industries include: • Supply chain sensors in healthcare manufacturing — A shipment of temperaturesensitive pharmaceuticals could be monitored from the time it leaves the factory until it reaches the pharmacy.

• Predictive maintenance in manufacturing — With edge computing, IoT sensors can monitor machine health and identify signs of timesensitive maintenance issues in real-time.

•

SUPPLY CHAIN INSIGHTS

All of these innovations and others are fuelling the rapid growth of edge computing in the supply chain.

Before COVID-19, the research company predicted that the edge computing market size would grow from $2.8 billion in 2019 to $9.0 billion by 2024.

Key factors driving the edge computing market across supply chains include the growing adoption of IoT, the rising demand for low-latency processing and real-time decision-making solutions, the need for surmounting exponentially increasing data volumes and network traffic and, of course, the expansion of 5G deployments.

Retail’s future on the edge Research by MarketsandMarkets predicts that retail will be the fastest-growing segment of the edge computing market largely due to the high volumes of data generated by IoT sensors, cameras and beacons that feed into smart applications.

Edge computing will allow this data to be more efficiently collected, stored and processed than is possible on cloud alone or an on-premises data centre.

One example of these new innovations in use is the “mini Tesco” grocery stores in the United Kingdom and Ireland. These smaller regional stores are finding success by delivering a higher degree of personalisation through their product offerings and promotions. In order to do that, stores must have a clear understanding of local consumer demand and knowledge at the micro level of which products are selling and which promotions are appealing. This impacts everything from product placement to the supply chain. As a result, with data and analytics closer to home they can deliver exactly what their local customers want.

The race to the edge Going forward, more organisations will be assessing the potential to leverage edge computing to meet their specific needs.

The reality is that no one can put data centres in every region to meet increasingly localised power demands. Edge computing enables us to leverage the fullest capabilities of today’s leading-edge innovations closer to the tools that need them. ●

Fleet management — Efficient means of network transmission can maximise the value potential of fleet telematics data for vehicles traveling to distant locations.

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Industry Updates

The Importance of Last-Mile Delivery in eCommerce WRITTEN BY LEIGH WILLIAMS, CEO AND FOUNDER OF ESTORE LOGISTICS

As the economy begins to recover, many retailers are reflecting on the past year and considering focus areas where they can grow their business. A majority will name sales as their number one priority, and understandably so — more sales equates to a direct increase in cash flow. However, if retailers want to increase sales permanently, as opposed to a short-lived boost, investing in long term customer retention and satisfaction strategies, particularly through optimised fulfilment and delivery services, is crucial.

Good sales retention means developing and maintaining relationships with your customers long after they purchase a product, generating loyalty in your brand.

Repeat purchasers, who already know and love your brand, tend to buy more often and spend more than newer customers.

Additionally, they’re more likely to recommend you to their friends and family, generating new sales completely organically.

If 2020 has taught us anything, it’s that consumer demands are changing and it’s imperative that retailers adapt to meet them.

Following the uproar generated by Aussies waiting multiple months to receive their orders due to the unprecedented surge in online retail, we know consumers have very little patience for delayed deliveries.

A focus on the last-mile strategy is vital. In fact, shipping times are often the deciding factor when choosing which retailer to buy from.

To ensure products can be picked, packaged and delivered as quickly as possible, retailers should consider stocking

SUPPLY CHAIN INSIGHTS

with warehousing and order fulfilment providers. eStore Logistics is Australia’s largest ecommerce-focused fulfilment provider, built to service online retail order fulfilment profiles and volumes. It uses state-of-the-art technology, automation and logistics capabilities to provide a worldclass warehousing and fulfilment solution for ecommerce and omni-channel retailers. eStore Logistics recently unveiled the largest ever rollout of AI-enabled robots in Australian retail fulfilment across two new facilities in Melbourne’s western suburbs.

The distribution centres will handle up to approximately 95,000 orders each day for brands including Kogan.com, Temple & Webster, Patagonia and MTB Direct. These two new facilities will be equipped with over 200 Autonomous Mobile Robots (AMRs) that will transform ecommerce in Australia

by fulfilling orders fast enough for retailers to offer affordable same day delivery services to customers.

The advanced solution will also allow for flexible delivery options such as 4pm cut off for same day shipping, express deliveries, parcel collection locations that are open after hours, and parcel redirection.

While sales should be a vital consideration for growing your business, it’s imperative to strip this back and build a strong customer base first.

Last-mile delivery options and a seamless shopping experience is just one of the ways you can increase customer retention, ensuring your brand is always the first port of call. ●

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Next Issue

Look out for the next issue For all of your latest supply chain industry news, be sure to join our community on LinkedIn

We will be taking a detailed look at Inventory Visiblity as well as Order Management Technology We will be putting together the A to Z guide of all things Order Management from benefits, terminology, key players and insights from those in the know.

For more information or story suggestions, please contact: editor@supplychain-insights.media For advertising enquiries, please contact: advertising@supplychain-insights.media

SUPPLY CHAIN INSIGHTS

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