With the growth of electronic commerce comes the emergence of the "all-channel shopper," an individual who demands the same level of service from retailers regardless of the means by which products are being sold. In response, says Lasher, brick-and-mortar stores need to be taking a close look at their operations, and optimize their systems to conform to the new reality.
A big question for distributors is whether to handle multiple channels in different facilities. There's no hard and fast rule, says Lasher, although he sees a move toward retrofitting existing warehouses, instead of building new ones to handle the unique requirements of e-commerce. The problem, he says, lies in the nature of the legacy systems that control those operations. Many distribution centers were put in place 20 or 25 years ago, and manual processes are likely to be common. Modern-day IT systems are essential for handling the e-commerce channel, even if the same building is being used.
New labeling, auditing and optimization systems can free up more space and make better use of existing facilities. Analytics can help merchandisers to match supply with demand, even in the fast-moving and unpredictable world of e-commerce. "You can leverage today's technology to look out across the supply chain," Lasher says.
One of the characteristics of e-commerce is a reliance on smaller, more frequent shipments. DCs need to be set up to handle "eaches" and less-than-case quantities. That sort of operation isn't well-served by the high-volume, standardized approach of most traditional warehouses.
New material-handling technology can help. Robotics is one fast-developing technology. Another is "goods-to-person" systems, which are highly automated and can result in "tremendous" labor savings. Also of value are the labor-management systems contained within most major warehouse-management system software.
"They give us a benchmark of where to start," says Lasher, "and show what productivity could be. They're also a jumping-off point to new technology."
