ProMat 2019 Takeaways

ProMat 2019 is where manufacturing and supply chain innovation comes to life, in person and in action.   

As the trend towards eCommerce and direct-to-consumers continues to increase, so does the attendance and size of ProMat.  This year was a record breaking 45,000 attendees. 

ProMat was the place to see all the current trends and technological advancements in hardware, software, robotics, AI, machine learning, and the automation of manufacturing and warehousing processes.  Which, some are calling the Fourth Industrial Revolution…

ProMat was a great way to spend the week with our customers and partners. We also gained valuable insight and takeaways from the show:

  • Everyone was talking about the labor shortage.  We’ve seen this trend building over the past few years, but it is an officially legitimate fear about how to address a problem that will continue to get worse.
  • Everyone is jumping on the labor trend and building a story around how their product / service will improve or address the workforce shortage issue.  In the past years there were always a few sessions geared towards productivity and the workforce. But, this year there were over 20 different sessions focusing on the topic.  A very noticeable increase!
  • Talking with our clients, the looming labor shortage has companies pushing aside traditional and acceptable 2-3-year capital ROI’s for large MHE and automated solutions that sometimes wont pay back for 2-3x’s that duration.  It is hard to imagine that anyone knows what the supply chain will look like in ten years, but companies are taking the plunge on these massive investments. 
  • Goods-to-Person style robots are becoming increasingly popular and affordable.  In 2012, Amazon purchased KIVA securing for itself virtually the entire large-scale robotic logistics market all at once.  There was an almost instant void in the marketplace.  Since then, patents have expired, and companies have built their own versions to compete, and in many cases, exceed the KIVA systems.  These were on full display at ProMat.
  • The Automate Conference, which is full of next generation robots and pure automation, continues to grow.

Final Take…

The ProMat show was a great place to experience new advancements in technology. Many of the companies we spoke with are realizing that their long-term supply chain solution will continue to be a balanced blend of technology and their workforce.  We look forward to seeing how these trends evolve at MODEX next year. 

Connors Group Announces Two New Hires

Canonsburg, PA – CONNORS GROUP, a market leader in productivity improvements through people-centric labor and process optimization, is pleased to welcome two new Directors to the team: Bruce Dzinski and Jim Malafronte.

Bruce Dzinski joined Connors Group as a Director and brings 13 years of consulting experience and over 35 years total industry experience; including executive leadership in Distribution, Logistics and Transportation. Bruce’s areas of expertise include DC design and process improvement, transportation and network evaluation, facility capacity, store operations, labor management, e-commerce and omni-channel fulfillment, retail and wholesale fulfillment and operations. Bruce will be in the Philadelphia area where he resides with his wife Donna and keeps active by watching and participating in sports as well as maintaining a vigorous community and social schedule with friends, family and their three Aussies (Zephyr, Miles and Maizy).

Jim Malafronte joined Connors Group as a Senior Director and has over 30 years’ experience in retail and consulting, both with big four and boutique firms. Jim’s areas of expertise include retail operations, workforce management, process reengineering, customer experience, and in-store retail technology. Jim will be working out of the Connors Group Atlanta office and enjoys physical fitness, watching college football, and music.

 “We are very excited to have Bruce and Jim join Connors Group. We are experiencing tremendous growth and their expertise will be invaluable to our clients,” said, Jeff Peretin, President of Connors Group. “The fact that we were able to attract industry experts like Bruce and Jim, speaks volumes about our culture and the level of work we are producing for our clients.”

Top 3 Reasons for Mobile Device Adoption in a Retail Environment

This is the second in a series of blogs – in which I will be reviewing and discussing a variety of technologies that are redefining how some retailers operate their stores.    

Mobile Devices

Given how ubiquitous mobile devices are in our personal lives, and the amazing benefits and usefulness mobile devices provide in our personal lives, I’m always surprised by the number of retailers, particularly “bigger” box retailers that have not fully-adopted mobile devices within their stores…

The benefits of equipping Store Associates or at least Store Managers are vast in a retail setting.  Years ago, I could understand and appreciate the hesitation to invest in mobile devices due to cost or concerns about device reliability.  However, those two major roadblocks are largely gone – mobile devices continue to rapidly drop in price and the stability of today’s operating platforms is fantastic.

To further the argument for mobile device adoption, here are the top 3 reasons that I’ve seen span across all retail verticals and are typically the foundation for any ROI analysis done by a retailer when investing in mobile devices…

Top 3 Reasons for Mobile Device Adoption in a Retail Environment:

1 – To Save the Sale:

Store Associates equipped with mobile devices can quickly and easily play defense by offering customers in-store ordering options for out-of-stock or specialty items. Perhaps even adding on-the-spot incentives, like additional discounts and/or free shipping for ordering in-store, as opposed to leaving and either going to another retailer or visiting an online competitor.

2 – To Improve Efficiency:

The labor crunch is on in retail.  Retailers are scrambling to look for ways to make their Store Associates more productive.  Like in our personal lives, our smartphones can largely eliminate the need to use our computers.  The same holds true in a retail setting. Instead of forcing Store Associates to make countless, non-value-added trips to the back room to use the “office computer”, mobile devices allow Store Associates to act without leaving the sales floor.  Looking up prices, checking task manager, printing signage, responding to email – the list goes on and on.  Simply put, a mobile-equipped Store Associate is significantly more efficient and is better positioned to deliver customer service – a true win-win.  

3 – To Speed-Up Communication:

Retailing is fast paced.  and that creates challenges. Store Associates often need to react very quickly.  For grocery retailers, reacting quickly to recalls can literally mean the difference between life and death. For mass retailers, reacting quickly to a price change or out-of-stock notification can mean millions of dollars. Regardless of the situation, relying on traditional forms of communication – email, phone call, intranet posting, etc – to notify Store Associates of these situations simply does not cut it anymore.  Reactions in retail need to be near real-time and the best way to achieve that is by equipping Store Associates with mobile devices.

Bottom Line…

 Mobile is now a fundamental retail technology that should be deployed by all retailers, given the ever-reducing price point of the technology and the immediate, tangible benefits.

Retail Evolves into Instagram

In a recent press release, Instagram announced the ability to sell products directly through a post. At first, the new functionality will be tested and only available for a select number of brands. If Instagram’s test proves successful and expedites the buying process (which has been proven to increase sales conversions), we could see an influx of brands and “influencers” rushing to take advantage of this new form of Frictionless Commerce.”

Of course, for retailers there will be multiple questions to consider:

  1. With all the data breach concerns (Facebook is the parent company to Instagram), how will they ensure the personal data of their customers is safe?
  2. How will brands need to adjust their manufacturing to ensure they can meet customer demand?
  3. How will brands manage logistics as customers have grown accustom to getting shipping for free and delivered in less than 2 days with Amazon?
  4. The biggest question still lies with Brick and Mortar locations. Will this continue to move sales to be more online away from retail locations? Or could this evolve to allow pick-up in store through an Instagram purchase? 

As retail continues to evolve and the desire for customers to buy what they see, it is imperative for brands to stay ahead of the curve. In this case, retailers will need to ensure they are dedicating the time need or bring in the proper resources to ensure they are getting the most out of these or any new/disruptive solutions.

Cash Wrap Improvement and Throughput Considerations

Customers hate to wait. And, according to M.I.T. operations researcher Richard Larson, widely considered to be the world’s foremost expert on lines, their perceived wait time is longer than actual wait time by as much as 36 percent…

To remedy this, retailers have employed many tactics over the years to reduce customer wait times and perception.

For example, …

  • Moving from multi-queue to single-queue
    • This eliminates that frustrating feeling that we all have experienced at the grocery store when the person in front of us seems to be paying with pennies and fumbling with their coupons
  • The move towards self-checkout to provide customers with a do it yourself, you are in control experience
  • Adding the merchandise throughout the queue to distract customers with the added hope of incremental sales via impulse buys
  • Mobile checkout options

And while these tactics can help, many retailers are taking it much further by looking to  simple Industrial Engineering concepts that can save seconds and to impatient customers, seconds add up…

  • Cash Wrap:
    • Verifying that every cashier has the supplies and items they need to effectively process transactions
  • Process Improvement:
    • Improving or eliminating existing transaction process steps
  • Workflow:
    • The order that the customer transaction is processed and the sequence of customer prompts to drive desired behaviors
  • Technology / POS Updates:
    • A more logical flow of screens and steps within the POS or the reduction of button presses.
  • Labor Standards:
    • Know the cashier expectations
      • Manage to those expectations and track Cashier performance

Since the Cash Wrap is the last experience the customer has with the retailer; retailers need to consider the value of seconds…Not just as a freed labor opportunity, but as an opportunity to increase the customer throughput and reduce lost sales due to line abandonment.

Fix Operations Before Fixing the Labor Hours

Retailers in today’s climate are wrestling with the “right” amount of labor to supply to their stores to drive the experience and returns expected.  This too often becomes a paradox between what stores really need to fulfill the brand promise and what the company can afford. Comparing top down financial labor budgets and bottom up operational based budgets is and apples to oranges activity. Attempts to reconcile the dichotomy are often compounded by operational problems at the store level.  Most companies are unable to articulate the root cause and associated impact of what is driving the disconnect, which leads to addressing the wrong issues. 

 Top down financial budgets are primarily calculated using historical data, such as labor as a % of sales (with some store specific influences), most often compounded by some arbitrary improvement goal.  Financial budgets tend to not only ignore the actual labor required, but also do not provide operators with insights into how they should spend their labor. Bottom up labor is calculated based on the actual task work that occurs in the workplace and are rooted in the service expectation levels defined by the brand promise. Bottom up labor budget models too often tend to be raw labor, and the full picture of required labor hours is not revealed until scheduled shifts are applied and staffing factors kick in (minimum shift lengths, wage rates, meals and breaks, utilization, etc.). This causes many bottom-up labor budgets to be understated, which further complicates the comparison to financially-driven budgets.

 Where most retailers come up short is ensuring that the stores are not only funded correctly, but also that they are doing everything they are supposed to be doing with the labor. It’s often an effectiveness question, rather than a quantity question. If stores are performing poorly, increasing their labor budget will not necessarily have a positive impact on their results. But reducing their labor hours when they perform poorly certainly increases the problem. 

Forcing store managers to determine how to apply labor cuts, when they too often are struggling to be effective with enough labor, yields unpredictable results. The first activities to be “cut” are usually the ones that are least tangible; customer service, cleaning and visual presentation…However, the decision on what to “cut”, when left up to the store managers to decide, will be highly inconsistent and dependent on personal priorities and experiences. The darkly ironic impact of these decisions is that they almost always degrade the top line, which only forces the company to exert more pressure in the next round of budgets.

This is the danger in starting with technology and engineering without addressing the execution element first. Chronic underfunding, without guidance on which operational standards to relax, will deteriorate any returns that are expected from fixing the funding. After stores have become accustomed to managing their operations in a constrained labor environment, if relief is provided it will not go where it is intended because stores have become used to a “new normal” and often don’t recognize where the relief is needed. Applying a mathematical “fix” by giving stores increased labor budgets, even when founded on an activity-based labor model rooted in engineered labor standards, may only compound underlying execution problems.

The most-successful retail leaders are taking a step back and understanding that transforming their operations first — then building their labor model on top of this now solid foundation – is the only way to effectively recapture the customer experience and deliver the brand promise that made them successful in the first place.

RILA 2019 Link Conference Recap

On February 24-27, 2019 The Retail industry Leaders Association (RILA) held their annual conference in Orlando, Florida. As a first-time attendee, I found that the conference delivered on its promise of engaging topics. There are a couple of themes and three specific sessions that I found particularly impactful.

In terms of themes, the one topic that was on top of mind in most sessions was labor. This manifested itself in conversations around sourcing, developing, managing and retaining labor in an era of extremely low unemployment.

Gary Maxwell, from Dollar Tree, laid out a simple yet effective strategy for combating the recruiting challenges experienced by those in the Supply Chain and Warehousing industries.

He recommended:

  • Expanding the recruiting pool by going after non-traditional workers
  • Connecting jobs to a higher purpose to combat some misconceptions about the quality of the work
  • Selectively automating functions to reduce the physical demand of the job

In a panel session, Chris Bright VP, Supply Chain Operations for Nordstrom highlighted the need for companies to consider the cost of attrition when planning their labor needs. He drew the analogy between a labor model and a car, where technology provides the power, engagement is the fuel, but culture is the transmission that allows all the potential to become reality. He also emphasized the need to focus on people to achieve operational goals.

There were numerous wonderful discussions and presentations from Dick Johnson of Footlocker, Arthur Valdez of Target, and Dean Carter from Patagonia among others…But, the presentation that stood out the most for me was from Barbara Kahn of The Wharton School of Business.

Barbara spoke on the Shopping Revolution and outlined a model to help explain, among other things, the emergence of Amazon as a world power. She outlined four strategies for differentiation, and showed how successful companies dominate one, leverage it to become a leader in another, then maintain a “good enough” position in the other two. The four quadrants in her model break down between product benefits and customer experience on one axis and increasing pleasure versus eliminating pain on the other axis.

The four quadrants are:

  Product Benefits Customer Experience
Increase Pleasure Brand (i.e. Zara) Experiential (i.e. Sephora)
Eliminate Pain Points Low Price (i.e. Walmart) Frictionless (i.e. Amazon)

Suffice it to say, I am excited to read her book, The Shopping Revolution: How Successful Retailers Win Customers in an Era of Endless Disruption.

I found the RILA 2019 Link conference to be of tremendous value and cannot wait to go back next year. I would highly recommend it to anyone who is looking for a fresh perspective on the current state of the Supply Chain industry, who enjoys networking with other senior executives going through similar challenges, or for anyone with an inquisitive mind who just enjoys learning.

Click and Collect, BOPIS and Curbside

Click and Collect, BOPIS and Curbside

It’s been two years since Grocery Dive published this article. Chris Kelly, one of our Connors Group Directors is quoted and much of what he said then is still relevant today.

READ IT HERE

Some Key takeaways that still hold true:

  • Digital retailing is crowded. What once was viewed as a promising new revenue stream, is quickly becoming as complicated as brick-and-mortar.
  • The concerns over labor costs, competition and slim margins are still at the top of Executive’s minds.
  • Convenience for the consumer comes at a price for the supermarket.
  • To move into the black, retailers need to draw in new customers and get existing ones to make more of their purchases with them.
  • Risk eroding the in-store experience e.g. workers crowding the aisles as they pick out products.
  • For consumers loyal to one retailer, e-commerce can encourage them to build bigger baskets by recommending products, running digital ads, saving past orders, among a host of other features.

What personal experiences with Click and Collect, BOPIS and Curbside resonate the most?

Leave your comments/thoughts below.

Connors Group Announces Partnership with Former Giant Eagle Executive

Canonsburg, PA – CONNORS GROUP, a market leader in productivity improvements through people-centric labor and process optimization, is pleased to announce a partnership with EWT Consulting, Inc.; Gene Tommasi, President of EWT Consulting, Inc., will serve as an Executive Advisor to Connors Group. 

Tommasi, formerly the Executive Vice President of Retail Operations and Supply Chain at Giant Eagle, brings over 35 years of experience and industry insight to Connors Group. While with Giant Eagle, Tommasi was instrumental in spearheading hundreds of successful initiatives where he oversaw corporate retail operations, wholesale sales, distribution, real estate and construction.

“We are excited to welcome Gene onto our team”, said Jeff Peretin, President of Connors Group.  “EWT and Connors Group are natural partners given our complimentary methods to helping clients improve their businesses through the daily pursuit of operational excellence.”

Tommasi emphasized that “Partnering with Connors Group is a great opportunity for me to leverage my experience in the retail and wholesale industries to help clients meet the needs of their customers through the implementation of optimized operations, distinguished customer service, and a highly engaged workforce.”

About Connors Group

Connors Group was formed in 2008 with the mission of helping our clients achieve real, measured and sustainable operational improvement.

As a proven management consultancy specializing in workforce performance and productivity improvement, we help our clients achieve long-term operational success through proven methodologies and extensive field experience.

About EWT Consulting, Inc.

Founded in 2018, EWT Consulting, Inc. provides clients continuous improvement through operational excellence, work design development, distinguished customer service and cost elimination. EWT Consulting works within all industries, but specializes in retail operations, manufacturing and supply chain.   ed0 Smart

Wrapping up #NRF2019 with Our 3 Key Takeaways

The NRF Big Show is the world’s largest retail conference and expo. And while the official numbers aren’t in yet, in years past, the show has boasted over 37K attendees, 16K Retailers and more than 800+ exhibitors from 99 countries.

The sheer volume of new ideas, technologies and companies we experienced this past week was incredibly inspiring. And while we could create a top 50 or even 100 list, we’ve settled on 3 key takeaways from #NRF2019:

  1. Associate Engagement
  2. Retail Analytics and Customer Insights
  3. Machine Learning and AI

Associate Engagement

The daily pursuit of continuous operational improvement shouldn’t come at the expense of a companies most-valuable asset, it’s employees. As a people-centric organization, it was great to see that there were many new technologies and platforms focused on improvements in task management and employee communication. Tools and apps like those focused on shift-swapping are quickly becoming organically adopted by employees, which in-turn is garnering the interest of management. There is a clear win-win when associate engagement and morale are improved.

Retail Analytics and Customer Insights

Pulling disparate information sets together, like online sales, instore sales, CRM and traffic data is challenging. There were many offerings from organizations promising a more holistic view of the customer. Queue management, shopping patterns, dwell time, and getting employees where they need to be at the right moment were also topics and focal points for a variety of dashboards and data aggregation tools promising the holy grail of actionable consumer insights.

Machine Learning and AI

According to this NRF session summary, by 2021 75% of retailers will be using AI /Intelligent Automation for supply chain and demand forecasting, consumer intelligence, and marketing campaign management. And while we agree that adoption is and will continue to occur, much of the hype around AI and Machine learning is very reminiscent of the “Big Data” and “Cloud” buzzwords and phrases we’ve been seeing and hearing now for the better part of over 5 years. That said, industry giants like IBM, Google, Microsoft and Salesforce will continue to lead the charge, while many will take the wait and see approach. Either way, it’s here and not going away, but right now it still feels like there are currently a lot of half-baked solutions out there looking for problems to solve.

What were your takeaways?