Creating customer value using SCM retail technologies and systems
Summary
TLDR在这段对话中,REI的供应链商品和技术副总裁Amit分享了他在信息技术和供应链管理方面超过20年的经验。他讨论了REI如何通过其分销中心和商店网络,以及与供应商的合作,提供全渠道零售体验。Amit强调了技术在提高库存可见性、优化订单履行和增强客户体验方面的作用。他还提到了REI如何通过其会员所有制合作模式,专注于共享价值而非股东价值,以及如何通过循环商务和二手装备销售来推动可持续性。此外,Amit还讨论了REI在疫情期间的应对策略,包括如何快速适应变化,提供路边取货等新服务,并在供应链中断期间保持客户满意度。最后,他分享了自己作为MIT供应链管理MicroMasters项目校友的经历,以及这些课程如何帮助他在职业生涯中取得成功。
Takeaways
- 📚 Callum Betts 和 Laura Lega 是 MITx MicroMasters 供应链管理课程的课程负责人,他们在 MIT 运输物流中心参与全渠道和可持续性相关研究。
- 🏆 Amit Kothary 作为 REI 的供应链、商品采购和合作品牌技术的部门副总裁,拥有超过 20 年的信息技术经验。
- 🛍️ REI 作为会员所有的合作零售商,强调户外生活的重要性,并通过实体店铺、在线商城以及循环商务提供户外装备和体验。
- 🔄 Omnichannel 策略通过提供多种履行选择(如线上购买店内自提、直接发货等)来增强客户体验,但同时也增加了技术、流程和库存管理的复杂性。
- 📈 技术在 REI 的分销网络设计中发挥关键作用,包括新分销中心的选址和网络流量的模拟,以满足业务增长和客户需求。
- 🌐 疫情期间,REI 利用其 Omnichannel 能力快速适应,如通过在线零售和推出路边取货服务来应对门店关闭的挑战。
- 🔧 技术系统的选择是 REI 持续考虑的问题,包括使用集成的 ERP 系统或最佳实践解决方案的组合,以满足不同的业务需求。
- ♻️ 可持续性是 REI 的关键议题,通过循环商务模式(如二手装备销售)来减少碳排放,目标是到 2030 年减少 55% 的碳排放。
- 📈 REI 利用数据分析来优化库存、顾客承诺和总成本服务,同时最大化客户体验。
- 📊 通过 MicroMasters 项目,Amit 扩展了供应链知识,建立了专业网络,并将其应用于工作中,特别是在 Omnichannel 优化解决方案的共同创造和创新上。
- 📨 顾客退货体验是 Omnichannel 策略的重要组成部分,REI 通过技术简化了退货流程,提高了客户满意度。
Q & A
如何理解REI的全渠道体验对顾客价值的影响?
-REI的全渠道体验通过提供多样化的购买和履行选项,如在线购买、店内自提、家庭送货等,增强了顾客价值。这种策略不仅满足了顾客对灵活性和便捷性的需求,而且通过无缝的购物体验,增强了顾客对品牌的忠诚度。
REI在技术系统方面如何应对全渠道策略带来的挑战?
-REI通过集成ERP、仓库管理、订单管理系统、销售点系统等技术系统,确保了对库存的实时可见性,以及对订单履行的优化。这些系统共同工作,支持REI在全渠道环境下提供一致的顾客体验。
REI如何利用技术来优化其分销网络设计?
-REI使用网络设计和建模软件,结合客户数据、产品流、存储需求和可持续性目标,来评估和决定新的分销中心的位置和设计。技术帮助REI在满足增长需求和顾客期望的同时,优化了成本和服务水平。
在新冠疫情期间,REI如何调整其供应链流程?
-面对新冠疫情带来的挑战,REI迅速调整了其供应链流程,包括临时关闭实体店、增加线上订单处理能力、推出路边取货服务,并在供应链中断时通过“通知我何时有货”功能来管理顾客期望。
REI如何量化和跟踪其可持续性目标的进展?
-REI通过收集和分析来自不同数据源的信息,包括能源使用、废物管理、产品制造和分销过程等,来量化和跟踪其可持续性目标。此外,REI也在探索合作伙伴关系和技术解决方案,以提高数据收集和报告的准确性。
REI在选择供应链系统时是如何权衡ERP系统和最佳实践解决方案的?
-REI在选择供应链系统时会考虑ERP系统的集成优势和最佳实践解决方案的专业性。对于标准化和非差异化流程,REI可能会倾向于使用ERP系统以简化集成。而在需要差异化和客户接触点更近的领域,REI可能会选择最佳实践解决方案来提供更专业的服务。
REI是如何处理drop ship(直发货)模式下的库存和订单履行的?
-REI通过与drop ship合作伙伴建立合作关系,扩展了产品种类并满足了客户需求。在处理库存和订单履行时,REI面临的挑战包括获取合作伙伴的实时库存信息、协调不同的服务水平以及管理退货流程。REI需要与合作伙伴进行紧密的技术集成,以确保顾客体验的一致性。
REI如何通过技术提高供应链的透明度和效率?
-REI通过实施先进的供应链管理系统,如ERP和WMS,以及利用云技术、API和微服务等现代技术,提高了供应链的透明度和效率。这些技术的应用使得REI能够实时监控库存、优化订单履行,并快速响应市场变化。
REI如何确保其供应链的可持续性?
-REI致力于通过多种措施确保供应链的可持续性,包括使用可再生能源、实现零废物目标、减少包装,并在其分销中心实现LEED认证。此外,REI还在探索如何减少上游供应链的碳足迹,比如通过使用清洁能源和提高制造过程的能效。
REI在疫情期间推出的路边取货服务是否会继续提供?
-REI很可能会继续保持路边取货服务,因为这种服务为顾客提供了便利性,并且已经逐渐成为顾客的期望和习惯。尽管疫情限制放宽后,顾客可能更倾向于亲自到店购物,但路边取货作为一种增值服务,仍能满足顾客对便捷性的需求。
REI如何衡量其供应链技术创新对业务的影响?
-REI通过评估技术创新对顾客体验、订单履行效率、库存管理、成本节约等方面的影响来衡量其供应链技术创新的业务价值。此外,REI还会考虑技术如何帮助公司实现其可持续性目标,并在长期内提高竞争力。
Outlines
😊 Introduction by the Co-Hosts
Callum Betts and Laura Lega, co-hosts for the event and course leads in MIT's MicroMasters program in supply chain management, introduce themselves and express their excitement about the day's discussion. They highlight Amitko Kami, Vice President of Supply Chain Merchandising and Co-op Brands Technology at REI, who will share insights from his 20-year experience in IT.
📈 Omnichannel Strategy Challenges
Amitko Kami elaborates on how REI's omnichannel strategy aims to provide seamless customer value across channels, despite the growing complexity from the surge of new choices. He shares REI's goals in managing inventory, ensuring customer satisfaction, and optimizing overall supply chain costs.
🏬 Evaluating Supply Chain Network Expansion
Amitko Kami details the data-driven approach in selecting Tennessee for REI's new distribution center. Technology plays a vital role in assessing customer demographics, demand patterns, and fulfillment needs while ensuring sustainable practices to reduce carbon emissions.
🔄 Supply Chain Disruption Solutions
REI had to swiftly adapt its operations during the pandemic, shifting entirely to online retail when stores closed and introducing curbside pickup. Amitko describes how they leveraged their optimization models and inventory visibility to respond to disruptions and ensure timely deliveries.
🚲 Responding to Pandemic-Induced Demand Shifts
Amitko discusses how unprecedented demand for outdoor products, like bicycles, required fine-tuning inventory models and assembly processes. He shares how they optimized the fulfillment network by adapting technology to navigate assembly capacities and supply shortages.
📦 Circular Commerce and Returns Management
Amitko underscores the importance of customer satisfaction and reverse logistics in managing returns, while circular commerce offers an eco-friendly solution. He describes how REI ensures consistent customer experiences through comprehensive product data and sustainable business practices.
🌍 Creating Customer Value through Circular Commerce
Amitko explains how REI leverages returned items and gently used gear to create customer value and reduce carbon emissions by over 50%. Technology helps categorize product quality, manage resale pricing, and integrate fulfillment channels for these items.
📚 Amitko's MicroMasters Experience
Amitko shares how the MicroMasters program broadened his knowledge, improved his collaboration with colleagues, and provided a vocabulary for connecting with business partners. He encourages current students to network and build connections through events like this.
📝 Audience Engagement and Closing Remarks
The co-hosts thank Amitko for his valuable insights, emphasizing how technology and omnichannel strategies have expanded audience knowledge. They encourage learners to continue engaging with their supply chain studies and apply innovative solutions.
Mindmap
Keywords
💡供应链管理
💡全渠道零售
💡信息技术
💡客户价值
💡逆向物流
💡可持续性
💡电子商务
💡企业资源计划(ERP)
💡优化引擎
💡直接发货(Drop Ship)
💡循环商务
Highlights
Callum Betts 和 Laura Lega 作为 MITx MicroMasters 供应链管理课程的课程负责人,介绍了他们在 MIT 运输与物流中心的全渠道和可持续性相关研究。
Amit Kothary,REI 的供应链商品和合作品牌技术部门副总裁,分享了他在信息技术方面超过 20 年的经验以及在 REI 的工作洞察。
REI 作为会员所有的合作零售商,强调户外时间对于美好生活的重要性,并致力于激励和使每个人能够体验户外生活。
REI 社区拥有超过 2000 万终身会员,近 15000 名员工和 168 个地点,提供户外装备、服装租赁以及户外体验。
Kothary 讨论了全渠道策略如何成为提升客户体验和价值的关键驱动力,并强调了全渠道履行选择的复杂性。
REI 使用技术来优化库存可用性、客户承诺和总服务成本,同时最大化客户体验。
在网络设计和模拟软件的帮助下,REI 决定在田纳西州开设新的配送中心,以提高配送速度并优化服务成本。
REI 致力于通过使用行业领先的可持续性技术和特征来减少碳排放,目标是到 2030 年减少 55%。
COVID-19 大流行期间,REI 必须快速适应,从全渠道零售商转变为一夜之间的纯在线零售商。
REI 利用技术推出了路边取货等新服务,以应对大流行期间的健康和安全指南。
Kothary 强调了在大流行期间保持客户体验的无缝性和无摩擦性的重要性,并介绍了 REI 如何通过技术实现这一目标。
REI 发现通过销售二手装备来减少碳排放,与生产类似新产品相比,可以减少约 50% 的碳排放。
REI 重视循环商务,将其作为实现可持续性目标的关键战略,其中退货是循环商务的重要供应来源。
Kothary 分享了他在 MIT MicroMasters 项目中的学习经验,强调了该项目如何帮助他在供应链领域扩展知识、建立网络,并与业务伙伴建立联系。
REI 计划继续提供在大流行期间开始的服务,如路边取货,以满足客户的便利性和偏好。
REI 正在采取措施减少其碳足迹,包括使用可再生能源、实现零废物项目,并在上游供应链中寻找减少碳排放的机会。
在选择供应链系统时,REI 考虑了 ERP 系统和最佳实践解决方案的优缺点,并根据是否能够为客户带来差异化来做出选择。
REI 通过提供直运服务来扩展其产品种类,但这也带来了库存可用性、客户承诺和退货处理的复杂性。
Kothary 鼓励对供应链技术感兴趣的学生加入 MIT MicroMasters 项目,并建立专业网络以推进他们的职业生涯。
Transcripts
hi everyone welcome thank you for
joining my name is callum betts i'm
honored to be your co-host for today i'm
a course lead in the mitx micromasters
program in supply chain management i'm
also involved in omni channel and
sustainability related research here at
mit center for transportation logistics
and i'm honored to have my co-host here
my colleague laura lega
hi kellan hi everyone and welcome i'm
laura i'm also course leading the
micromaster in supply chain management
program you probably have seen us
already and i'm involved in omnichannel
sustainability and online education
research at the mit center for
transportation logistics today we are so
fortunate to have here with us mr amitko
kami
um amit is the divisional vice president
of supply chain merchandising and co-op
brands technology at rei
and he has over 20 years of experience
in information technology
with that he will share recent insight
from his work at the company so we are
very glad to have you join us today um
so welcome amit
thank you
all right before
um
we get started um with the discussion
let's get event with a quick poll we'd
like to learn more about what you're
hoping to get out of this event and so
let me launch that
poll number one now please
awesome so the poll question why are you
here today um just a few different
options you know i want to learn about
supply chain technology and systems i
want to learn about maybe rei and the
outdoor industry
hopefully we have some micromasters and
some sem students here and you don't
miss any live events that's i'm always
awesome
um while we do that i'll share a little
bit about the agenda for today and so
for the next few minutes we'll have a
minute and write a little background
what he does and how it relates to our
topic today we'll then ask some
questions that we have prepared and then
the last 15 minutes we'll be saved for
your questions and so please use that
webinar q a that little button on the
bottom that webinar q a feature to ask
your questions and be sure to log be
logged in with a name and we won't be
reading any anonymous questions
and we'll also share a few more polls
during the event so be prepared to
participate
and let's check in on our results of
that first poll
okay
so
i can see that most of you want to learn
about supply chain technology and system
and
you want to see how it can improve your
supply chains so that's awesome we will
cover all the topics that are here so we
are very happy that you are interested
on that
and with that in mind i want to admit uh
to get started so i don't know if you're
ready i mean to start we would love to
start by learning
more about your background
yeah sure
um i'll start a little bit about myself
um i've been working in supply chain
related technologies for over 20 years
now
uh i have been with rei for a little
over seven years
in my current role at rei i support
teams that work on supply chain order
management merchandising co-op brands
product design and development uh and
our erp system
these technologies are foundational for
arya's transformation
it is an exciting space to be in for
sure
so little bit about rei
many of you probably know arya already
and i'm hoping some of you are even
co-op members
a quick overview for those of you who
may not be familiar
rei is a member-owned cooperative
retailer based in the united states
at rei we believe time outside is
fundamental to a life well-lived
we exist to inspire and enable life
outside for everyone
today the rei community has over 20
million lifetime members nearly 15 000
employees and 168 locations
rei
sells outdoor gear and apparel we offer
rental equipment
resupply which is our circular commerce
offering and also outdoor experiences
like travel group activities and classes
being a member owned cooperative or what
we refer to as the co-op is fundamental
to rei it allows us to focus on shared
values and not share value
this connects nicely to the theme for
today's event about creating customer
value
and i wanted to share a very short video
about co-op membership
can play the video please
the more we get out there
the more we discover
that there's a community
with room for everyone
and a membership that never expires
that goes wherever we go
that loves what we love
hey
always welcoming us
outside
rei
better is out there
thank you
so one way to think about that video is
that it shows the ideal customer
experience
at rei our customer is the co-op member
who is engaged in outside activities
so as supply chain professionals how do
we create customer value for all of
these members
how does the omni channel experience
fulfill on the vision that we just saw
in that video
awesome well thank you amit we're super
happy to have you here today and thank
you again for sharing your time and your
knowledge with us today and we're also
super proud to have a sem micromasters
alumni here to share an experience today
it's very exciting for us
let's dive into our main topic and
connect me with that question that you
left us with there how does omnichannel
experience bring value to
customers or in your case co-op members
from my personal experience at rei you
can buy in rei stores you can buy at
ri.com and have it shipped to you um you
can buy online and go to the store and
have it picked up and all these kind of
different type of channels
so we would like to know first is what
are some of the unique challenges this
omnichannel strategy presents
compared to like a pure ecommerce or a
pure brick and mortar retailer
maybe from a technology and systems
perspective and has this
strategy help create customer value
yeah thanks kalyn sure let's dive in
uh the omni channel strategy is a key
enabler for driving the customer
experience and customer value
the various fulfillment choices that you
just described earlier online in store
across all of the channels
those used to be a differentiator in the
past
but now as we are seeing digital and
store experiences uh continue to blend
together and digital is driving
significant growth so in that situation
uh these are almost becoming table
stakes now
and with that the complexity continues
to grow and it's not just for technology
but it's for people processes from all
of those perspectives
the primary driver for this added
complexity is the sheer number of
additional choices and decisions
that will be made both by the customers
but also by the retailer
you reference the pure e-commerce or
brick and mortar
models and retailers there
so in those models the decisions are not
easy but relatively straightforward you
have a single pool of inventory that the
customers can choose from
in both of those models you have a
single primary channel that is
generating most of your demand
and you have relatively limited options
to fulfill this demand from
so enter the world of omnichannel and
the number of the variables just expands
in a non-linear fashion
i'll share some numbers from rei
perspective um 20 million members we
have three three soon to be four
distribution centers we have 168 stores
we have more than thousand vendors
so with all of these the complexity just
grows
and there are key uh themes that i would
talk about there are three of them
the first one being inventory and
availability
second is the customer promise and third
is optimizing the total cost to serve
while maximizing the customer experience
so in each of these three themes there
are a number of foundational decisions
that you need to make
which is going to drive how your network
and customer experience is going to be
set up
so let's take the first theme of
inventory and availability
some of the key questions here are
how do you decide on available to
promise inventory
do you have dedicated and separate
inventory pools by channel one for
e-commerce one for stores or do you have
a shared inventory pool
also when we have stores the inventory
picture in the stores is changing
throughout the day as walk-in customers
transact
and do you have any additional sources
of inventory outside of your network so
for example if you are partnering with
your drop ship partners uh that creates
additional complexity because they may
not have the inventory pools dedicated
to you they may be serving multiple
retailers so getting the inventory and
availability right is the foundational
piece which is going to drive all of the
downstream customer experience
then when you have made all of these
decisions it comes to the customer
promise
as the customer is transacting what are
the different choices for the customer
that's going to be driven by if you have
all of the stores do you ship from all
the stores like we do
what are the different options whether
it is shipping to your home shipping to
store picking up from a store or even an
off-site location
and then what are the different levels
of service that you offer do you offer
next day two-day shipping
and then based on all of these
combinations what is the date that you
are going to promise to the customer
that's the most important
aspect here in terms of setting the
right expectation
for the customer to receive the product
and once you have both of these set up
it really comes down to optimization
now you
have so many of these foundational
decisions that are going to lead you to
a number of different constraints that
you would need to optimize against
you have shipping costs from different
locations you have processing costs at
the distribution centers and the stores
you have the capacity both
individual capacity at the location
level and then you have the aggregate
capacity and throughput of your network
when you have stores the product is
selling through at the store locations
at different rates and that's going to
influence
how you manage your inventory life cycle
in terms of the markdowns or
stock outs and things like that
so i think i just rattled through a
bunch of decisions there so all of these
decisions create a very interesting
challenge for technology
we need to have systems in place that
will have reliable accurate and near
real-time information about all of this
inventory
and then we need to have optimization
engine and models in place that can
dynamically respond to various
situations as we go through the year we
have different events we have typical
holiday season you have any special
events or you can run into any of the
external constraints that you did not
even see
ah pandemic was a great example which i
know we are going to talk a little bit
more in details
so you need to have technologies and
systems in place
to also support the operations inside
your buildings whether it is
distribution center store operations
so collection of systems that work
together is a critical success factor in
getting omni channel right
its erp warehouse management order
management system points of sale
all of these are various building blocks
and eventually
your digital properties whether it is
your website or mobile app
those are going to consume this
information and craft engaging customer
experiences it's really quite
challenging to integrate all of these
systems in near real time and make sure
that you can deliver on a great customer
experience
so as any retailer when you start
bringing this omni channel strategy and
experiences to life the initial
experiences may feel transactional at
times they may also feel disjointed
across the channels i go to a stores i
see one thing i go to your digital
property the inventory availability
picture may not seem consistent and it
could be disjointed that's the early
stage of omnichannel
but as the capabilities mature as you
have more systems technology and
processes in place and when you get it
right the end result that we are
aspiring for is a seamless and
frictionless customer journey
and the customer value that this entire
model creates is in a wide selection of
products and services
in flexibility for accessing those
products when and how the customers want
them
and hopefully they build a lifelong
relationship with your brand
thank you amit for those great insights
and very detailed one i i think our
audience would love them
on creating a similar omni channel
customer experience that's amazing
we also know that companies need to
eventually redesign the distribution
networks and this could be because of
disruptions capacity issues or even to
provide improved customer service as is
or satisfy change in demand
so connecting with what you just said uh
recently the company announced that
you're opening the new and fourth
distribution center so we wanted to know
um what role did technology play in
evaluating the network design and making
decisions in terms of um what's the new
additional capacity we would need in the
network and also understanding like i
think it's going to be located in
tennessee correct me if i'm wrong how
did you make that choice so we would
love to learn more about that
yeah that's a great question
so as you said companies need to be
constantly reviewing their supply chain
networks to ensure that they are set up
to meet both the growth that is
happening in the business but also the
ever-changing customer needs and
technology and data play a critical role
in modeling the network and also helping
inform with the decision such as the
location selection as we described where
do we open the distribution center what
is the product flow mix that is flowing
through you know the existing network as
well
and at rei we use our distribution
centers to serve both the stores
as well as e-commerce and digital orders
so that adds even more complexity when
we want to make sure that the right mix
of product is flowing through these
buildings
uh in addition we are also a specialty
retailer
so our number of days of supply in any
given location is pretty low especially
when you compare it to a big box
retailer so in stocks are super
important for us and the proximity has a
huge impact in maintaining the healthy
in-stock levels inside the stores
and then technology absolutely played a
pivotal role in evaluation of the
network design it all starts with
customers first and utilizing the
technology and data that we have um to
understand the key markets the
demographics to strategically place a
distribution center that is close both
to their stores
as well as to our customers
so throughout all of our systems we have
a ton of data
around where our customers and members
live
where the demand originates where it is
actually fulfilled from
what's the product and the category
makes uh that the customers are
purchasing
what's the time taken to deliver the
product uh
after the order is placed to the
customers and what's the replenishment
cycle and time frame to get the product
to the stores
so we have this ton of data
but we obviously need tools
on top of that so this data coupled with
network design and modeling software
is critical in selecting the location
and also designing the flow
and the other piece that i will add
there is the technology
doesn't stop when we uh select a
location but now that you have added a
new node to the location the complexity
of the network grows even more so you
now have even more variables so you need
to have the end-to-end agility and
flexibility in the supply chain to
respond to
any changes whether it is demand
customer behavior you name it
and then we need to have the technology
in place to deliver operational
efficiency simplicity inside the dc's
all the way from material handling
equipment to warehouse management
software to the user experience that you
are going to see
so answering the question about how did
we decide to open this distribution
center in tennessee
this is the classic um location
selection optimization problem that i'm
sure you are studying in the design and
other courses in details so there are a
few considerations and constraints that
i will talk through so we took all of
these ah into consideration and
optimized against those
the first one is the network capacity
and throughput so given our growing
demand both in stores as well as in our
digital channel what's the total
capacity
that we need in terms of just the
storage as well as the throughput
through the dc's and the stores that was
uh one of the key considerations
uh the second and really important point
is around the speed to customer
so with now this expanded network we can
offer various uh levels of service
faster shipping to our customers such as
two-day shipping
uh just to put it in perspective in some
numbers
the tennessee distribution center
is going to have about 5.6 million
existing members that are residing in
the area that would be served by the
distribution center
out of our 168 stores 70 stores can
receive the product from this
distribution center so this
represents a significant increase in the
coverage in number of members that we
can reach with a two-day shipping range
with just standard shipping
um then the third element there is
around the cost to serve so we want to
optimize the overall cost across the
network
and also have the required agility
and i think the fourth and most
important aspect for us from our impact
agenda perspective is around
sustainability
uh i know
ctl is doing a lot of research
specifically on that sustainability
frame so we are looking to leverage
industry leading sustainability and
technology features both inside the
building as well as we are going to get
closer to the customers
and with that we will be able to support
our goal of
reducing our carbon emissions by 55
percent by 2030. so those were the four
factors and constraints that we applied
in our model and then that led us to the
decision of opening the location in
tennessee
that's super fascinating especially the
concept of
you know using a facility for both
channels in some sense you know
replenishment of stores as well as the
online like a true omni channel
you know distribution center if you will
i want to kind of pick up on me are two
ideas that you mentioned so one is the
idea of like flexibility and agility um
and then the other idea mentioned
earlier is the pandemic obviously being
a significant disruption
so these kind of come together in the
sense where you have to use you know
some of these concepts some of these
systems
to adapt to this disruption right
disruption of the pandemic
i mean so kind of pivot this is your
conversation to disruptions you know the
past few years especially with the
pandemic i've seen a lot of them
in our conversation before the event you
mentioned responding to the pandemic
with arya having to close its doors
early on and then reopen them as
restrictions ease was kind of a
significant challenge and so can you
share a little bit about that experience
and the role the technology played that
flexibility that adaptability to this
disruption
yeah definitely
um i think pandemic as for everyone was
a true test of how resilient our
processes and technologies were
we had to assess the situation and
utilize the tools that we had in our
toolbox to respond to varying challenges
that each of the different phases of the
pandemic presented
and in some cases we did not even have
the tools available um so we had to
really build them quickly we had to
advance some of uh the development
because they were part of a road map or
backlog that we were
looking to go after
so before i talk about how we responded
to the pandemic and how we made those
adjustments uh let's take a step back
because i think it is very important uh
to understand the context and the
maturity of our supply our supply chain
uh processes as well as technologies to
see where we were
in hindsight we were fortunate to have a
number of omni-channel building blocks
in place prior to pending
and we were able to build or solve this
jigsaw puzzle by utilizing them
so you could say that we were fortunate
but then it was not by accident
we have been working on our omni-channel
fulfillment strategy for several years
prior to pandemic
so we have the inventory visibility
across all of our channels whether it is
distribution centers stores dropship
vendor partners
so we can use this expanded inventory
pool to better service the customer
needs
we also have the ability to use our
stores as fulfillment notes
i think as you mentioned earlier the
customers can buy online pickup in store
they can ship to store from rdcs we have
wide variety of these fulfillment
options
and we are also able to offer a wide
selection of products to our customers
from our dropship partners
so when we implemented all of these
different fulfillment options and
choices for our customers
the key the glue that held everything
together
was an optimization engine which
optimizes the number of countless
choices this network and these methods
create
so we want to be able to optimize the
total cost to serve while
exceeding the customer expectations
and we had the privilege of a really
sophisticated omni channel capability
with so many optimization levers and
this operation was coming even before
pandemic
so when we were hit by the pandemic
obviously we had to take a number of
different actions so i'll walk you
through three different scenarios
the first one is the omni-channel
operations through various phases of
pandemic as you said first phase we had
to close all the stores then you could
open them but you obviously had to
follow a lot of the health and safety
guidelines
so i'll walk you through all of those
operations
the second one was we had to create
new offerings such as curbside
to respond to the pandemic
and then the third one is
as you have heard in the news and media
all the time supply chain disruption
supply chain shortages that continues to
be the theme as we are hopefully coming
out of the pandemic so how do we respond
to that and what are the new
capabilities or customer service
adjustments that we have to do to
respond to those supply chain
disruptions
so let's talk about the first one the
different omni channel operations
in the first phase the stores had to be
closed overnight and we went from this
omni channel retailer we had to become
an online only retailer pretty much
overnight
and while digital is growing our store
still represents majority of our demand
so we have to now take the optimization
models that were all set and tuned
after a lot of analysis to optimize the
total cost to serve and manage all of
those constraints we had to make the
necessary changes now to balance the
capacity and throughput of the
distribution centers because all of our
demand was essentially being served out
of those three distribution centers
during that phase
so those constraints became really
important in this phase
so now obviously with all of this demand
going through the digital channel we had
to make the adjustments to make sure
that the customer promise the date that
we are promising to the customers the
options that we are promising to the
customers are updated to reflect how the
operations are keeping pace with this
surge in the demand
and then
obviously the stores were closed so we
had to make the necessary adjustments in
our systems and processes to make sure
that we are not reserving inventory
for the store channel which would impact
the choices or availability
for our customers who are transacting
primarily in the digital channel now
so that was the first case and then as
we entered the subsequent phases of the
pandemic now we had the ability to
open our stores and utilize them for
fulfillment so then we were able to use
them to provide some relief for our
distribution centers as well as
productively utilize the inventory which
was within the four walls of the store
and more of that inventory was available
across the channels because we had fewer
number of walk-in customers given all of
the restrictions
the other interesting aspect here is
um
pandemic drove uh increases in demand in
a lot of categories right
everybody wanted to get outside and try
to do certain activities to maintain the
health and all of that so bike is an
example that was one category the demand
for which just took off exponentially
during this phase
and now this presented a number of
different challenges
because by
along with just the inventory there is
assembly process that is required and
that assembly process takes place both
partly in the dc
and then the last set happens
inside the stores
so now we had to optimize this
fulfillment not only based on the
inventory and the availability across
the locations but we also had to take
into account the capacity and the
bandwidth available
for assembly and various services within
those locations so we have to tweak
all of those optimization models and use
different levers
another interesting point with bikes is
pre-pandemic most of our bikes used to
be shipped to the store uh we didn't
have the ability to ship the bikes to
home because they need assembly
servicing and all of those things so now
you have fewer options so the
network that you have which is
replenishing the products to the stores
comes with its own uh constraints and
own challenges so that was another
interesting pivot that we had to make
during this phase
and then
as we were living through that phase
obviously we had to meet all of the
health and safety guidelines
for our customers and also for our
employees so that led to creation of new
fulfillment options we have seen a
number of retailers offer the curbside
pickup for the health reasons during the
pandemic
so we were able to stand this up
relatively quickly it was really just a
matter of weeks before we were able to
respond and create that offering and all
of this was possible because we had
those uh buy online pickup in store and
ship to store both processes and
technologies in place it is very hard to
imagine how we could have stood up
something like curbside so quickly if we
did not have those building blocks
and then i think the last element that i
described earlier is around the supply
chain shortages disruptions shipping
delays backlog of the
ports and all of that
so where are we seeing the impacts uh
from all of those issues
it is certainly impacting the accuracy
and timely delivery of our future supply
and the inventory that is coming into
our network
so if you are a retailer like us that
promises back orders or pre-orders
against this future inventory in
anticipation
that it is going to be available
and manage all of the dates
well good luck with that it's really
been a hard problem to solve
so we had to take multiple measures the
first thing was to preserve that
customer experience so we took measures
to scale back our
back order capability to respond to
these uncertainties and all of the
variability that we are seeing
we wanted to make sure that we
prioritize the seamless and frictionless
customer experience that i talked about
earlier we wanted to prioritize that
over and above capturing any additional
demand
so we also accelerated um the
development of some new capabilities so
we now have a feature um on our site
which is called notify me when available
so if the product is not available you
can sign up for notifications
when it will become on hand and you can
purchase that it effectively allows you
to get on a virtual waiting list for all
of the products so in order to create
this customer experience you need uh all
of the underlying data integration
whether it is the purchase order
information the advanced shipping
notification the dates the traceability
and visibility through all of the supply
chain so that we can look at those dates
and create these types of customer
experiences so all of that was really
critical in building and bringing this
capability to life for our customers
thank you amit and as you say it was
definitely not about just being
fortunate but also about being prepared
and i found very interesting that even
though you were very much prepared to
deal with the changing landscape
impacted by the disruption you are also
very resilient enough to develop new
offerings and we always communicated
with your members and
you never lost the focus on the customer
experience while you were describing
this so that's amazing and i i
appreciate you sharing that with our
audience
so we want to keep the event interactive
and we want to hear from the audience so
i would love to launch the second poll
and this one is about uh returns a topic
we're very interested on and i'm sure
you're
like you in the audience are also
interested about that because i've seen
some questions already in the q a
feature about return so thank you for
those
we want to know from your side what are
the main reasons that
customers returns product at your
company or if not at your company what
are the main reasons that you return
products for it could be wrong products
damaged products or
those probably didn't meet your
expectation or you intentionally did it
to just try them on and see what comes
next
okay so thank you i see this is
populating already
so while you all respond i would love to
go back to a meet and we will touch upon
this topic
you know that this is one of the areas
where we researching its returns and
reverse logistics and
most retail supply chains are designed
and optimized for the forward flow of
products from manufacturer to an end
consumer
and at the same time accepting returns
is we know not a new phenomenon but we
know that there are also a new new
dynamics of higher rate of returns and
mainly driven by e-commerce growth and
we also know about the complexities of
getting something back from a customer
that
has never visited the store before
so we would love to know from amid what
has been your experience with
circularity in retail with a reverse
flow of products and of course how does
technology fit into it and
as you always do bring us the
perspective of the customer value
yeah
definitely uh there are three aspects uh
of returns one is the customer
experience first and foremost as you
described
uh then the second is the reverse
logistics and then reverse flow of the
product throughout our network and the
last one is around the circular commerce
so we previously had talked about how
omnichannel fulfillment as you said from
a forward perspective shapes
the customer experience and what are the
various challenges and complexities
within that
but the omni channel returns experience
is equally important
the ease of return transaction
regardless of where you had made the
purchase whether you had buy bought the
product online where you bring it back
to the store vice versa all of that is a
very big driver of the customer
satisfaction
and from a technology perspective it
creates different challenges so when we
talk about omni channel fulfillment you
need to have the unified view of
inventory so that the customers can
transact now you flip it on reverse and
then you are looking at all of the
purchases and
orders and the interactions that the
customer had made so if you don't have
the ability to have a single view into
all of the customer interactions it
becomes
really challenging if you have all of
your point of sale and all of the
transaction depository over there you
have all of the order history ah from
your digital properties so if you are
not able to combine those that
definitely creates a lot of friction in
that experience
and then the process needs to allow for
flexibility you should be able to start
return in any channel i should be able
to start the return
on the digital channel create the
necessary documentation information that
may be required and then have the
ability to send the product back and
ship it to let's say your processing
center distribution center whatever the
case may be or bring it back to the
store or drop off at a different
location
so developing that unified view of
orders and allowing the customers to
transact against that
definitely
creates a lot of challenge
and just to put it in perspective
majority of returns for our online
orders
were still brought back to our stores
pre-pandemic so when we were hit by
pandemic again we had to respond to that
that was another area where we had to
really uh stand up some capability
really quickly was around the self
service returns because the returns
capability on our digital properties was
fairly limited um as the majority of the
returns were going back to the stores
anyway so we had to pivot and create
that self-service return capability
which we are continuing to
mature and eliminate the friction from
that return journey as well
so once the customer has interacted and
created that return the reverse
logistics and the flow of the product uh
also leads to a number of different
decision points so i create the return i
drop off the product when should the
refund be issued to the customer is it
when um the product is dropped off for
your with your carriers or when you
receive and
process the return i think that's
probably the biggest factor from a
customer experience perspective that
they're looking for
but then when you put your supply chain
practitioner hat on you need to figure
out where you want this product how do
you want this product to be
dispositioned lot of that product is
available for
resale because some of it is unopened
new some of it might be open box and all
of that so
do you want to bring all of that product
into a central location to process and
disposition and then fulfill it from
there that's one model that we
see in the industry but the other
interesting aspect is
do you want to keep that product in
within that particular local market
because there was definitely a need and
demand for that product within that
region so if you keep it locally within
the market you might be able to
get it to the other customers faster and
also optimize your inventory management
so i think that's the
other aspect so how you create the
optimization on the fulfillment there is
a similar way to create the optimization
on the reverse logistics side also
and then you talked about the overall
circular commerce um that is a very
important uh topic for us because as i
said uh for rei sustainability is one of
our key impact agenda
uh so the
circular commerce the sale of the used
gear definitely creates a great
opportunity for us uh from a
sustainability perspective
based on um the data that we have around
preparing the used gear for resale
versus creating a similar comparable
new product we see about 50
reduction in the carbon emissions when
you talk about the used gear sales so
that circular commerce from a
sustainability perspective is a key
strategic imperative for us and returns
are a big source of supply for all of
that circular commerce lot of our
use gear supply is coming back from the
returns
um
but technology wise it is really
challenging we are to support this
end-to-end process
by having the right technology support
in place
because there are a lot of different
complexities and considerations that
come in so
predominantly starting with the product
information how do you manage the
different quality
and the disposition of the product is it
unopened is it open box is it lightly
used heavily used how is that going to
be presented to the customer so that
they can make the right choice
and obviously based on the disposition
and the quality of the product the
pricing has to be said accordingly
and then eventually it's the fulfillment
and then that is driven by some of the
factors that i talked about earlier in
terms of where you are bringing your
returns back is it central is it through
your distribution center is it through
your dedicated uh stores that are for
your used gears or in some cases it
could be well a 3pl logistics provider
or a third party service provider so
that fulfillment also creates a lot of
complexity
and we are still in the infancy in terms
of our business model for the circular
commerce so obviously we have a lot more
opportunity in front of us for maturing
the business processes and the models
but also from a technology perspective
uh it's really hard to create that uh
support for the end-to-end process so
there is a lot of opportunity in this
space to innovate for students anybody
else who is interested
circular commerce and sustainability are
probably the two biggest areas of
opportunity for us
that's fascinating there's so many
passing ideas there to unpack
for me the sustainability piece is very
interesting in the
the result that you guys found or the
research you guys did with finding 50
less for selling a used product versus a
new product is very fascinating so much
so that upstream
supply chain is so challenging to
decarbonize or to reduce emissions from
and so this is one way to kind of
address that up front right at that
customer experience that's fascinating
i'm going to have to to dive into that
for sure maybe we'll have some quick
good questions on that at the end
um but before we proceed we want to um
take a look at our poll results we could
share that poll result number two this
is a poll on what are the reasons um
your company or maybe you yourself on
return products and it looks like um the
majority
majority kind of picked two you know
it's a damage and defective product or
product did not meet expectations i
think that makes sense i'm a little
actually surprised to see the delivery
expectations didn't meet that you know
we're all kind of accustomed to this
you know new same day or you know
high-speed delivery i'm in the
e-commerce world and
that that not being every reason to
return is kind of interesting to see so
um hopefully there's some good comments
there in the chat i think i saw a few
pop up as well
i'm awesome
um so i'm just doing a quick quick time
check i think we're going to jump into
our final question before we get into
some q a for
the audience there i see a number of
questions in the q and a's that's
awesome but before we do so i want to
jump into our final question with the
mit um and we mentioned previously that
emit is a credential holder or a
micromaster's alumni which is super
awesome to have him here
so we'd love to know what inspired you
to take the program and how you've been
able to use it um what you've learned in
your career after completing it
yeah i'm really proud of being a member
of the first ever cohort of the
micromasters program
i think the structure of the program
which covers the end-to-end supply chain
um the quality of the content and the
research at mit cpl i think those were
the key factors that attracted me to the
program
and this has helped me in a number of
ways but i would share three
quick highlights
first was it broadened my supply chain
knowledge
so as i mentioned earlier that i have
been working in the technology field
within supply chain for a really long
time but my scope was fairly limited i
was being focused mainly on the omni
channel as well as the distributed order
management space and this program helped
me see the big picture of supply chain
all the way from
network design uh to analytics
technology all of that
second and i think probably the most
important one was it helped me connect
with my business partners and the supply
chain practitioners using a common
vocabulary so it's not like as a
technologist i'm talking about like
requirements capabilities just from
systems perspective but having the deep
understanding of the theory of supply
chain and its practical applications
helped me partner with my stakeholders
so that we could co-create and innovate
versus trying to understand each other's
terminology and language
and
the omni-channel optimization solutions
that we talked about earlier those are
directly based on some of the concepts
that you learn in the supply chain
design and the technology courses in the
program
and lastly it helped me build my network
and create connection with respected
experts in the field uh whether it was
as a role of my student i participated
as a cta for some of the roles uh for
some of the courses as well as through
events like this
and even pre-pandemic in seattle area we
had meetups of all of
or several of the micro master students
taking various courses to build those
local connections and learn from each
other
so i think that's where it has been
really helpful for me to apply the
learnings um that i had so i definitely
encourage the students to
build such connections build your
networks and also take the next step and
complete the master's program which i
wish i could do
awesome i mean thank you for your
encouraging rewards and for sharing your
experience and your greatest takeaways
for courses we are very excited and very
proud to have you here with us showing
us what you have learned
along your professional and educational
journey so that's amazing um we will run
now a last poll before we go to the q a
from the audience so you all have seen
that we asked you first what were you
looking for at this event but now we
want to know what did you find most
interesting out of our event
so what's that probably expanding the
knowledge of supply chain technology
learning about rei and the retail
industry and maybe new ideas to improve
your own companies or your own daily
jobs
um so we while we give you a minute to
complete that pull maybe kellen we can
go to the first questions
yeah there's tons of awesome questions
in here thank you everyone for
participating uh maybe just picking um
our first one here from louis chong i
apologize if i pronounce your name wrong
but as the pandemic comes to an end um
admit your question is for you will rei
continue to offer services that started
during the pandemic so maybe like that
curbside pickup for example
um and what are the considerations
you're taking into account when making
those decisions as the kind of the
pandemic hopefully at least you seem to
be on the tail end of that
experience so
yeah i think that's a good question and
i think we've seen this pattern even
earlier when a lot of these omni channel
capabilities were evolving that as you
offered new customer experience i think
that
just becomes the
customer habit and that becomes the new
trend right like the customers are so
used to uh all of these different
offerings now
uh so some of those offerings will
definitely continue again depending on
the customer needs so obviously you know
curbside pickup is a very convenient
option so we do see uh that customers uh
opt for that particular option also but
as the restrictions are
easing out there is definitely ah the
desire for the customers to come into
the stores and then ah interact not just
with the product that they had purchased
but with
all of the other selection that we have
and i think one of the key strengths for
aria is also the knowledge that we have
inside our stores with our green vests
the employees as we call them because
they are really the experts in their
fields so definitely the differentiator
and a key ah engagement lever for our
customers is also to interact with those
experts so i think we will definitely
see a mix uh i'm sure there will be
occasions or use cases where the
convenience of the website pickup is
helpful so our customers will continue
to opt for that but when the customers
or the stores are open they would be
able to come in the store as well