Unfettering the Supply Chain

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Darin Cooprider has worked all sides of the supply chain, from retailers like The Home Depot and Kmart and manufacturers like Nabisco to building materials supplier Johns Manville. He is currently vice president of supply chain solutions, retail/consumer products for third-party logistics provider Ryder.

Cooprider recently spoke with STORES contributor David P. Schulz about supply chain trends in the retail industry.

How has technology changed the retail supply chain over the last decade?
While not new, a big impact has come from the proliferation of POS data systems and self-checkout verification. These tools have driven data quality and enabled information to flow unfettered across the supply chain.

What do you mean by “unfettered?”
The distribution of information has always been a critical component of retail supply chain management. In the past, POS data has been filtered and adjusted by the various stakeholders who touch the information as it’s shared across supply chain partners — from store personnel to merchants to manufacturers, distributors and third parties.

Today, information about what is selling, its velocity and variability, can be posted, aggregated and shared across the supply base virtually instantaneously. This has set the stage for increased collaboration by providing the ability to get everyone on the same page and working with the same information.

You mentioned self-checkout verification systems. What is their role in this?
The introduction of self-checkout and associated verification systems has required a comprehensive refreshment of the underlying product attribute data in order to ensure accuracy within the checkout process. At checkout, each product is scanned, bagged and weighed. Behind the scenes, the system is cross-referencing the weight of scanned products to ensure that the consumer is purchasing the intended products and that nothing has been mislabeled or incorrectly priced, either accidentally or intentionally.

Wasn’t RFID supposed to do this?
When RFID came out 10 to 12 years ago, it was intended to promote accuracy and item-level tracking within the overall supply chain. Due to technology issues, cost, application and readability, RFID hasn’t quite met the industry’s expectations. The jury is still out as to whether RFID will ever be broadly applicable within the consumer products environment.

That said, Ryder supports a number of RFID applications on behalf of our customers — typically, those who are involved in the consumer electronics industry, where relatively higher product values make the investment worthwhile. Although many promoters of RFID technology have realized that it is not a “magic bullet,” companies continue to seek technologies that have the potential to increase the speed and improve the accuracy of information exchange.

How has the POS-generated data affected the collaborative relationships among supplier, carrier and retailer?
One goal of collaboration is to remove unnecessary inventory from the supply chain and replace that inventory with accurate, timely information. POS data collection and distribution has improved collaboration as a result of all parties having access to the same level of information. This has begun to address the “bullwhip effect” that has challenged supply chain managers for decades.

Bullwhip is created as partners in the chain inject their own bias upon the data received from their upstream and downstream trading partners. The compounding effect of this bias produces larger-than-expected changes in outcomes, given relatively minor changes in inputs.