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Supply Chain Insights

Efficient Returns Management Benefits the Customer, Retailer, and Environment

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Written by Royston Phua, Supply Chain Practice Lead for APAC region at Zebra Technologies

In many jurisdictions, online returns are a right under consumer law. Globally, customers now expect a smooth and easy returns process from all retailers. Although returns don’t have to be offered free of charge, it’s a big selling point if they are. The modern consumer frequently over-orders: an eye-watering 30% of online purchases are returned on average – a number that’s more than three times higher than the 9% return rate experienced by traditional brick-and-mortar stores. One of the implications of this trend that cannot be ignored is environmental damage at the expense of convenience.

With the rise in global events, campaigns, and movements like Earth Day, it’s clear that the future of our planet is a concern for people across the world. So, even though consumers may be driving demand for convenient, hassle-free returns options, they also feel strongly about the effects of climate change, sustainability, pollution, and waste. More informed than ever, they like to interact with businesses that demonstrate exemplary Corporate Social Responsibility (CSR).

This is especially the case for millennials, of which 87% would be more loyal to a company that helps them contribute to social and environmental issues. With this in mind, retailers are facing a difficult balancing act: optimising the efficiency of reverse logistics and keeping the customer satisfied, whilst minimising impact on the planet. That is why it is so important to understand how supply chain visibility, intelligent loading/shipping and the use of RFID tracking and drop-off/collection networks can be utilised to achieve this balance.

Supply chain visibility that delivers

With an increase in global logistics year-over-year (of which eCommerce constitutes a large portion), maintaining visibility into the supply chain from the warehouse right to the last mile is becoming essential for efficient deliveries and returns. Picking and sending the correct orders out in the first place, in the appropriate condition, can counteract some of the returns generated by supply chain inefficiencies.

Dealing with the collection of unwanted or damaged goods, and possibly sending a replacement, all adds to the carbon footprint of the retailer (and compensation claims), so getting it right the first time is critical. As such, it is extremely important to employ smart technology in the warehouse, which provides real-time data about customer interactions and enables you to honour cancelled orders, even if the request comes in at the last minute. 

Supplying barcoded labels or packaging with goods before they leave the warehouse is an effective way to ensure any returned packages can be tracked and sorted correctly, to control waste and re-use stock where feasible. Some retailers are doing this already; their eCommerce systems anticipate that a customer may plan to return some or all of the order (because he or she ordered the same shirt in different sizes, for example).

Once returned, barcodes, RFID technology, scanners and mobile computers can pull up product details to help assess a product’s suitability for resale before it is placed back in stock. From an environmental perspective, this approach maximises reuse, recycling, or recirculation, ensures products are not simply binned or later lost in the system, and reduces unnecessary transportation.

Intelligent loading and shipping are also key

At the loading dock, managers cannot physically view all dock doors to oversee operations, and staff are often inexperienced seasonal workers or not yet fully trained. Relying on personnel to judge truck volume by their eyes alone leads to improper loading and poorly-informed decision making, resulting in wasted space and sometimes dangerously-stacked goods. Shipping ‘air’ instead of parcels is clearly a waste of time and money, with excess trucks on the road leading to more fuel consumption and pollution.

Forward-looking companies realise that maximising trailer space makes the delivery process more competitive, efficient, safe, and secure – and of course environmentally friendly. In order to future-proof your operations, you need visibility into key load metrics, ensuring every load is space efficient. It will come as no surprise that a data-driven approach can provide incredibly smart solutions.

Trailer monitoring systems such as Zebra SmartPack™, 3D sensors and red, green, and blue (RGB) cameras can analyse loading operations in real-time, calculating the build profile of a container/truck in terms of density, fullness, and weight. Information is then translated into a user-friendly dashboard (viewable on a mobile or static device), with alerts triggered by scenarios like idle bays or under-loaded trucks. This smart loading also ensures packages are stacked appropriately so as to avoid damage – reducing the likelihood of a return.

Once on the road, GPS, RFID, scanning, and camera technology provide real-time data on deliveries, including the last-mile delivery. Although this is nothing new, it is a key step in eliminating re-delivery attempts or claims of non-delivery (leading to unnecessary mileage, pollution, and reordering). This visibility is of interest to all supply chain stakeholders and shortening the delivery window is more convenient for customers too.

Single collection/drop-off points for deliveries and returns like parcel shops, lockers and combined retail stores are proving to be efficient solutions across APAC. These single-point locations allow you to reduce delivery time and mileage through consolidated shipments/collections and could potentially end the common consumer issue of missed deliveries. Fleet management via route planning and optimisation ensures no journey is a wasted one and keeps the chain moving. Imagine a concierge for a whole suburban area, not just for a residential block.

In Zebra’s recent study The Future of Fulfilment, 68% of global retailers ranked online returns as a key challenge – a challenge that is financial, logistical, and environmental. The eCommerce retailers that will thrive in the future are those who are environmentally conscious as well as customer focused.

With millions of parcels in the supply chain, smart data-driven solutions from the point of order are the only way to keep pace with customer demands, as they currently offer the best way to facilitate end-to-end visibility and intelligent decision-making.

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Supply Chain

bp and Uber sign Global Strategic Delivery Partnership

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  • bp and Uber sign a new global strategic convenience partnership aiming to make more than 3,000 retail locations available on Uber Eats by 2025.
  • The partnership extends current local arrangements in Australia, New Zealand, Poland, South Africa and the west coast of US, adding the UK and eastern US in 2022 and with plans to launch in other European markets from 2023.

Today, bp (NYSE: BP) and Uber Technologies, Inc. (NYSE: UBER) are announcing a new global strategic convenience delivery partnership, extending their existing local arrangements to reach more consumers across the world. Together, the partners will offer a huge range of quality convenience products, including fresh and prepared ranges, from select retail locations.

bp is the first convenience retailer to team up with Uber Eats on a global level and aims to have more than 3,000 retail locations available on the delivery platform over the next three years. The partnership supports bp’s goal of growing its access to customers and expanding its delivery footprint, in response to soaring demand for food, groceries and everyday essentials brought to the door.

The new partnership covers retail sites in Australia, New Zealand, Poland, South Africa and the west coast of US. Sites in the UK and eastern US will be added to the app for the first time this year, with plans to launch in other European markets from 2023.

“We’re thrilled to team up with Uber Eats globally giving us the opportunity to reach many more consumers online in addition to those who currently visit our retail sites. We’ve seen how the pandemic has accelerated customer demand for delivered convenience and this partnership will allow us to scale up quickly on the Uber platform. And for the first time, we will be able to offer delivery options to existing customers on our own BPme app by the end of 2023,” said Emma Delaney, executive vice president customers & products, bp.

With 20,500 bp retail sites across the world and 550 million customers living within 20 minutes of a bp retail site, the partners see enormous opportunities for growth. bp sites offer a range of products tailored to local markets which may include hot and cold drinks, food-for-now options as well as staple groceries, fresh produce and ready meals, plus wine, beer and flowers.

  • In the UK, customers will be able to access a range of Wild Bean Café, and other branded food and products via Uber Eats – with the first 120 sites due live on the platform by the end of June.
  • In the US, the offer will be made available to bp’s network of independently owned retail locations to support the growth of their businesses. The goal is to make it easy for these partners to sign up to the Uber Eats platform and access benefits based on bp’s scale.

bp will benefit from Uber’s global brand and operations footprint, best-in-class technology for dispatching orders, and more than 4.4 million drivers and couriers on the platform worldwide.

As part of the agreement, Uber Eats and bp will work to introduce delivery options onto bp’s own app, BPme – initially planned to be available in the UK, US and Australia by the end of 2023 – powered by Uber Direct. This new offer will allow bp to directly connect its customers to delivery riders, making Uber Eats the trusted partner in fulfilling these orders. Since 2019, bp has seen a three-fold increase in users of the BPme app, with 16 million active loyalty users worldwide.

“With more than 20,500 locations around the world, bp’s reach is enormous—making them critical partners as we pursue our ambitions of helping consumers across the world get what they need delivered to their doorsteps,” said Pierre Dimitri Gore-Coty, Uber’s SVP of Global Delivery. “We are proud to support this next phase of the company’s convenience growth through this delivery partnership and look forward to deeper collaboration in the future.”

bp and Uber already work together in mobility with bp providing electric vehicle charging for Uber’s ride-hail drivers. The companies will explore other areas for future cooperation in convenience, including opportunities to utilize low carbon delivery methods to fulfill orders from bp sites.

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Supply Chain Insights

Officeworks to own and control Distribution Network.

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Officeworks invests in supply chain capabilities, will own and run it’s distribution centre.

Officeworks has changed its supply chain strategy in the wake of COVID-19 issues, with a view to owning and controlling a network of distribution centres across the country.

“When I joined we had a different strategy around our supply chain,” Officeworks managing director Sarah Hunter told The Australian, referring to the company’s previous outsourcing strategy.

“So we’ve worked really hard now to build our supply chain capability. We were in the process of outsourcing it, we are now in the process of building that capability.

Officeworks recently opened Australia’s first solar-powered robotic distribution centre in Derrimut, Victoria.

“We started in Victoria, and we have had approval to build, now board approval to invest, and we are building a new, similar (distribution centre) operation in Western Australia. That’s exciting,” she said.

“Looking at our capital expenditure three, four, or five years ago it’s a material step up in our investment in our supply chain.

“Most importantly for us as a business is that every team member who worked at the old facility has been completely retrained,” she said. “We have 120 team members who are now fully trained in how to work in an automated state-of-the-art environment.”

The need to control its own distribution became clear during the pandemic.

By December, Officeworks saw 46 per cent of its business come from online, including click and collect. Now it needs to move to retain this growth at a cost effective scale.

“We have created a facility that’s not only more productive, it’s going to enable our online business to grow in Victoria and into NSW at the rate that we expect our online business will grow.

“So now we have the capacity, the cost per pick is materially lower because it’s much more productive. It’s a win-win scenario for us. We’ve kept everyone employed with really great job security. We’ve scaled them up to work in the supply chain of the future.

“And on top of that, we now have the capacity for growth in Victoria that frankly we were struggling with through COVID.”

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Business Continuity

Skills shortage puts SAP projects on hold

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Business demand creates double whammy on recruitment pressure

Skills-related issues have hit a quarter of SAP users, in some cases putting projects on hold, according to a survey of companies in the Americas.

Research released by the Americas’ SAP Users’ Group (ASUG) shows that 26 per cent of organisations see skills in supporting, developing, and upgrading SAP systems as their number one challenge in working with the technology.

A quarter of users loyal to the German vendor said skills problems were holding up projects.

Geoff Scott, ASUG CEO, told a webinar last week that the combination of skills shortages in businesses and their technology teams created a vicious cycle of driving the demand for new tools and technologies.

“Business functions come and say, ‘Hey, I need to have all these things done.’ And technology teams say, ‘Well, I don’t have the same skills I used to have.’ And I think it creates a major disruption inside many of our member companies,” he said.

Skills were also a major issue for SAP users looking either to migrate to or support S/4HANA, the latest version of the tech giant’s ERP software based on an in-memory database.

“We are going to feel the pinch of that skill gap. My word of caution is that as you think about moving to S/4 if you have not already, the ability for you to plan that migration may hit some turbulence related to skill gaps with your external partners. That’s something that you absolutely positively should consider,” he said.

While technology issues were the greatest concern in the research overall, broken down, only integration problems were more cited than staff turnover and maintaining knowledgeable staff.

Of those with integration problems, 28 per cent said they were causing data errors to spread, 17 per cent said they were affecting the compatibility between SAP and other applications, and 17 per cent said it meant they were unable to keep up with new technologies.

One respondent said: “Changes made in SAP and Salesforce that do not get reflected in the other system are causing data inconsistencies.”

Overall, the majority of SAP users were increasing their spending on the technology. Fifty-two per cent said they were increasing spending, up from 46 per cent last year.

However, the proportion of users saying they were cutting spending on SAP also rose from 5 per cent last year to 8 per cent in 2022. The number of organisations making the same level of investment fell, according to the ASUG research.

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