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APMEN is pleased to conduct an interview with Lim Fang How, Regional Director, Southeast Asia, Zebra Technologies Asia Pacific how manufacturers, transportation and logistics (T&L) firms, and retailers are preparing to meet the growing needs of the on-demand economy.
Q: WHAT DOES ZEBRA THINK IS THE IMPACT OF KEY TRENDS, ON RETAIL, MANUFACTURING AND LOGISTICS COMPANIES TODAY?
Lim Fang How (LFH): Ever-increasing technology adoption by customers has resulted in the current on-demand economy, in which customers expect instantaneous service delivery as the baseline standard. Early attempts to address these needs sparked innovation which began at the core of the enterprise. Innovation is now exploding at “the edge” where employees make real-time decisions and interact directly with the people they serve.
The increasing use of visibility technologies, the Internet of Things (IoT) and analytics across various industries—manufacturing, logistics, and retail—has resulted in a hyper-competitive landscape where businesses may struggle to stay relevant—even those that were once dominant.
The rise of e-commerce and omnichannel retail has led organizations to tap on heightened automation, merchandise visibility and business intelligence in the supply chain to compete in this on-demand consumer economy. Companies today need to digitally transform their supply chain to addresses key pain points such as: inventory visibility, resource allocation, reducing backorders and replenishment efficiency.
Zebra’s latest Fulfillment Vision Study surveyed manufacturers, transportation and logistics (T&L) firms to find out more. According to the study, 73% of consumers are omnichannel shoppers today (and they spend more than single-channel consumers), while only 42% of supply chain respondents believe they’re operating at an omnichannel level.
While many respondents acknowledged that accurate inventory visibility was key to delivering a seamless omnichannel experience, they also felt that inventory visibility is not where it needs to be, reporting that their inventory accuracy is only 61%. There is still a gap between where the respondents feel comfortable in offering a seamless omnichannel experience – and this is where visibility solutions will give enterprises the performance edge to thrive in a highly competitive environment. As companies deploy an omnichannel approach, quick and drastic adjustments will be needed, and they need to ensure that they have in place the solutions needed to give them the competitive advantage over their competition.
Zebra has long been a pioneer at the edge of the enterprise, and our portfolio of intelligent edge solutions and devices is designed to deliver a performance edge wherever the frontline may be.
Q: 92% OF THE RESPONDENTS CITED CAPITAL INVESTMENT AND OPERATING COSTS OF IMPLEMENTING AN OMNICHANNEL OPERATION AS A KEY CHALLENGE. WHAT CAN BE DONE TO SOLVE THIS?
LFH: One of the best ways to address these issues is by reassessing an organization’s IT strategies and educating employees. Zebra’s Intelligent Enterprise Study 2017 revealed that while organizations have strong IoT visions, there is still room for improvement when it comes to ensuring robust change management initiatives associated with IoT deployments. Some 50% of respondents expect internal resistance when adopting those IoT solutions, and are either still developing a plan or don’t have a plan to address that resistance. According to the survey, some popular solutions organizations have put in place include educating employees on the impact the solution will have on roles and workflows (60%), educating employees on the value proposition of the solution and putting formal training plans in place (53%).
A separate study from Zebra, the Manufacturing Vision Study, also found that cost, privacy and security and integration challenges were found to be some of the top barriers to adopting an IoT solution. To address these hurdles, enterprises need to design an IoT solution that matches its specific challenges, given that the amount of technology needed to track its goods, assets, people and processes vary widely depending on each operation. This study also affirmed that more education and information sharing can be done to ease IoT adoption.
Q: WHAT ARE THE TECHNOLOGICAL INVESTMENTS THAT RETAIL, MANUFACTURING AND LOGISTICS COMPANIES TODAY SHOULD CONSIDER, TO ENABLE OMNICHANNEL LOGISTICS?
LFH: One of the biggest growth in adoption that will enhance omnichannel logistics will be radio-frequency identification (RFID) technology and inventory management platforms, say respondents from the study—as they see adoption jump from 32% today to 95% in 2028. RFID-enabled software, hardware and tagging solutions, offer up-to-the-minute, item-level inventory lookup. The visibility gained provides the supply chain with a performance edge that heightens inventory accuracy and shopper satisfaction while reducing out of stocks, overstocks and replenishment errors.
On a similar note, 55% of organizations today are still using inefficient, manual pen-and-paper based processes to enable omnichannel logistics. By 2021, handheld mobile computers with barcode scanners will be used by 99% of respondents for omnichannel logistics. The upgrade from manual pen-and-paper spreadsheets to handheld computers with barcode scanners or tablets will improve omnichannel logistics by providing real-time access to warehouse management systems.
In addition, future-oriented decision makers revealed in Zebra’s Fulfillment Vision Study that next generation supply chains will reflect connected, business-intelligence and automated solutions that will add newfound speed, precision and cost effectiveness to transportation and labor. Surveyed executives expect the most disruptive technologies to be drones, driverless/autonomous vehicles, wearable and mobile technology, and robotics.
Q: WHAT ARE KEY CHALLENGES FACED AROUND PRODUCT RETURNS AND HOW CAN COMPANIES RESOLVE THIS?
LFH: As highlighted by the Future of Fulfillment Vision Study, reverse logistics, referring primarily to product returns, has become a significantly bigger concern in an omnichannel marketplace. It is also extraordinarily costly and is eating into already pressured profit margins, with shoppers returning an estimated US$642.6 billion in goods globally each year.
Retailers must look into managing returns efficiently and cost effectively, as 80% of shoppers get turned off when experiencing hassle-heavy return process, according to a ComScore Study. However, many retailers are hesitant to enact changes, and seem uncertain as to how to best improve their processes. In fact, 74% of surveyed retailers agree that returns for online orders are a challenge, with 28% viewing it as a significant challenge. To overcome the cost issue, merchants are increasingly exploring new models to offset the costs of returns. The study uncovered that 58% of retail respondents add a surcharge for returns today and 71% have no plans to change this in the future. Of the 42% of merchants that do not currently add a surcharge for returns, 80% plan to do so in the future.
Decision makers are also testing solutions such as leveraging the store as a product returns hub. A resounding 71% of surveyed executives agree that more retailers will turn stores into fulfillment centers that accommodate product returns. Furthermore, the majority of retailers that currently do not offer free shipping, free returns or same-day delivery plan to do so and expect to engage third-party firms to manage the returns process in the future.
Any supply chain dealing with return logistics should also ensure that they have real-time visibility on their inventory. First, ensure that your systems are up to current inventory levels with accurate inventory visibility. Second, plan for an explosion of returns and make sure your processes are in place to deal with this, lest your warehouse fills up too quickly.
Q: HOW ARE APAC COMPANIES LEVERAGING TECHNOLOGY TO SERVE CUSTOMERS BETTER?
LFH: APAC enterprises are adopting visibility solutions—like those from Zebra—that empower their frontline workers to gain a performance edge. Zebra serves 95% of Fortune 500 organizations globally to provide these visibility solutions. While we have many successful deployments, some interesting APAC examples include those below:
In Australia, MyChemist/Chemist Warehouse Group—the largest retail pharmacy on the continent, successfully deployed Zebra’s TC70 mobile touch computers for its stock management system for its retail chains. The company adopted over 1,600 Zebra TC70s across its network of retail outlets. As a result, MyChemist radically improved staff efficiency, allowing them to complete tasks at a faster rate.
In India, CEAT—one of India’s leading tire manufacturers—has reported significant increases in productivity and reduction of supply chain errors after deploying visibility solutions provided by Zebra. CEAT uses Zebra’s solutions to simplify its processes and build automated workflows that deliver greater efficiencies and business value at its Halol plant. By using Zebra’s solutions, CEAT improved dispatch accuracy, leading to a 20-times reduction in fault finding and customer complaints. This helped increase cost efficiency, customer satisfaction, and overall value for the manufacturing process.
In Indonesia, the leading lifestyle retail conglomerate PT MAP has deployed a suite of Zebra’s intelligent enterprise solutions—including the MC55 mobile computers, the RFD5500 RFID sleds, and the MC3200 mobile computers in its stores. Subsequently, MAP reported a jump in staff productivity, better inventory control, and increased supply chain accuracy.