Walmart’s US supply chain grew from a garage and pickup truck to more than 150 warehouses and 8,000 drivers. Chris Sultemeier, former executive vice president of logistics says the most dramatic industry change is still to come, he said in an interview with MIT.
Technology will transform transportation
Despite retailers spending enormous amounts of money on transportation, Sultemeier said, there’s a gap in investment and technology. The technologies having the most impact on transportation are artificial intelligence and automation, the internet of things, Uber for freight transportation, blockchain, drones, and driverless trucks.
Fulfilment centers will become a new kind of store
A retail supply chain used to be one-directional but now they’re more like spaghetti going all directions. That’s due in large part to companies like Walmart changing the way it handles order fulfilment. Walmart converted 10 of their Sam’s Club stores into end-market fulfilment centers. Walmart introduced its Pickup Today. This is an option where customers could order something online and pick up their order in-store. Sultemeier said it’s likely retailers will be experimenting with behind-the-scenes automation for stocking and bagging efficiency to further smooth the process.
Customers will help with the ‘last mile’ delivery
The final frontier for groceries is the last mile. For a company to get this last mile right, it requires three things: density, delivery, and flexibility. You’ve got to have enough people to serve, and you can’t have a fulfilment location on the very edge of town especially when delivering food. Know that you can incentivise your customer to help you be successful in that delivery flexibility.
Source: MIT-Sloan