RILA Recap: Retailers seek supply chain solutions

The Retail Industry Leaders Association (RILA) convened its 31st annual Supply Chain Conference earlier this week. RILA’s Caroline Stec provided a recap of an event which drew record attendance.

RILA's 2016 Supply Chain Conference is convened about 1,500 supply chain pros from all over the country, including executives from traditional retailers, e-commerce shops, service providers, and more. Despite their diversity in size, scope, market and systems, these attendees all have one thing in common. They are each trying to figure out how to keep their supply chains up to date and meeting new challenges that arise with new technologies, all while keeping their customers happy and their brand intact. As was said in the conference introductions, retailers are now expected to fulfill an order anywhere, anytime. So how do they keep up?



In his opening keynote address, Target Corp.'s chairman CEO Brian Cornell addressed this dilemma head on.



"I don't know all the answers. But when I think about a challenge this big, it's a problem best solved together," said Cornell.



Good thing RILA brought together the industry's best in one location for four days.



Cornell went on to explain that success is often about finding a simple solution to a complex problem. Citing legendary UCLA (of which Cornell is an alum) basketball coach John Wooden and his focus on fundamentals with player development, Cornell says he's adopting the same principle at Target when it comes to its strategy for modernizing its supply chain.



"We have to get the fundamentals right. We have to make sure those foundational initiatives are in place first," he said.



Fundamental to Target's operations, according to Cornell, is serving the consumer, and supply chain modernization boils down to expanding capabilities for those consumers. This can only be successful when the foundation of the business is stable. For Target, expanding its offerings means viewing the supply chain as a global network, paying attention to industry developments (drones, anyone?), and working as a team to move work upstream.



But Target is just one of many retailers focused on building a strong operational structure as a means to prepare for the future. In his general session Making Innovation a Habit, Uri Neren, president of Innovation International, outlined 27 shared practices of companies who have found repeat success in innovation. Of no surprise, one of the key practices for creating a culture of innovation within a company is establishing an internal structure that fosters forward thinking. And vice versa, that same culture of innovation has been found to rely heavily on a strong organizational structure.



As one might expect, the supply chain structure that was the gold standard 10, 20, or even five years ago doesn't fly in today's world. Because omnichannel is the name of the game, retailers are having to completely rethink and redesign their supply chain networks from the ground up, as was discussed in the breakout session titled “Designing the Omnichannel Supply Chain with Integrated Optimization & Simulation.” This includes everything from inventory positioning, transportation, the role of the store, and services offered to consumers, according to panelists Earl Davis of Cabelas, Peter Hunnewell of Michael Kors, and Toby Brzoznowski of Llamasoft. They say that in order to meet today's unique customer demands, they're approaching supply chain operations much more holistically, and asking more questions internally about what supply chain structure works best for the future.



In fact, “future-proofing the supply chain” is a common theme among all speakers thus far at the conference. For Unilever's Marc Engel, future proofing operations means moving towards a more sustainable and environmentally friendly system. For Ulta Beauty Derek Hornsby, it's embracing different leadership styles to encourage new ideas and unique problem-solving techniques. And for J.C. Penney's Mike Robbins it's about making sure your supply chain is reliable, collaborative, full of “rock star talent,” and ultimately swinging for the fences.



In a closing session outlining the current political landscape, journalist Amy Walter described Donald Trump's unprecedented success in the presidential race as a loud earthquake disrupting the Republican Party. And as the 2016 Retail Supply Chain Conference continued to unfold, it looks like there is a similar force (or two) shaking up the retail supply chain.

Prior to Walter's assessment of the presidential campaign - a timely update on Super Tuesday - attendees heard from retailers familiar with this state of change across the industry. Jon Nordmark of Iterate Studios, Pano Anthos of XRC Labs, Anu Penmetcha of Hudson's Bay Company, and Paula Rosenblum of RSR Research all provided insights on emerging and potentially disruptive technologies making their way into the retail supply chain. Namely, Anthos says 3D printing is completely revolutionizing manufacturing, making personalization and consumer-driven in-store experiences the name of the game. And because technology is granting consumers more and more control over which products they want and when they want them, some retailers are developing a demand-based supply chain where a product's availability depends solely on consumers' desire for it. Panelists agree this helps ameliorate many supply chain challenges like overstocked shelves and unwanted inventory.

Macy's senior VP of logistics & operations Bill Connell also pointed to the heightened role of the consumer in the supply chain during a breakout session on "final mile" strategies, along with Electrolux's Josh Benton and XPO's CEO Brad Jacobs. According to Connell, there is no "one size fits all" when it comes to strategies for delivering products to consumers, and taking the time to understand a customer's preferences and expectations and responding to those preferences is critical.



"We all have to be open to understanding change, new ideas, and the relentless emergence of technology, how it all works, and how it will work in the next five years," said Connell.

While technology is certainly one disruptive force in 21st century supply chain operations, it's generally an external factor affecting the way retailers do businesses. But what about internal disruptions? Amidst all of the advancements in technology, Trudy Bourgeois, founder and CEO of the Center for Workplace Excellence, insists taking an internal audit of company leadership is of equal, if not more importance when it comes to building and maintaining success as an organization. Specifically, Bourgeois argues the critical importance of "inviting diversity of thought to the table," a practice she says has proven success in bringing creative and collaborative solutions to complex challenges.

She says that without diversity in leadership, businesses risk missing valuable perspectives in the decision making process, that could affect their ability to satisfy customers down the line. Pointing to the current disproportional makeup of executive leadership, Bourgeois says now is the time to commit to making intentional movements towards diversifying the workforce.

To put it simply, Bourgeois says, "we will either disrupt or be disrupted."