Friday 18th Aug 2017 - Logistics & Supply Chain

Amazon puts focus on robotics

Vishal Bansal, UK supply chain director of Amazon, focused on the role of robotics in in the retail giant’s logistics operations when he spoke at the Logistics & Supply Chain Conference.

He started by focusing on customer service: “Topic close to my heart – meeting customer demands as well as to improve operations.”

Vishal Bansal, UK supply chain director of Amazon.

Vishal Bansal, UK supply chain director of Amazon.

He said that Amazon aims to be the earth’s most customer centric company, the retail giant wants customers not just to find products they like, but to discover things they didn’t know they wanted.

Just the sheer range of products is something Bansal thinks has been a big part of the success and growth at Amazon. The company is now growing 20 per cent plus every year – in 2015-2016 growth was equal to how big the company was in 2010.

“It’s not just about physical products, it’s also about processes. Lots of people talk about customer centric processes,” said Bansal. “I don’t think there are many who are absolutely obsessed with the customer and will do what it takes to delight the customer.”

According to Bansal, Amazon has a self-fulfilling cycle – it begins with the wide selection of products. Where customers have more choice they have a better experience, which attracts more customers, and then more suppliers. “Within operations it helps reduce cost structure as we get more volume – we use that to give lower prices.

“The reason why we do innovation and do it well is because we are builders, everyone tends to be passionate about building something,” said Bansal. According to him, Amazon is always taking big risks, and always looking for the next innovation. Hence its big investment in robotics.

The three biggest benefits of robotics for Amazon, said Bansal, are that it helps employees because working with the latest technology makes work easier, it helps the business get its products to customers much faster, as well as getting products to customers much faster and making sure the business meets customer demand.

It enables us to keep a lot more stock and turn it around quicker than a traditional building, and supports and develops networks.

“Shelves are moved by robots for density and durability,” added Bansal. The associate can stay in one place.

Beyond the physical robots Amazon invests lots of time on supply chain optimisation technologies, and analyses millions of orders from 185 countries. The business is always developing intelligence systems to choose best suppliers, and optimise warehouses to more efficiently restore products – using every computer science tool.

 

Implementing S&OP at GlaxoSmithKline

Neil James, former vice president integrated business planning at GlaxoSmithKline, examined the challenges involved in designing a Sales and Operations Planning process, when he spoke on the second day of the Conference.

“The most important thing to remember is that, when I kicked off this programme, there was no S&OP process in GSK – you might find that surprising,” said James. “Commercial operations were not even providing forecast of demand – it was left to supply chain colleagues. So we were starting from very low base.”

The company had tried multiple times to implement a process, but it had never managed to really get any plans off the ground. And if processes did manage to jump the first hurdle, they couldn’t be sustained.

In his 20 years at GlaxoSmithKline, James has always worked on the commercial side of the business. It was a deliberate choice to choose someone in a commercially driven role to take over the S&OP process. Previously, the business had seen the process as a supply chain responsibility, rather than a core commercial process.

“Actually it’s really about cross-functional engagement,” said James. “None of them could really go much further than that. All the consultants that peddle their wares, they were from the supply chain side – but the thing that was missing was collaboration.”

James designed a change programme, which still included process expertise, or the tangible and rational elements you need for the process, as an important element. James said that the right design for the process and toolkit are still critical. “They’re the ticket to having S&OP in the first place. Without that you’ve got no chance.”

James hired one full time change management professional and one communication professional.

When looking at the sustainability of the process, James felt that it was a big ask, and felt like a marathon.

“But that wasn’t the right mind-set. The whole point of it isn’t to get it over the line, it needs to run every month, forever, and needs to get better,” said James. “Once we built a network of champions, in every geography, in every unit, we had a champion [of the S&OP plan) in that space.”

The champions are trained so that each GSK unit is a “centre of excellence” when it comes to S&OP.

“In the run up to hand over the deployment to line organisation, we made sure we invested enough time for them that day – contracting with them six months before they take it on themselves.

Another element was senior leadership sponsorship. “Normally in a big company you take one chief person. I took two (and I would have rather had three), the chief financial officer and chief supply chain officer. Why? The whole point is that historically its seen as supply chain responsibility – sponsors reinforce and symbolically show that it’s a core process.”

 

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