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Author's profile photo Ryan Kh

SAP Notices Drop in Fulfillment Times By Leveraging Cloud, Blockchain

Have you ever considered how a store just seems to magically have what you’re looking for on the shelf? You purchase all your favorite candy bars, and tomorrow they’re back as if nothing happened.

In the middle of the dotcom bubble I was working retail. It was one of the hardest jobs I’ve every had in my life. From being a prisoner to whatever whack job walked through the front door, to having to constantly restock hot items, it wasn’t how I wanted to spend the rest of my life.

So, I knocked out a few certifications and started gaining experience in IT. Before I knew it, I was helping companies migrate their data and upgrade their data infrastructure to support cloud computing.

It was during a large build out that I realized my two worlds had collided. My retail past, restocking shelves, had collided with my IT present, building and maintaining the hardware that tracks inventory and forecasts retail inventory needs.

The Complex Struggle Between Online and Brick and Mortar

During my days in retail hell, there was the persistent murmur that ecommerce giants like Amazon would put traditional retailers out of business. But it’s hard to beat the demand for instant gratification – probably one of the reasons Amazon is investing so heavily in predictive shipping or delivering items that it believes its customers in a specific area will want to a local storage unit for faster delivery.

But I think it may be the other way around. Instead of ecommerce slaughtering traditional retailers, we’re going to continue seeing ecommerce support local retail through innovative collaboration. Amazon acquired Whole Foods for the physical footprint. They give Amazon the ability to deliver fresh food to a customer’s doorstep within hours. And portions of some Whole Foods locations are being sectioned off to serve as local storage spaces for predictive shipments.

Another key partnership between retail and ecommerce is Kohls’ decision to allow Amazon customers to return items purchased from Amazon at their retail locations. This drives foot traffic to the store, and a large percentage of Amazon returns are clothing. So, if Kohls is willing to box up and ship off a clothing return for a customer, there’s a chance they’ll purchase a replacement during their visit.

My point in bringing up all of these recent developments in collaboration between ecommerce and brick and mortar is that the battle lines are being blurred. The companies that operate most efficiently in giving consumers what they want will survive – either through collaboration or decimating the competition.

Inventory management is a key differentiator for all businesses.

If a company falls behind and fails to keep popular items on their shelves, or stocked at their warehouse for speedy shipment, they will lose that customer to a competitor that can quickly solve their need.

That’s why much of the data that I organize and upload to the cloud for companies revolves around consumer shopping habits. This information can tell companies a lot more than what they’re likely to sell in the near future. It can paint a picture for how, why and what consumers are looking for when they call, click or walk in.

And to keep track of inventory, companies need verification that items are where the system thinks they are. With an increasing degree of automation, the opportunity exists for an incorrect assumption in one part of the supply chain to cause cascading failures as the problem works its way to the customer.

Real-time visibility of inventory reduces order fulfillment time by nearly one-third.

According to SAP, companies that utilize tools that provide real-time, enterprise wide inventory visibility see a 32% reduction in their order to ship cycle. The most popular tools used to track inventory are cloud-based, and that makes perfect sense considering that most organizations operate from multiple locations. And the data needs to be the same for every team member reviewing the status of items in their supply chain. Companies like Provenance are using big data, analytics and the blockchain to provide transparency to the supply chain of goods for retailers and producers. This transparency gives retailers and consumers visibility into the origin and impact each product has in its journey from creation to consumption.

But what happens when you run a company or organization that handles items that are often counterfeited? This has been a major challenge for Amazon – a great example being the phony solar eclipse glasses that failed to protect customer’s vision when staring at the spectacular solar event.

Merchandise integrity is the other side of the coin.

Phony sunglasses are one thing. The pharmaceutical industry represents an even juicier target. According to the World Customs Organization the counterfeit drug industry is worth over $200BN. If medications are intercepted and swapped out with counterfeits, patient’s lives could be on the line.

It’s this breakdown in the pharmaceutical merchandise supply chain that caused between 100,000 and 1,000,000 deaths worldwide in 2015 alone. Technology like Farmatrust and others are coming to the rescue by applying blockchain and AI to give governments, pharmaceutical companies and regulators a way to securely track these drugs across their global supply chain.

Blockchain, or distributed ledger networks are the future of secure inventory management.

Imagine international financial transfers involving real-time currency exchanges happening in minutes instead of days. For inventory processing, imagine a ledger-based system that cannot be altered. The moment someone takes custody of a shipment, their activity is logged forever. Investigation into supply-chain integrity becomes a matter of scrolling through the ledger. Culprits can be narrowed down in a few minutes.

This is the exciting world of retail and ecommerce in the blockchain. And it represents a massive leap forward for data security. Instead of data sitting on a centralized server, or a single copy of information stored in the cloud, blockchain’s ledger system is duplicated in real-time across a network of devices.

There are devices within the distributed network that are responsible for processing / verifying the algorithms involved in finalizing the transaction and securely adding it to the ledger. You’ve probably heard them referred to as miners within the context of cryptocurrency. All of this leads to a more secure, verifiably system for tracking transactions – both online and offline. And within the context of internal corporate operations, the focus on anonymity will be completely gutted.

In conclusion, we’re entering a world where retail and ecommerce play well together – as long as their supply chain logistics are up to speed. By shoring up the last-mile, the likes of Amazon are getting closer to instant gratification of their customers. And the physical footprint of successful retail organizations is helping them make the magic happen.

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