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Resource Center 04

RILA AND THE RETAIL INDUSTRY: WHAT YOU NEED TO KNOW

The Retail Industry Leaders Association (RILA) annual conference will play host to top logistics/supply chain executives in the retail industry, including keynote speaker, Brian Cornell, CEO of Target Corporation. Retailers across the globe gather together in Dallas, Texas on February 28th – March 2nd to discuss challenges, opportunities and the future of supply chain logistics. Sessions at this year’s conference will primarily focus on the growing demands placed on today’s supply chains to be effective and efficient in an increasingly changing industry and marketplace.

In order to help you make the most of your time at the conference, CSX Transportation (CSXT) Intermodal has delved into the three main topics retailers are buzzing about and key insights that will help you have informed conversations at the exhibit.

 

Supply chain disruptions
Supply chain disruptions are inevitable. Last year, 40 percent of manufacturers reported a disruption that impacted their business. Whether these disruptions are caused by government regulations, technology challenges or the supply chain talent shortage, supply chain professionals must prepare for all of the possible disruptions that could affect the way their freight moves.

Several sessions at this year’s RILA conference will focus on “real-time visibility” and “rapid planning and execution” which is a clear indicator that supply chain managers simply can’t afford to assume that today's traditional supply chain strategies will be successful in the future. 

Technology advancements in the industry
From robots and sensors, to drones and the Internet of Things, new technological advancements are driving the industry to further evaluate how they deliver to the consumer.

The relatively low costs of robots (a Baxter robot costs around $25,000) is giving even small-to-medium-sized retailers the ability to incorporate them into their warehouses, distribution centers and logistics facilities in an effort to reduce costs, improve efficiency and achieve a competitive edge.

These robots can work for thousands of hours without stopping. In ‘Robots and the “New” Supply Chain: 2015-2020’ it is noted that a Baxter robot had worked for over 2,000 hours straight sorting plastic in a factory. This work rate is neither possible nor affordable with a human workforce. It would require 4 shifts every 24 hours, and at the going rate of $9 per hour, would cost over $19,000 in the same period, which is almost 80% of the entire cost of the robot.

While some retailers are embracing the use of robotics, others are concerned over possible technological disruptions. RILA will discuss these advancements and how they are affecting the industry. 

Omni-channel
As consumers increasingly digitize their shopping experiences through the use of smart phones and the internet, they no longer view a brand’s brick and mortar, catalog and online shopping channels as independent entities. The consumer expects fluidity between each channel and expects to be able to conduct the same transactions in store, online and on the go. Consumers expect nothing less than a seamless omni-channel experience and retailers must adapt.  

Combined with the consumer expectation of near-instant delivery and free shipping and returns, transportation costs are on the rise and are chipping away at the bottom line.  A new survey of retailers by JDA Software Inc. has found that 68% of retailers are experiencing rising fulfillment costs. The highest costs were in e-commerce shipping and returns and in services like in-store pickup for online orders. With shippers already attributing 66% of their logistical operations costs to transportation, it is critical for shippers--especially retailers-- to optimize their supply chains and distribution networks in order to successfully and profitably meet the rising demands of this omni-channel consumer.

Unfortunately, the current infrastructure makes it difficult for retailers to expand their e-commerce sales and provide a seamless, positive omni-channel experience for consumers while still preserving profit margins. A survey of over 1,000 online U.S.-based shoppers by JDA Software Group Inc. revealed that 50% of consumers who opted to buy online and pick up goods in a store in the past year encountered problems getting their purchases.

Offering products online may be easy, but getting the goods to consumers is not.  RILA will talk in greater detail about the omnipresent omni-channel and how retailers are adapting.

Supply chain optimization is key
It is clear that the retail supply chain's role in serving the customer is changing. Now more than ever, supply chain managers must do more with less and ensure they have an optimized supply chain that can adapt to withstand future supply chain disruptions and run efficiently and cost effectively in order to meet rising consumer expectations.

Having a capacity contingency plan in the form of a diversified modal transportation portfolio is one way to protect your supply chain from disruptions caused by capacity volatility. Please stop by CSXT Intermodal’s booth (#810) at RILA to further discuss any of these topics as well as how intermodal rail can benefit your supply chain. 

 

 

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