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Speaking of Supply Chain artwork

Fast and Free Is Over So What Wins Now

Speaking of Supply Chain · 2026-02-05 · 38 min

0:00--:--

Key moments - from our scoring

Substance score

62 / 100

Five dimensions, 20 points each

Insight Density13 / 20
Originality11 / 20
Guest Caliber14 / 20
Specificity & Evidence12 / 20
Conversational Craft12 / 20

The era of D2C as a competitive advantage has ended; fast, free, and seamless delivery is now the minimum expectation. Julian Asorio (Meboak) and Rob Han (Pattern) discuss how retailers must adapt by moving beyond blanket next-day delivery commitments and instead building blended, dynamic fulfillment networks with real-time inventory orchestration. The key differentiator is now balancing inventory, margin, and risk management while maintaining service levels - a challenge legacy retail networks weren't designed to handle. Amazon's strategy offers lessons: placement and proximity to consumers matter, but most mid-sized retailers shouldn't attempt to replicate Amazon's 250+ fulfillment center model. Instead, they should embrace specialization - retailers partnering with focused 3PLs for D2C, marketplace replenishment, or B2B rather than trying to excel at everything. Store-based returns management, dynamic fulfillment logic (deciding in real-time which DC to ship from based on labor, cost, and service), and regional carrier flexibility are where leading networks gain advantage. The conversation emphasizes that automation should solve specific pain points - removing touches, reducing decision points - not chase robotics for its own sake. Software and process optimization often deliver more value than expensive hardware.

Key takeaways

  • →Reliability and transparency now separate leaders from followers; fast and free is the baseline, not the differentiator.
  • →Specialization wins - brands should partner with expert 3PLs focused on specific channels (marketplace replenishment, D2C fulfillment, B2B) rather than demanding generalist providers.
  • →Store-based returns models combined with centralized liquidation create significant inventory and cost advantages over dispersed return processing.
  • →Automation should target process inefficiencies and removing touches, not pursue robotics complexity; software and process design deliver more ROI than hardware at mid-market scale.
  • →Dynamic fulfillment logic using real-time data on labor availability, regional demand, and carrier capacity beats fixed fulfillment strategies.

Guests

Julian AsorioRob Han

Topics in this episode

FBA (Fulfillment by Amazon)Warehouse control systems (WCS)Warehouse management systems (WMS)Goods-to-person systemsMeboakPatternAmazon RoboticsDynamic fulfillment logicAutomated sortationMarketplace replenishment

Questions this episode answers

What has replaced fast and free shipping as the competitive advantage for D2C retailers in 2026?

Reliability and transparency are now the differentiators. Fast and free are table stakes; what matters is balancing inventory, margin, and risk management while maintaining flexible, responsive fulfillment across multiple channels and adapting to demand variability.

Should mid-sized retailers try to build Amazon-scale fulfillment networks with dozens of distribution centers?

No. Unless solving an Amazon-sized problem, retailers should consolidate inventory pools and use fewer buildings. High complexity and variability actually require fewer facilities, not more, to avoid misplacing inventory and triggering costly cross-country reshipping.

What is the best approach to handling returns for retailers running blended fulfillment?

Combine store-based returns (allowing customers to return in-store and restocking from store inventory where possible) with a centralized DC for secondary liquidation processing, which reduces inventory carrying costs and speeds product turnover versus spreading returns across multiple facilities.

When should a retailer invest in robotics versus automation versus process improvement?

Focus on process improvement and software first. Most mid-sized retailers can achieve significant speed, cost, and quality gains by eliminating unnecessary touches and optimizing workflows before considering automation; robotics requires far more scale and volume than most brands possess.

How should retailers approach specialization if they operate across multiple sales channels?

Work with specialized partners for each channel - dedicated D2C 3PLs for direct-to-consumer, marketplace specialists for Amazon/TikTok replenishment, and traditional partners for B2B wholesale - rather than demanding one provider excel at all three.

What our scoring noted

Our reviewer’s read on each dimension, with quotes from the episode.

Insight Density

13 / 20

The episode offers a solid mix of substantive supply chain insights - particularly around middle-mile speed, inventory pooling, dynamic fulfillment logic, and the move away from blanket next-day delivery. However, it contains notable filler including promotional content (the Accelerate conference mention), repetitive affirmations of key points, and several throat-clearing moments where hosts restate guest comments.

Speed needs to be considered, but it doesn't mean it's better
The best fulfillment networks are blended and are really also focusing on the returns side of the business

Originality

11 / 20

The core thesis - that speed is table-stakes but not always the differentiator, and that specialization beats generalization - is sound but not particularly novel in supply chain discourse. The discussion of middle-mile speed as more critical than final-mile speed is a useful reframing, but the broader frameworks (blended networks, dynamic fulfillment, inventory pooling) are increasingly standard. The episode rehashes familiar concepts like process-first automation and understanding cost-to-serve.

Specialization wins
speed solves a lot of problems, right, like the combination of a forecast being wrong in a very slow supply chain

Guest Caliber

14 / 20

Rob Han, COO of Pattern, is a credible operator with eight years at Amazon in robotics and fulfillment, lending direct practitioner authority. Julian Asorio, as head of a Mebok business unit, has relevant logistics experience but is less clearly positioned as a hands-on operator at scale. Neither guest is a marquee name, but both demonstrate working knowledge of their domains. The lack of a third-party brand executive or truly senior operator (e.g., VP Supply Chain at a major retailer) limits caliber slightly.

Rob Han, the COO of Pattern
I was there for eight years. I saw that. I think I went there when they were like eight fulfillment centers and now there's like two hundred and fifty plus

Specificity & Evidence

12 / 20

The episode includes some specific details - Amazon's two-tiered inbound/cross-stock network, Amazon Robotics acquisition in 2012, retailer examples using store-based returns, and concrete metrics (conversion increase from second-day to same-day delivery, 40% cost increase from cross-country shipping). However, much of the discussion remains abstracted: no named retailers, no specific data on network sizes or cost savings, no quantified examples of inventory pooling ROI or automation payback periods. The conference plug and discount code mention also dilute specificity.

Amazon's network has exploded so much over the past decade...they were like eight fulfillment centers and now there's like two hundred and fifty plus
you see a conversion increase and ad effectiveness increase as you go from second day to one day, one day to same day delivery

Conversational Craft

12 / 20

Host Ellen Wood asks reasonable follow-up questions and works to clarify disagreements (e.g., probing whether centralized or store-based models are better). However, she often accepts broad claims without sharp pushback and frequently restates guest points rather than pressing deeper. Rob's final clarification of the middle-mile/final-mile distinction feels somewhat self-corrective rather than prompted by the host. The conversation meanders at times, and Ellen could push harder on trade-offs, customer data, or concrete competitive examples.

So within that specialization, where do you see some of those centralized versus store based models
And Julian, you had mentioned returns management a little bit earlier. So where do you feel like that fits into this equation

Conversation analysis

Computed from the transcript - who did the talking, and the words that came up most.

Most-used words

speed26amazon25fulfillment24automation23inventory22problem19retailers17supply16twenty15point15better14chain14three13cost13focus12network12

Episode notes

Fast and free delivery is no longer a competitive advantage. In 2026, it is simply the minimum. What separates retail leaders now is how well they balance speed, cost, and flexibility across an explosion of channels and customer expectations. In this episode, Ellen Wood sits down with Rob Hahn, COO of Pattern, alongside Miebach’s Julian Osorio, to break down what winning direct to consumer fulfillment really looks like today. Rob shares what brands are getting wrong about speed, why supply chain flexibility matters more than ever, and how specialization, marketplace requirements, and smarter inventory strategy are reshaping modern retail operations. In this episode: Rob’s view on the new DTC table stakes and why reliability wins How brands can stay flexible across marketplaces, DTC, and retail channel What mid sized retailers should prioritize to improve cost to serve and execution

Full transcript

38 min

Transcribed and scored by The B2B Podcast Index.

If you really want to get ahead, you need to invest in humans, like there's only a few of us that really know how to do this with our hands, So you need to find a partner that can do it, that is specialized in this thing. Or you need to be able to spend way more money than you're comfortable on human beings that know this world better. Because you will not get ahead. You won't be able to differentiate yourself if you are doing what everyone else is doing.

That's just definitionally false. Hello and welcome to Speaking of Supply Chain, where Mebok experts from around the world unpack real stories, strategies, insights and innovations shaping the future of supply chain. I'm your host, Ellen Wood, joining you from my home office during this snow Apocalypse twenty twenty six. The era of D two C as an advantage is over.

It's now table stakes. Customers expect fast, free and seamless, and they expect it everywhere every time. For retailers, that's putting a new strain on legacy networks that weren't designed for the kind of demand. Joining me for today's discussion are Julian Asorio, head of Retail Fashion and apparel distribution business unit here at Mebak and Rob Han, the COO of Pattern.

Welcome, gentlemen, thanks for ever, Thank you great to have you here today. So let's start with the basic one. Julian, in your view, what are the new D two C table stacks in twenty twenty six? I believe the fast and free is no longer a differentiator in North America anymore.

It is it is the minimum, right. I see what's separating leaders now and in twenty twenty six, Just to answer your question, is going to be about reliability and transparency. So retailers and company needs to focus more on balancing inventory margin and incorporating risk management and flexibility in twenty twenty six when they're planning about fulfillment and delivery times and promise to other clients. It has gotten that complicated.

Rob, what do you see. Over the last few years, We've seen such an explosion of options for consumers, right, which is one thing that is really quite different and it has you know, obviously marketing implications like front end how do you meet those consumers where they are? And those actually are driven most about the capabilities on the supply chain side, and so as you get complexities of agentic commerce, and you get marketplaces continuing to grow and new areas. I think one of the biggest things is how do you get flexibility and not get locked into any one solution.

For your supply chain? Right like it is, it's critical to make sure that you can meet that customer wherever they are. And that means if you need to use FBA, you got to use FBA and you got to be excellent with that. If it's FBT for someone on TikTok, you got to be able to crush that.

If it's retail, then you got to be able to do that. And so having a flexible solution is just as important as a precise solution, and I think that is becoming more and more evident as some of that choice is exploded for consumers, and I think that becomes more in focus. Even when you think about something like agentic or AI commerce, it is the complexity continues to increase in the supply chain is not getting easier for brands to navigate, but it is. It's the world we live in.

Absolutely, Yeah. That resiliency to shift quickly when a change happens is almost just the standard. Now you have to be able to shift because it's going to change in the next moment. So what are some of these or what have you seen in some of these top performing retailers.

They're evolving their fulfillment strategies they're in order to meet these customers where they are and where are others falling short? Is it just not having that flexibility or is there anything else that's driving that? Yeah, I mean if we was like we talk about this for a lot more than we have here, but if we focus on I mean, Amazon is a big one in the US, So like, let's take a look at what Amazon is actually doing. I mean they've changed.

It's all about like placement is key, and within Amazon, what placement released defined is right? How quickly can you get like what percentage of your inventory Amazon for like all sellers including Amazon on inventory? How much same day and next day delivery can we get right? Because you see a conversion increase and ad effectiveness increase as you go from second day to one day, one day to same day delivery?

So how can you get there? Amazon's network has exploded so much over the past decade. I was there for eight years. I saw that.

I think I went there when they were like eight fulfillment centers and now there's like two hundred and fifty plus. And so as that explodes, how do you make sure you get that selection close to the consumer? And so Amazon has changed a bunch, like look what they've done with their They have a two tiered, two tiered in inbound crosstock network now, which increases complexity enormously. Right, You're not sending to one place anymore.

You're sending to potentially dozens of places, a minimum of five, but potentially a lot more than that. And so that is all about placement. Which is a good it's a good thing, right, it's better for brands, it's better for the consumer, and it's better for rescale. It's better for all three.

But getting there is extraordinarily hard. So I think getting the fast and free there's a scale of fast and free, right, Like if you're on your own Shopify site, for example, a consumer doesn't need quite as fast normally, right, they've already chosen you. It's a you're solving a different problem on a marketplace, though, it's all about that speed, and so how do you how do you balance that out? But I think that's what marketplaces are doing.

For example, you're seeing this with TikTok making a major push into having speed and reliability. You're seeing Amazon continue to make it more complex and they're not trying to make it harder. They're trying to solve the end problem, which is getting as close to end consumers as possible, and that complexity lands on brands. So I think, really, what the biggest strategy is, like how it's an inventory management strategy, It's how do you have the best inventory pools?

How do you reduce down speed? Here's what I'll end up saying. Forecasting is wrong every single time, literally. Every single time.

So speed speed solves a lot of problems, right, like the combination of a forecast being wrong in a very slow supply chain. Those things can't live together because of forecast is always wrong. Speed matters more than ever today it is super critical getting into a marketplace, getting it to a consumer, refilling inventory pools close to consumers. That flexibility that's required has never been more complex.

And I think the retailers that have one and they're going to win twenty twenty six and beyond, have that understanding. And they've from the very beginning of the entire supply chain are understanding that they need to change the way they think, both on the brand side and on the retailer side. And Jillian, what are you seeing from the network standpoint as well as you know, trying to maneuver within those constraints. Yeah, I can see the best fulfillment networks are blended and a lot of those are really also focusing on the returns side of the business.

So leading retailers right now are using dynamic fulfillment logic deciding basically in real time, where to ship, where to place their inventory, where do they have labor availability, where from which fulfillment center or distribution center they can fulfill in a more productive manner so their end to end cost to serve is cheaper while scifying the clients expectations on service. Right, So, I see best fulfillment networks being more dynamic now with a different and more options and more opportunities to provide and match their services through some keeping regional carriers, crowdsource delivery, ship to store, pickup, fulfilled from stores, some some different strategies that help, as I mentioned, balance their costs and being able to offer the right service to the right client for the right products.

Right, Also networks that are that are able to absorb disruptions like weather events. We we had that issue, you know, right in the last week and continue to be in North America. Right. UPS is adjusting, EDEK's adjusting.

All the companies are figuring out our you know, kicking off or dusting off their their plans and their continguency plants across the network. So networks need to be able to absorb somehow that type of disruptions as well as demand spikes without without breaking without you know, and without breaking their pockets as well. I see some retailers falling behind because they're still focusing on what was mentioned before by rob is chasing Amazon, right, they continue to chase Amazon.

They continue to offer a blanket you know, next day delivery, and they're trying to squeeze in their D to SEE fulfillment and delivery process in the traditional legacy DC operations using the same tools, using the same carriers, using the same technology, and for that reason, they're not able to properly understand their cost to serve and the implications of trying to squeeze in D to SEE in the regular wholesale retail networks. Those companies falling behind in that sense. They really need to see things in a different way, and they need to make sure they ship the product from the right places with the right capabilities, so they can you know, understand their costs and service implications and being able to ultimately provide great service to the clients or great experience to the clients.

I actually, I firmly I actually gave a talk at like a conference last year about specialization. In specialization win right, we went from like there was only retail, right, there's no e commerce, and then it was like you got these really specialized e commerce because you have these traditional one hundred year old retailers right that do the retail repunishment, they do the pallets in cases really well. E commerce happened. They went to specialization, right, whereas like you have e commerce, then you've got retailers or i'm sorry, traditional like three pls.

And then the traditional three pls were like, oh, we can do e commerce, but they did it really poorly. And then this specialized D two C were like, oh we can do B to B and they do it poorly. And like, I think the reality is, I don't think we should lean away. I think actually the specialists win, right, Like I don't do B to B at all.

I do marketplace replenishment better than anyone in the world. I do great D two C fulfillment for example, and like I unapologetically don't do B to B. Like, find somebody that's been doing it for one hundred years, They're going to do a great for you like that. Store all your inventory there and think of me as a forward deployment inventory.

I just I think Julia hit the nail on the head. Specialization wins here, and it is something that we are like brands are struggling to get behind because it's so traditionally like the supply chains the other way. But I actually think that it is where we are headed. One thousand percent is like, don't try to be the jack of all trades, like work with the best at that thing.

Because the distance between the average D two C three pl and the top like we are way way way above the average. So there's still it's not logistics and fulfillment for e commerce has not commoditized yet. We've got tons of time until that's true. Specialization wins.

Okay, So within that specialization, where do you see some of those centralized versus store based models. Really, you know, capturing that audience and being that special snowflake in that special situation, especially during peak pit commands. We just came out of the holidays. You know, if they have a new product launch, you know, where are they going to find that niche?

I think the reality is that it's an unpopular answer, but it is. It depends actually, like it really depends on what you're going to do. What I will say is, no one needs to be in like fifty five warehouses. If you're not doing like an Amazon, right, Amazon is solving a different problem.

Don't try. Don't try to solve the Amazon problem. But like, if it's a new launch, for example, the simply put uh is thinking about it from a network perspective. If you are in a multi noode network, the higher the complexity and the higher the variability, the fewer number of buildings you should be in.

Right, you have to be able to try that off because you were going to get your inventory in the wrong place. So if launch, for example, like don't put yourself in ten buildings or three buildings or five buildings. It depends. Sometimes it's the answer is three, sometimes it's five.

But like most people don't know the answer to that ahead of time. So if you don't have information, the lesson in formation you have, the let the more consolidated you should be within your network. Like that is a general truth, because otherwise you'll be like, Oh, I think that New York will sell more, and then New York doesn't. You don't sign enough and you put stuff an l and then you're shipping across the country.

So slower you're in, you've cost your costs increase by forty percent, and it's a bad consumer experience. So variability and flexibility have gone up as requirements, and that actually means that unless you're dealing with a marketplace like the number of buildings you're in might actually go down. Inventory pooling is more important than than spreading out and being into and spreading yourself out too much. And Julian, you had mentioned returns management a little bit earlier.

So where do you feel like that fits into this equation and does is it flexible? Does it tip the scale towards one model or the other? So let me let me provide my three points on the previous answer about centralization or not so very similar to Roup's point, centralized disease when at scale, you know when to provide a stability during pig seasons. You know they can handle volume seurchs, they can handle throughput.

By implementing automation, they can have multiple carriers and line hold strategies that it can use more efficiently through holidays or major launches. Right, So I see centralized disease playing very well on that space. Store based fulfillment wins when you need speed and regional responsiveness when your demand is not that stable, when you don't have huge volumes to be fulfilled, you know, across your country, so last mild proximities and the options and absorbing some of the geographical demand spikes.

Right. You see, of course in US, in Canada and North America overall, some areas you know, they don't sell the same you know, winter jackets as much as the other areas because of weather differences. So optimizing the based or fulfillment operations in that sense can be also very good. And then the last point is about the orchestration.

To Rope's point, it also depends depends on your strategy, your product, your presence is geography, but it's more about having the proper tools and the proper data to make decisions so they can orchestrate and plan for how to manage the fulfillment operations rather than being a choice and being firefighting all the time. So those are my three points in regards to that. What is really the swing factor here is the returns to my point before, So you can have some similar fulfillment strategies and similar fulfillment operations across US, but what really makes the big difference is the returns.

I believe that a store based and centralization after is the way to go. So the clients need to have the ability to go back to the stores and do simple returns of the stores. A store should have the capability to put that product back in their own inventories if possible, and if not, they need to go to a centralized d C where the overall networking distribution can deal with those volumes. But it doesn't make sense for companies to you know, return products to multiple disease.

Leave those products there, They're going to be hanging around for months and years and then they go through liquidation and there is a lot of inventory carrying costs in that sense, and they're not able to run to turn the product property. So the store base return approach is very, very important and it's been playing a great effect to retailers in US in the last you know, five years. All Right, So we've talked a lot about, you know, how, how this model should be designed and executed, but it's in that execution where we're actually talking about the automation and making sure that it's even possible.

So it's not about robotics for robotics sake. I know, we get into a lot of discussions about the automated fulfilled solutions and people like modernized, modernized, modernized. You know, you have to be able to automate this process because labor is expensive, labor is mercurial. It's going to change if we have this automated.

It's it's so much easier. But it's a tool. It's it's not just robotics to spend millions of dollars on an automated solution, and so as the retailers are grappling with cost, speed, the complexity that you guys are bringing to this conversation, it's not just a tool to do things faster. It's a strict hegic decision in order to implement any of these types of things.

As you pointed out both of you, the Amazon model isn't something that retailers should be aspiring to and it's not feasible for most of them. Bottom line, they just can't do it. So what types of automation are actually helpful for delivering some of this impact and flexibility that the two of you are, you know, commenting on, and how much of it is hype or. Help I hate to respond with the typical consultant answer, which is it depends on mind or Rob already said it before me, which is great.

So basically, how I define, you know, the best automation or what kind of automation to our clients is the best is I define it as an automation works when he's boring, when he's faced, and when he's tied to the network, and it's when he's not a hype. Right. So people believe in throughout the last you know, many years, last ten years, people believe that they can compete if they get to the Amazon level of automations. And the truth is that most North American retailers, mid sized retailers, they can get a lot more value from targeted automation.

And that's where my advice always comes to our clients. Let's focus on what can be more impactful to you that is modular and that can scale up in the future. Goods to person systems, automated sortation depending on the operations, right, smart foot walls or better systems orchestrations like warehouse Management Systems and WUSS and WCASS. Right, there is some numbers out there.

They show that automation and fulfilming models work when they're focused on alleviating pain points for the organization in their end to end fulfillment process and being able to tackle the variability of the operations, whether whether it is demand, whether you know whatever, whatever is creating uh spikes in their in their operations is what they need to tackle. So let's not focus on the flashy, you know, automation. Let's focus on adopting and understanding where the automation needs to be or at the most most of the value and being able to scale up from that.

And Rob being from Amazon, I'm sure you have some some very strong opinions on this. Yeah, I mean this is where I've spent a ton in my career. Right, So, like I was in robotics at Amazon, and I've spent a lot of time focusing on like, you know, how do you remove decision points? How do you remove touches like and that that's actually the problem you're trying to solve, it's not how do I implement robotics?

That sometimes is the right answer. And for Amazon, actually, I mean one of the things when people talk about like robots and Amazon, the problem that Amazon was solving the robotics was not was actually like density. They were trying to get more inventory into the buildings because it was a speed problem, so they're trying to get it closer to consumers. And so therefore, if you look at like keepa Robotics, like what is it twenty twelve, we had acquired keepa Robotics, which became Amazon Robotics.

Right, I learned one of the first robotic fulfillment centers. It was like super cool, incredibly hard, really interesting problem to solve. But it's actually not as much about replacing like it actually happened. It was about storage.

It's like how do you get more into the same building and that allows transportation cost savings and also faster delivery. So like it wasn't like the problem that they were solving was not fancy to Julian's point, it wasn't cute, it wasn't interesting, it was impactful. And so for us, like in my entire career, there's a phrase that I used in my teams all the time, like we do not give ourselves permission to do interesting things. We only do impactful things.

And those impactful things sometimes are interesting, which is fun. We get to build some really interesting stuff, but it has to be impactful. I think there's three kind of there's three things like and some of it is quite boring. To Dueling's point, you have processes, You've got automation, you've got robotics.

There are three separate things, right, So processes could be like I need to move this table from here to over there, and I will remove a touch, because the point is removing touches increases your quality, increases your speed, decreases your cost. So remember the problem you're solving, and solve that problem. Right, So process is actually quite powerful. That requires expertise, that requires understanding of your processes, and like that actually is if you can build processes that are repeatable and scalable, then you can automate those processes.

You can't jump straight to automation, or robotics, and assume that it's going to solve the foundational problem. Figure out what process you need to have and to eliminate actual problems throughout and touches. For examples, like if you stop touching stuff, your speed will improve, your quality will improve, and your cost will go down. Just stop touching stuff.

So focus on your processes and then you figure out if the right solution is automation. And I define robotic versus automation as robotic being something that requires more variability and automation being something that's more repeatable, Like you don't need a robotic solution for a sort for example. Like it's well defined. We've got dozens of different sort of types out there, for example, that can use this.

So I think for everyone to figure out where am I on that scale from just like move the table through, I really need a very high intensity of robotic solution. Most people are not anywhere close to that other end of the spectrum. The vast majority of people out in the world need to focus on processes and software can do the vast majority of what most brands need versus hardware. And that's a person who spent tens and hundreds of millions of dollars on hardware in my career.

But like, you need a lot more scale than you think you need before you need to spend tens of millions of dollars on hardware. You can do a lot. With good humans, good processes, and good software, all right. Well, And that's one thing though, that we've always said at Meebok is if you have to, you have to address the process first, because if you automate a bad process, you're just going to be doing the bad process faster.

It's not going to actually solve the problem. And so I guess you know, we've talked a little bit here in the past few minutes about you know, making sure that those processes are right to begin with and identifying that that initial problem that you're trying to solve with whatever automation or robotics or software. So, how should a mid sized retailer, not the Amazons, they've got their they've got their their flagship, uh, you know, the five star program, but the smaller ones, the smaller retailers, how do they stay competitive and keep up with the rest of the market that is solving these problems very quickly with automated solutions.

Is it just a matter of you know, having that that deep core understanding of your business and your intentions and your goals, or is there something else that they can be looking externally and saying, yes, we do this, saying let's let's copy this, this proven process. I believe Rob already touched a little bit into into that point before he stole a bit of a bit of my thunder there. So the the the right place to start is, of course, it's not copying Amazon. Right is getting very clear on what is the problem they're trying to solve and understanding the cost to serve.

Those are the two main areas that I always focus on, what is it that you're trying to fix and understanding very clearly how much is costing you to serve your clients. Right is beginning to understand where labor, save service failures, return processes, touches, and inventory fragmentation are within their within their network. Right I seen companies or I wouldn't recommend companies to jump to automation right away without being able to fix or understand or fix their current problems that don't probably need automation to or in some cases they do, for example, basic things like inventory allocation, right, inventory allocation strategies, slotting right, understanding their proper segregation of their products, clients and their inventory, how do they manage their order logic?

Right? Those are foundational matters that with minimal investment they can gain some efficiencies. So I'll start from there, you know, understanding and fixing the foundational and the basics, then moving into targeted automation. Once they understand the problem, when they understand their cost they know their main pain points.

They know what part of the network and the process is costing the most. So now let's focus on finding the right amation to solve for that specific problem. Right. And the third point is once you go through the foundational, you go through targeted automation to fix the problems you already know, then move in to designed for flexibility and scalability.

Those will be my three points to highlight for mid size retailers when looking into implementation of automation in the future. Okay, I've got two things that I'll say on this. One. One is a very practical it's a tactical one.

You know, I came in a pattern three and a half years ago and we've built all of our own software and I'll come back to that in a second. So if designed your own hardware, we have built all of our own software. And one of the major reasons that is is because Ellen, you asked the question you asked, you said two things, and I think they're important to differentiate. One was how do I get ahead?

In the same sense as you said, how do I get ahead? And how do I keep up? And the reality but those are two real things. You're right, If you want to keep up, then use the software that's out there and the processes that are out there.

Right, there's only so many good WMSs out in the world, and they're only solving so many problems. And so if you actually want to keep up, use the best of those, pay for them, make it work. If you want to get ahead, then you need to really break the thinking. And so this is my more practical one is like I use flow based systems like exclusively.

Right. So if you go into these old warehouses, they're batchy based, right, So they come in they have to be stowed, for example, put into the racks, taken back out, and processed. That is where old softwares work. You need to remove touches, you need to increase your speed, and so I would encourage all these people to understand how do you implement and how can you think about flow based systems better decision points earlier in the processes.

That is how you can set up You can't execute fungible inventory if you don't have flow based systems which can dynamically do what you need to do. Otherwise you're gonna be touching stuff a ton. It's going to be too slow and you're not going to be able to do it. So if you want to keep up with everybody else, then make sure you choose the right WMS, make sure you are as a vision as possible.

You need great operators. If you really want to get ahead, you need to invest in humans, like there's only a few of us that really know how to do this with our hands, So you need to find a partner that can do it, that is specialized in this thing. Or you need to be able to spend way more money than you're comfortable on human beings that know this world better. Because it is you will not get ahead.

You won't be able to differentiate yourself if you are doing what everyone else is doing. That's just definitionally false. So how do you get to something that is more dynamic, more flexible. You got to break the mold a bit.

All right. So coming into our final discussion point, what is the one fulfillment myth that you think retail leaders need to let go of before they get really into twenty twenty six And what's a truth you think they should build into their strategy instead. Yeah, this is it's fun because I mean I'm not a consultant. I'm an operator, right, So this is I get to talk with tons of brands very much on like the you know, if you would like services side, And it's an interesting thing to watch how brands optimize for things that I think are generally not just not the right not the right thing, and I think a lot of people are concerned about they focus on one piece.

So for example, the marketplaces. For example, you're like, oh, I want to reduce down how much how many different places I'm shipping too, because that will reduce that transportation cost. But now I'm doing larger batches. And now what they don't think about is I'm spending more in inventory because I'm it takes longer to get in because I'm doing LTL instead of full truckload.

And now I have not only. To take longer, so I'm tying out more cash, but then I'm pushing more into Amazon if my lead time increases, so I'm spending more on storage fees, and that doesn't it's a different bucket. So, like the point like you really need to think about this as a total cost problem, and brands struggle with with that problem. So I come back to something I kind of open up with and like speed is more critical than precision, more than ever.

Like then that's true to end the end consumer, but that is also true into marketplaces some brands that are really really big on Amazon for example, or Walmart or TikTok, getting that that piece is more critical than ever. So it's been an I mean, it is fun to be able to have these conversations with brands all the time like this. We're actually we have a we put on our own conference here in Salt Lake City. It's May twenty to twenty first it's here.

It's called Accelerate. Actually, I think we've got a discount code supply Chain thirty. It's a thirty percent off come to accelerate. This is what we talk about.

We come we talk about these kind of problems all the time with supply chain people, marketing people, if you are on marketplaces, we're doing e commerce, is what we end up talking about. But the thing that I would end up saying here at the end of the day is speed is more critical than ever. I'll say, like a fifteenth time, it is something that you cannot sleep on. Is really what will define the way that we move forward as as a as a retail group, like it is going to be more and more important, which means you need to have supply chain capabilities that can keep up otherwise you will get left in the dust.

Absolutely. All right, Julian, what are your thoughts. I'm gonna have to go a little bit against Rob's point there. Yes, speed, speed is great.

I think the myth is that retailers need to let go of that concept that faster fulfillment is always or equal better fulfillment. Right, So, for many years, as you mentioned in multiple times, the industry has been chasing next day, same day, two hours delivery without really understanding their cost, the complexity, the operational risk to do so right in North America demands the mindset is you know, that specific mindset has overextended the networks, has been increasing the pastel cost.

There is labels trained. You know, there is a lot of impact on pig performance because the companies are only or they've been looking only about speed and how to gain that speed without understanding the fulfillment strategy and how the network and to end and the distribution is aligned to that strategy. And usually they're on opposite sides. So that's why my first point is not that speed is not important.

Speed needs to be considered, but it doesn't mean it's better. And when we talk about you know, better fulfillment, that is looking after end to end client experience or customer experience. The winning for filming strategies nowadays or in the future will be those that will they can balance trade offs and intentional segmentation. What I mean by that is not every customer wants the same things at the same right.

So the main point is that we need to design networks that can differentiate between service levels by customer, by product, by geography, and being able to implement that through aligning inventory, automation and last mild choice choices. Accordingly, right, as I mentioned before, you can use ups edics, you know, crowdsource deliveries and other methods to deliver. On top of that, they need to use data to be able to orchestrate and balance service profitability and resilience in real time.

And then last last point here is the retailers or companies that will win in the futures are those that are being able to flex without breaking right, that they can implement the proper automation, that they can embrace optionality, that they can implement potentially multiple fulfillment models within the same network to accommodate to the strategy and in customer demand, that can handle the spikes of volumes and label volativity and carrier disruption. Right, So it's not only about speed.

There's more about speed and in order to make fulfillment networks better and protecting client experience really quick. Jullian, I do I think it's worth the clarification. I actually don't think we're on opposite sides of this. I did not clarify very well, but I think it's worth actually mentioning.

Right, there's first mile, there's middle mile, and there's final mile. On the final mile, I couldn't agree with you more like we are exactly on the same side, Like don't compete with the Amazon meet your customer or they are understand what speed is required. I do think the middle mile as is where speed matters the most, and that's where most of my my focus was the file because the complexity of the number of places, the number of inventory pools, and the number of destinations that our supply chains need to be able to support the middle mile speed, because it's the forecaster gonna be more dynamic than ever, the speed in the middle mile is more critical than ever.

Like the final mile. You and I we do not disagree in anyway everything you said I agree with one hundred percent. But middle mile, which I think is less sexy than the final mile, but I think just as important, if not more important, in a world where we have inventory in so many places, in such a decentralized consumer experience, that is where the differentiation actually lands. And it's less visible, less sexy, but it's just as interesting if you actually break it down.

So I think we're actually alive in the just. Me feel better for nothing else, we're on the same page. Well, thank you gentlemen for joining me today to talk about this topic, and thank you to our listeners for tuning into speaking of supply chain. That discount code that Rob mentioned will be available in the description if you want to check out that user conference in Salt Lake City.

It is felt Lake City, correct, it is yeph Okay, good, I got it right. You know, all the snow is here, so I don't know what's going to be happening in May in Utah. It's not going to be snow. Sorry, we took it all.

Yeah, you stole it. Here's some snow on the mountain. Still, it's quite beautiful, but hopefully not actively snowing a bunch in the city. We should be good by then, exactly.

All right, So thank you to our listeners for tuning into Speaking in Supply Chain. If this conversation sparked a new idea or touched on a challenge that you're navigating it, we'd love to hear from you. There are links in the episode description for you to join the conversation online. Be sure to follow us on your favorite podcast apps so you don't miss out on hearing how global design meets execution.

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