Retail Executive

NOV/DEC 2017

Retail Executive is the trusted advisor to top retail executives from the industry’s most profitable retailers. We help retail executives succeed in their job role and grow their business via exclusive, actionable, peer-driven content.

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automated solutions to address age-old supply chain problems in innovative ways. Unstructured data sources such as weather data, news analysis, and social media can readily be used with machine learning algorithms to improve forecasting accu- racy. Sensor data from manufacturing lines can be easily manipulated and used for doing predictive maintenance and product quality improvement in the manufacturing environment. Because the core computing infrastructure is abstracted and han- dled by the cloud service provider, building solu- tions at enterprisewide scale doesn't cost as much money or time. ▶ Adopt the "product mindset" for developing new technology It's equally important to move away from the traditional IT service mindset — where busi- ness defines the requirements and then hands them over to IT for implementation — to the product mindset. Product mindset is character- ized by a truly symbiotic relationship between the business and technology teams where both the teams maniacally focus on fulfilling the customer needs and are held accountable to the same business metrics. A product manager plays a critical role in making the product mind- set a reality. A product manager is a mini-CEO who takes complete end-to-end ownership for the results of the product. Culture and mindset of agility Agility must be appreciated and demanded from the very top leadership of the organization and should be reflected in the way they think about new business opportunities, the way they organize their teams, the way they make de- cisions, and the way they learn from failures. The most important cornerstone of an agile culture is tolerance for failure. Agile companies ideate constantly, get to the market fast to test their hypotheses with real customers, learn from mistakes quickly, and use that feedback to iterate to the next version of the solution. Segmentation, synchronization, and technology agili- ty feed the culture of agility, and the culture enables the other three pillars. SUPPLY CHAIN AGILITY IS AN ACHIEVABLE NECESSITY Consumer companies can't rely on a few billion-dollar brands sold through a few big channels. Those days are over. To stay relevant and grow in today's dynamic mar- ket supply chain, agility is a necessity. It rests upon four pillars — segmentation, synchronization, technology, and culture. It will take hard work and discipline to do well on all four, but it is necessary and it is certainly doable. R ▶ A synchronized supply chain affords better demand signals at the point of purchase and consumption, which in turn helps with better forecasting and planning. ▶ It provides increased visibility into supplier ca- pacity, constraints, and inventory levels through- out the network to drive optimized order and inventory management. and just-in-time execution: ▶ A synchronized supply chain helps all the connected parties to source, manufacture, and stock the right amount to meet the demand, thus driving down the overall inventory levels. ▶ It allows the entire supply network to bring the decision point closer to the demand signal and thus reduce the risk of obsolescence. Segmentation and synchronization are the two en- gines of agility that feed off each other. The better the segmentation, the more effective the synchronization and vice versa. HOW TO MAKE SEGMENTATION AND SYNCHRONIZATION POSSIBLE Technology agility Agility is already a reality for technology leaders like Amazon, which has had a strategic focus on making its technology platform extremely modular, by adopt- ing the service oriented architecture (SOA), to flex it in any shape and form necessary to go after new business opportunities. Amazon is not alone in understanding the value of technology agility. The consumer market is ripe with startups such as Dollar Shave Club that are trying to upend industry heavyweights by redefining consumer experience with innovative products, business models, and operations. These startups are digital natives and are using emerging technologies to build agility as they grow. Where does this leave the traditional nontechnolo- gy companies? Can they build technology agility with their existing infrastructure? The answer is yes, if they focus on the following two things. ▶ Leverage emerging technologies Mainstream cloud platforms such as Google Cloud, Amazon Web Services (AWS), and Microsoft Azure have successfully brought four key technologies together — cloud computing, Big Data, Internet of Things (IoT), and artificial intelligence (AI). These platforms make it easy for users to create inte- grated, enterprisewide data ecosystems pulling data from internal and external data sources and leverage advanced algorithms to build scalable RETAILEXECUTIVE.COM NOVEMBER/DECEMBER 2017 29

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