Viewpoint: Sears’ supply chain transformation well underway

Omni-channel fulfillment is a challenge that’s facing practically everyone involved in logistics and transportation management. For retailers, suppliers, and manufacturers alike, the pressure is now on to deliver anything, anytime, from anywhere—and the need to establish cross-functional teams and improve service is increasing at a lightening pace.

We’re now functioning in a world where mobile technology, wireless networks, and e-commerce capabilities have collided, forcing logistics organizations to transform their transportation planning, re-think distribution processes, and apply software, systems, and technology to meet new—often overwhelming—customer expectations.

While meeting the omni-channel challenge is a tall order, the work it takes to get there is helping to elevate the importance that logistics management plays across the many key functions in an organization. Not only is supply chain performance now a key differentiating factor for success, but many companies—especially in the pure-play e-tail space—have built their entire business plans around the fluid, visible movement of inventory and the seamless delivery of goods an omni-channel fulfillment operation can achieve.

Dell was a pioneer in this thinking. The computer maker based its mission on fluid supply chain operations and dynamic e-commerce order fulfillment on the way to perfecting the direct-sale, “build-to-order” approach to manufacturing.

I wasn’t surprised when I heard that Dell’s global logistics leader, Bill Hutchinson, joined Sears Holdings last April to become the retailer’s chief supply chain officer. One of the most iconic retail brands in U.S. history needed to catch up with the new consumer-driven demand for instant gratification—and who better to get them there than a man who cut his teeth with one of the innovators.

Sears has been taking it on the chin, having lost considerable market share of home appliance sales—a key part of its business model—to Lowe’s and Home Depot. The company needed a 21st century supply chain leader to expand the customer’s shopping experience beyond the company’s massive brick-and-mortar footprint.

Under Hutchinson, the venerable brand has launched a supply chain transformation—call it an invigoration—that leverages its massive store network and puts to work the most innovative best practices direct from the evolving omni-channel fulfillment playbook.

Executive Editor Patrick Burnson documents the formidable challenge facing Sears and walks through the progress that Hutchinson and Jeff Starecheski, Sears’ vice president of logistics services, are making so far.

“This is a dynamic duo,” says Burnson. “They realized that they have a natural advantage with the proximity of their store base if those locations are utilized as another node in the supply chain.”

And with this infrastructure already in place, and with the application of the right systems and training at the store level, the team has quickly established a flexible nationwide network capable of 1-day ground service to 81 percent of the U.S. population. “This is the story of a terrific team effort,” adds Burnson, “and only time will tell if this transformation effort will bring Sears back to prominence. My bet is that it will.”