This Week in Logistics News (January 12-16, 2015)

By Adrian Gonzalez

I’m short on time this morning, so let’s go straight to the news that caught my attention this week:

This past Tuesday, I gave a lecture at MIT on transportation management systems (co-presented with MercuryGate, which gave the students an optimization problem to solve and a demo of its TMS). I began by making the case that companies — at least those that are forward-thinking — no longer view logistics as just a cost center. Yes, cost management is still important, but companies are also looking to leverage logistics as a competitive weapon, as a way to drive top-line growth and gain market share. All the activity we saw last year around same-day delivery and home delivery are perfect examples. And we’ll certainly see more of it this year, as evidenced by the news this week that Anheuser-Busch InBev is launching an e-commerce app called Bud Light Button that will allow consumers in Washington, D.C. to order beer online and have it delivered within an hour. Here are some excerpts from the WSJ article:

The Bud Light Button app will offer delivery within an hour of 24-packs of cans of Bud Light for $19.99 and 12-packs of cans for $10.99. AB InBev created the app with Klink Technologies Inc., an alcohol-delivery startup operating in Washington.

The efforts follow the launch of startups such as Minibar Delivery, Saucey Inc. and Digital Liquor Delivery, LLC, known as Thirstie, that have created apps allowing consumers to order beer, wine and spirits from nearby retailers. The local retailers fill the orders and deliver alcohol to customers’ doors.

Lucas Herscovici, Anheuser-Busch vice president of consumer connections, expects beer delivery and e-commerce to “be big in the future.”

As I’ve said before, as the worlds of e-commerce, social networking, and search continue to converge, we’ll see everyone involved — from Google, Facebook, and Twitter to manufacturers and retailers of all sizes — move beyond the “buy” button and focus more on logistics, especially last-mile delivery.

As expected, there were plenty of announcements this week from NRF’s Big Show. I wasn’t able to attend this year due to other commitments, but our friends at GT Nexus did a nice job recapping the key takeaways from the keynote presentations and sessions in a series of blog posts. JDA and HighJump were among the software vendors announcing new retail-focused solutions this week. You can read the press releases linked above for all the details, but here are the highlights:

JDA: The company “announced the availability of Retail.Me, a comprehensive services offering that provides retailers with sophisticated shopper segmentation and localized assortment recommendations to expand sales and increase customer satisfaction…Taking POS data and applying leading analytics tuned for big data, Retail.Me provides planners and buyers with deeper understanding of shopper purchasing behavior, assortment performance at the shopper segment level and rich assortment recommendations to deliver personalized offers…Available immediately, Retail.Me is a software-as-a-service consulting offering that takes full advantage of JDA’s industry leading software solutions.”

HighJump: The company announced the release of HighJump™ Retail Advantage that “helps retailers and grocers optimize fulfillment processes to meet the demands of omni-channel customers while increasing profitability. It drives the movement of goods from receipt, to the backroom, to the store shelf and to replenishment, along with the unmatched flexibility to efficiently fulfill orders while considering a customer’s unique way of doing business…The solution seamlessly integrates with store point of sale (POS), planograms, order management and ERP systems. Its additional functionalities include: cycle counting and inventory adjustment controls to maintain store inventory accuracy; and a single pool of inventory per product to which all channels have access, and fulfillment prioritization rules among online, home delivery, store requirements and wholesale orders.”

JDA’s Retail.Me is yet another example of the convergence I talked about so much last year — that is, the coming together of software, consulting, and managed services. As I wrote last May in The Biggest Challenge in the Shift to Cloud:

Manufacturers and retailers don’t make money by owning software applications; they make it by using software applications as efficiently as possible to get their job done. Put differently, manufacturers and retailers don’t really want to buy supply chain software; they want to buy outcomes — cost reductions, productivity improvements, revenue growth, increased market share, improved working capital, and so on. As Harvard marketing professor Theodore Levitt famously said, “People don’t want to buy a quarter-inch drill; they want a quarter-inch hole!”

This is why the business models of third-party logistics providers (3PLs), software vendors, and consultants are converging today in the supply chain market. Software alone is not enough, and neither is simply changing the way you price and deploy software applications. You also have to transform your company culture — which is the most critical and difficult job CEOs at enterprise software companies face today.

It seems like JDA, under its new CEO and leadership, is on the way to making this transformation.

And with that, I’m out of space and time. Have a happy weekend!

Song of the Week: “Send Me on My Way” by Rusted Root