Above the Fold: Supply Chain Logistics News (January 20, 2023)

190 days.

That’s how many days between today and July 29, 2023.

That’s how many days until the JDRF Ride in Burlington, VT, where I’ll be cycling 100 miles with other members of our Logistics Leaders for T1D Cure team.

Yes, a new season has begun for our LL4T1DCure team and we’re excited to hit the road again in support of JDRF and finding a cure for type 1 diabetes. Last year we raised $48,061 for JDRF, bringing our total to $332,000 since 2016! We’re aiming to raise $75K this year — a bit of an audacious goal, but if we’re going to raise the bar, why not aim higher? You can help us reach our goal by making a donation today.  

Do you enjoy cycling? Are you looking to explore new roads? Want to have fun with friends while supporting a great cause? Then join our LL4T1DCure team this year! Cyclists of all abilities are welcomed. If you’re interested in participating in a ride (see other JDRF Ride locations and dates) or sponsoring the team, please contact me for details.

Moving on, it was a relatively quiet week for supply chain and logistics news, but here are the items that caught my attention:

Failing the First Moment of Truth

If you’ve been in the industry for a while, you probably remember “the moments of truth” that former P&G President and CEO A.G. Lafley defined back in 2005. The first moment of truth is when a customer first confronts a product at a store; it is when “a consumer chooses a product over the other competitors’ offerings.”

If a product is out of stock — if you miss that first moment of truth — not only do you miss the sale, you risk losing that customer for life if they end up shopping at a competitor or buying a competitor’s brand.

The sad truth is that many retailers still don’t have accurate, real-time visibility to in-store inventory. It is a problem that technology companies have tried to solve for many years, with limited success due to solution complexity, cost, and other factors.

But if at first you don’t succeed, try, try again. 

As Isabelle Bousquette reported last week in the Wall Street Journal, “Google Cloud said it has developed a new artificial intelligence tool designed to help big-box retailers better track the inventory on their shelves, aiming to improve a technology that has struggled to work well in the past.” Here are some additional details from the article:

Google Cloud said Friday its algorithm can recognize and analyze the availability of consumer packaged goods products on shelves from videos and images provided by the retailer’s own ceiling-mounted cameras, camera-equipped self-driving robots or store associates.

“It’s probably not entirely solved yet,” said Graham Watkins, executive vice president of supply-chain transformation and retail innovation at supermarket chain Giant Eagle Inc. He said the Google Cloud product has shown above 90% accuracy during early tests in a Giant Eagle innovation lab, which is designed to replicate store conditions. That is high enough to generate continued interest from the supermarket chain, but not high enough for the company to consider deploying it at scale yet.

Meanwhile, at the NRF Big Show this week, Manhattan Associates (a Talking Logistics sponsor) “unveiled its vision for an RFID-powered store. Manhattan Active® Omni suite has expanded its support of RFID tags for automating and streamlining the inventory counting, receiving, picking, checkout, return and exchange processes.” Here are some more details from the press release:

Retailers are increasingly depending on their stores to fulfill both in-store and online orders. However, their ability to do so is often hindered by poor store inventory accuracy, which often falls below 70%. In fact, a recent Manhattan survey found that only 3% of U.S. retailers believed they had an accurate view of inventory in stores and across their distribution network.

Manhattan has solved this challenge by enabling its point-of-sale and store fulfillment solutions with handheld RFID support for all inventory management and order fulfillment activities. By combining RFID technology with Manhattan Active Omni, retailers can increase store inventory accuracy from 70% to nearly 100%. Manhattan’s solution also reduces inventory-related labor hours, helps associates quickly locate merchandise and expedites transactions at the point of sale.

If you were around in the late 1990s and early 2000s, you will remember that RFID was going to revolutionize all of supply chain management. Even the 800-lb gorilla Walmart was mandating its suppliers to use the technology. By 2006, however, it was clear that the hype far exceeded reality. As Evan Schuman wrote in eWeek in February 2006:

RFID was supposed to revolutionize the supply chain and—by mid-2006—dominate most aspects of product handling within retail and manufacturing. Today, even the most ardent RFID advocates are conceding that hasn’t happened and it’s quite frankly not even close.

Granted, we’re not in 2006 any more, and there have been significant improvements with RFID technology and its cost. So, the promises and visions of 20+ years ago are closer to being realized today than ever before. But we’re not there yet.

And so many retailers continue to fail the first moment of truth.

And with that, have a happy weekend!

Song of the Week: “Until I Found You” by Stephen Sanchez