The retail sector offers numerous and varied opportunities for those interested in a career in logistics from operations, planning and projects, to strategic development and e-commerce.
No longer can we think of logistics as the simple movement of stock between factories, warehouses and shops. The term now encompasses all aspects relating to the planning and movement of goods as well as the necessary information flow that must accompany it.
Analysis of past events and the prediction of future demand trends are also vital if availability of raw materials, component parts or finished goods is to be maintained.
Ensuring that customers can get what they want, when they want, without incurring excessive inventory levels and associated costs in the process, is now such an important role within the supply chain that it demands board level representation along with the finance and marketing teams.
Operational roles exist at several different points within the retail supply chain, requiring cross departmental cooperation and an awareness of the impact that decisions can have on others. Predicting future demand trends in conjunction with commercial and marketing teams and working collaboratively with suppliers, transport providers and customers to ensure a continuous and smooth flow of goods is a key activity for the logisticians in these roles.
Some of these impacts require companies to create new logistical operations to accept the return of goods, for example, which require careful costing, planning and recruitment, giving an opportunity to develop and create company and industry benchmarks.
Case study – From cow to consumer: The logistics of milk productionSource: Freight Transport Association YouTube channel
Careful planning of the anticipated physical movement of stock is required in order to ensure sufficient transport is available and that there is adequate outbound movement of goods in distribution centers and stores, to allow for the projected inbound arrival of goods. Seasonal (Christmas, summer, etc), Calendar driven (Valentines, Mothers Day, etc), and promotional (World Cup, Olympics, etc), activity can have a major impact on demand volumes, with factors such as adverse weather conditions providing very little time to create and implement action and contingency plans to ensure maximum customer availability.
Close analysis of past events is required to project short, mid and long-term movements with strategies put in place to ensure these plans do not create operational issues elsewhere within the supply chain, leading to a reduction in availability.
No company can afford to stand still in the field of logistics. Ever more creative ways of managing inventory and distributing stock need to be found in order to minimise costs while maximising availability with most innovative ideas coming in the form of small or modest improvements on current working practices. Logistical projects can cover a wide spectrum of supply chain areas, from maximising warehouse capacity and capability, to reducing handling costs of product via Retail Ready Packaging or employing third and fourth party logistics providers.
Each project will tend to involve cross-functional working and help develop awareness of other areas and opportunities within these functions. As well as creating new solutions and working practices for a single company, projects also provide the opportunity to create future ‘best practice’ that can be implemented and benchmarked throughout the retail and associated industries at home and abroad.
The ability to understand the future direction of the industry and develop long-term (5–10 years) strategies and goals helps keep retailing at the forefront of logistical development. This area calls for the individual to have excellent communication and influencing skills, as they will be required to gain the sponsorship of company managers, directors and supply partners, ensuring that these strategic aims are aligned with the needs of the company.
You must be able to demonstrate that your solutions are cost-effective providing qualitative and quantitative evidence and be able to benchmark the company’s performance against set targets as well as other operators in the industry.
With more companies sourcing products and services from overseas than ever before, there is a greater need for logistics teams to deliver end-to-end solutions crossing international and continental borders.
This trend provides opportunities to gain a greater understanding and knowledge of international logistical issues and challenges, such as planning the just-in-time delivery of clothing goods from the Far East six months out.
The scope for integrating different components of the supply chain using multi-modal delivery methods and maximising efficiencies through new learnings and ways of working is varied and exciting. The logistician must remember the need to balance reduced purchase costs and improved margin, with those of improving availability and reducing stockholding when looking at the bigger sourcing picture.
Business to business (B2B) and the use of internet technology has increased rapidly in the retail sector over recent years. Developing these B2B tools to make collaboration with partners and suppliers better, simpler and more efficient is crucial to improve the promotional planning process through the use of collaborative, internet-based tools, for buying teams, suppliers and logisticians to simplify the flow of data.
The aim is to provide data that allows suppliers to view demand and stock data for individual products down to store level, allowing accurate production planning and transport requirements to be forecast. This sharing of information enables a collaborative approach to be taken across the entire supply chain, from procurement of raw materials to delivery of finished goods to stores, helping to smooth out the peaks and troughs of demand that can otherwise be experienced and maximise product availability to the end consumer.
Consumers are also embracing e-commerce, with market analysts Verdict reporting that UK consumers spent £14.7 billion on retail purchases online in 2007, an increase of 35% on the previous year and the IGD forecasting that the online grocery market will be worth £5 billion by 2012.
Increasingly consumers are using the internet to research products and find the cheapest deals, even though some of those purchases may eventually be made in a store. The growing trend of ‘clicks and mortar’ retailing provides new challenges for the supply chain, with the need to make small home deliveries cost efficient and the development of reverse logistics to return damaged, faulty or unwanted goods.
Case study – luxury goodsSource: Freight Transport Association YouTube channel
Consolidation of goods, reductions in food miles travelled and collaboration between multiple retailers and suppliers are all areas undergoing radical changes as a direct response to global warming. Retailers are bringing parts of old canal networks back to life, not only creating a better environment to live and work in but also helping to create new jobs. Transport fleet managers are reviewing vehicle usage and training driver’s ways in which to improve driving practices and behaviours to maximise fuel efficiencies. The need to reduce carbon emissions has become high on the agenda of almost every business and individual in recent years, with retail companies being one of the main trailblazers in creating innovative ways to reduce carbon footprint.
In brief, the retail industry can offer today’s logistics and transport professional a plethora of opportunities to learn, grow and develop, shaping the future of tomorrow’s industry and the way in which we shop.