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Trends & Expectations: E-commerce & Logistics
February 6th, 2013
Radisson Blu Hotel Amsterdam Airport
Logicon | Supply Chain Management Conference for Retail & FMCG
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Take aways..
Without a solid plan for logistics, Cross channel will not succeed
Warehousing solutions do not have to be fancy, they have to work
Collaboration is the key for online success
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Define an optimal network per product/market combination
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International logistics consultancy
5 year e-commerce projects
45 years history
Logistics
Construction Management & Engineering
Supply Chain Management
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Trends within E-commerce & Logistics SIGNIFICANT DIFFERENCE IN RETAIL SPLIT ONLINE/OFFLINE BETWEEN COUNTRIES
Source: Centre of Retail Research
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Trends within E-commerce & Logistics INTERNET USAGE DIFFERS BY PRODUCT GROUP
Source: GFK, based on Germany
Share bought online (%)
Shar
e in
form
ed o
nlin
e (
%)
0
25
50
Telecom
Computer
Consumer Electronics
Sport & Leisure
Furniture Photo
Gardening Fashion Welness & beauty
Household
Books Babycare
Software
0 12 24
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Customers want choice
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Delivery speed
Delivery location
Returns handling
Payment method
In product
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The future is in Europe
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• Total EU > 500 million inhabitants
• Target EU: 20% purchases Cross Border
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Current E-commerce network structures
Yes No
Branded sites
Commodity sellers
Zara / H&M
Zalando / Amazon / Pixmania Nootbooksbilliger / Coolblue
Short lead time perceived valuable
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Some major changes are just starting up MID-TERM: STOCK CLOSER TO CUSTOMER & STOCK FURTHER UP IN SUPPLY CHAIN
CURRENT DIRECTION NEXT YEARS EFFECT
Faster online delivery requested by customers Increase sales (Product offered via multiple E-tailers)
Wider assortment Deeper assortment Demand for Value Added Services Cross border selling
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Product is stored at other locations/ companies in the network closer to the
customer
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Branded sites
Commodity sellers
E-tailers search for partners Product storage & handling shifts partially to wholesaler, manufacturer & other E-tailers
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Supply Chain Demand Network END STATE: SUPPLY CHAIN DEMAND NETWORK
CURRENT END STATE MID TERM SOLUTION
Branded sites
Commodity sellers
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Supply Chain Demand Network END STATE: SUPPLY CHAIN DEMAND NETWORK
Collaboration is king Network far more complex than current typical Supply Chain
E-tailers increase assortment, both in depth and width
E-tailers expand to other countries/ markets
Inventory sharing, both horizontal and vertical
Piece picking at all levels of the network (including producers!!)
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END STATE
Optimal network per product/market combination, NOT by company
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Cross channel is the future
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• Change in internal logistics Both B2B and B2C picking/shipping
• Logistics opportunities are typically to be found in
• Sharing inbound and bulk stock of items sold both online & offline
• Return flow
• Potentially in transport between warehouse and (pick up) store
• From a logistics point of view, everything else is challenging!
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Cross channel impact differs by company type
PRODUCER
RETAILER
• Change in internal logistics Both B2B and B2C picking/shipping
• From pallet to piece pick
• From retailer address to customer address
• Different lead time requirements
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Orders for Business ≠ Orders for Consumers
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B2B B2C
Lines per order 50 - 100 1 - 3
Pcs per line 5 -100 1- 2
Complexity Lower Higher
Returned goods Very minor Up to 30%
Consolidation Pallet Shipping box
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Where are online orders handled?
Store
Offline DC
Online DC Low mechanization
Online DC High mechanization
Offline DC
• New developments facilitate integration B2B & B2C
Sales online
Time
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Sales online
Online DC High mechanization
Where are online orders handled?
Store
Online DC Low mechanization
Offline DC
Online DC High mechanization
• New developments facilitate integration B2B & B2C • New specific e-fulfillment solutions are being developed
Time
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Summary
Think big, act scalable and GROW
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Geography From domestic to Cross border @
Customers Choice, choice, choice @
Supply chain
Collaboration is king Inventory sharing, both vertical and horizontal Piece picking at all levels of the supply chain
Optimal network per product/market combination
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Fulfillment “Traditional” logistic solutions are mostly sufficient Specific solutions for E-fulfillment are being developed
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Senior Consultant
Supply Chain & E-fulfillment
www.linkedin.com/in/robclarijs
www.groenewout.com
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C O N S U L T I N G , E N G I N E E R I N G & O P T I M I Z A T I O N I N L O G I S T I C S N E T W O R K S