Modern WMS: The Nerve Center for A Differentiated Customer Experience

An Interview with Scott Zickert, GVP of Product Management at Blue Yonder

Scott Zickert, GVP of Product Management at Blue YonderARC Advisory Group, in partnership with DC Velocity magazine, recently completed survey-based research on the changing practices, priorities, and expectations of warehouse executives. I reached out to Scott Zickert, GVP of Product Management at Blue Yonder to obtain his perspective on some of our research findings.

Clint:   ARC Advisory Group’s research on the future of warehousing points to the widespread need for greater agility and automation in warehouse operations across industries. What is Blue Yonder’s take on the key drivers of this trend, as well as the technology enablers that will allow organizations to achieve greater responsiveness and efficiency at scale?

Scott Zickert: Buyer preferences across all industries are changing, with consumers demanding more flexible, frictionless and convenient ways to not only purchase, but take delivery of their products. These changes have been in motion for a while but accelerated this year with the pandemic driving more people to use digital channels and “contactless” means of delivery such as curbside pickup for groceries. Health and safety have become important new requirements – and benefits – within the customer experience. This trend will endure and favors more digital business models and workflows.

New ways of buying and fulfillment are adding complexity to the end-to-end supply chain. Warehouses are becoming critical nerve centers to deliver a differentiated customer experience across product availability, buying avenues, and speed of delivery without adding cost. Increasing automation will be part of the answer, but more critical will be intelligent and adaptive capabilities where automation is combined with artificial intelligence  (AI) and machine learning (ML) to continuously monitor and model the workflows and enable efficient orchestration of resources, both human and robots. At Blue Yonder, we refer to this as “Resource Orchestration.”

Clint: Our study shows high growth expectations in direct-to-consumer and drop-ship fulfillment. How does Blue Yonder see this trend evolving, and what will it take for retailers and 3PLs to scale these capabilities?

Scott: No question these are fulfillment growth areas. Consumers want flexibility in the buying and fulfillment processes. They also want a frictionless experience, which in the pandemic environment, means contactless for more of their transactions. Direct-to-consumer and drop ship support this demand so we agree there will be significant growth in these fulfillment channels over the coming years.

A big implication of this trend will be the need to forecast and segment demand and supply not only by sales channels, but fulfillment channels. The trend will be toward a higher volume of orders, but smaller average quantities per order, consistent with growth in direct-to-consumer transactions. By nature, workflows will need to be more flexible, with the ability to change quickly with shifting market conditions or supply chain disruptions.

This evolution is creating greater urgency for warehouse leaders to move away from legacy siloed systems and deploy a state-of-the-art WMS as part of a unified logistics solution footprint. Specifically, this means solutions that leverage machine learning to ingest external data for factors such as weather and transportation network status, then dynamically model and execute seamless workflows optimizing inventory, space, labor, automation and transportation to account for these conditions. This will be critical to drive efficiency and responsiveness against the more complex demand and supply forecasts across the network of larger national, regional DCs, fulfillment centers and local fulfillment centers.

Clint: It’s clear that warehouse operations are becoming more sophisticated and complex as organizations drive to increase their overall efficiency while also addressing growing customer demand for fast delivery. What do you see as the key areas warehouse leaders should focus on to be more agile and meet demanding SLAs, while carefully managing costs?

Scott: Warehouse leaders will need to think about how they transform their operations to become strategic assets that deliver best-in-class customer experience as a key differentiator. It is critical to predictively position operations for success in terms of inventory, labor and automation by leveraging AI and ML given ever-increasing customer expectations and order forecast volatility. In addition, convergence of warehouse operations and transport mechanisms to provide a seamless flow from order to delivery will drive efficiency in this market. Warehouse operations now more than ever need to understand the necessity of standardizing workflows to minimize the cost of implementations and integrations.

Clint: Our study shows that 75% of warehouse leaders are planning to upgrade their WMS applications within the next three years. What are the key capabilities warehouse leaders need to capture even more value from these systems as they upgrade?

Scott: The big considerations driving upgrades is the need to modernize the WMS to capitalize on the now proven benefits of cloud architecture and services. The latest WMS cloud solutions are more scalable, as well as easier and less costly to manage. Upgrades are dynamic and painless. Finally, these cloud solutions are SaaS-based, so they enable the “OPEX” consumption model preferred by businesses, particularly their finance leaders, today. Leveraging AI and ML to better position operations to adapt and respond to a highly dynamic and demanding commerce environment will be critical to success. With all these factors in play, it’s no surprise you’re seeing big numbers planning upgrades from their on-premises WMS applications.

Clint: Finally, labor management is among the biggest challenges for warehouses today, with shortages, skill gaps, and in some cases, rising costs all making this a pain point. In fact, almost seven in ten leaders expect to upgrade their labor management systems in the next three years. What capabilities should they be looking at to help them manage and retain highly productive workforces?

Scott: Leaders should be seeking solutions that help them not only optimize labor cost and productivity, but also give employees more flexibility and a better experience. As with workflows, machine learning can be extremely valuable when applied to warehouse labor management (WLM), helping to optimize both scheduling and deployment of resources from both the employee and management perspective. Also, warehouse managers should look for solutions that give their people more flexibility and control over their work schedules via mobile devices. The latest WLM solutions can enable workers to dynamically swap shifts and set their schedules within defined parameters. More control translates to a better experience and, in turn, higher worker retention.

Clint: Thank you Scott for your insights on how to navigate the dynamic and rapidly evolving fulfillment environment.