Weathering the storm: how retailers shifted to ship-from-store in record time

When the US went into lock­down dur­ing the Covid pan­dem­ic, PVH Corp, which owns icon­ic brands like Tom­my Hil­figer and Calvin Klein, realised much of its stock was trapped inside shut­tered stores. At the same time, ecom­merce demand for its casu­al­wear lines began to surge as shop­pers sought com­fy clothes to wear while work­ing from home. This left PVH scram­bling to fill a rush of new online orders while also being unable to sell any­thing in-store – an unprece­dent­ed sit­u­a­tion.

“If you were a tra­di­tion­al high street retail­er with a high street pres­ence and between 15% to 30% of your busi­ness online, the forced clo­sure of your store net­work was not some­thing you were ready for,” says Craig Sum­mers, man­ag­ing direc­tor for UK and Ire­land at Man­hat­tan Asso­ciates, which designs, builds and deliv­ers sup­ply chain soft­ware that uni­fies front-end sales and the back-end sup­ply chain. “And in the case of most busi­ness­es, you could nev­er have been ready for it because tra­di­tion­al infra­struc­tures don’t allow you to be.”

Although few would have pre­dict­ed nation­wide store clo­sures at the start of 2020, PVH’s long­stand­ing part­ner­ship with Man­hat­tan Asso­ciates meant it was quick­ly able to address the rapid growth in online orders and scale its ful­fil­ment capa­bil­i­ties.

PVH piv­ot­ed quick­ly to con­fig­ure busi­ness rules in Man­hat­tan Dis­trib­uted Order Man­age­ment that exposed store inven­to­ry to online con­sumers, rout­ing orders to opti­mal ful­fil­ment loca­tions, and turned closed stores into mini ful­fil­ment cen­tres for ecom­merce orders. In-store staff were also trained on how to pick and pack these orders.

“The basic prin­ci­ple we try to work on with our cus­tomers is if you’ve got it, you should be able to sell it,” says Sum­mers. “So real­ly it should­n’t mat­ter where it sits with­in the sup­ply chain.”
PVH also set up sep­a­rate ecom­merce ful­fil­ment areas at two of its ware­hous­es to bol­ster the efforts of its exter­nal ful­fil­ment provider, with work­ers used to han­dling pal­lets shift­ing to pick­ing indi­vid­ual items.

“Thanks to Man­hat­tan Asso­ciates’ order man­age­ment soft­ware, PVH was able to lim­it the vol­ume of online orders flow­ing to the ware­hous­es while staff got up to speed. And all of this was achieved in a mat­ter of weeks.

The changes PVH need­ed to imple­ment have giv­en the com­pa­ny a bet­ter han­dle on where demand is and where con­sumers are shop­ping, and allowed it to be far more nim­ble in its approach to inven­to­ry. In fact, ship-from-store has proved so suc­cess­ful that it has now become part of PVH’s long-term strat­e­gy.

Pivoting at speed

PVH is just one of the count­less com­pa­nies that had to find new ways to deliv­er to cus­tomers after a surge in ecom­merce sales and the clo­sure of stores. Stay-at-home orders and social dis­tanc­ing mea­sures closed all of US fash­ion acces­sories brand Kendra Scott’s stores, for exam­ple, and its main dis­tri­b­u­tion cen­tre in Austin, Texas was lim­it­ed to min­i­mum basic oper­a­tions. Though some inven­to­ry was rerout­ed to a 3PL in anoth­er state, capac­i­ty was severe­ly ham­pered.

Man­hat­tan Asso­ciates was already a part­ner to Kendra Scott, help­ing the com­pa­ny keep up with growth through the Man­hat­tan Order Man­age­ment Sys­tem. As the cri­sis deep­ened, the retail­er reached out to the Man­hat­tan team and got to work imple­ment­ing Man­hat­tan Store Order Ful­fil­ment. After just six work­ing days, Kendra Scott was able to start lever­ag­ing stores to ful­fil ecom­merce orders.

Piv­ot­ing at this kind of speed would have been impos­si­ble with a lega­cy sys­tem. “Even with all of the right intent and the­o­ry in place, the exe­cu­tion would have been real­ly hard with an old school archi­tec­ture,” says Sum­mers. After the suc­cess of its ship-from-store efforts, Man­hat­tan also helped Kendra Scott intro­duce curb­side pick­up capa­bil­i­ties.

Although busi­ness­es have talked about the need for this kind of sup­ply chain agili­ty and resilience for many years, before the pan­dem­ic most had only made incre­men­tal progress. Today, many have now seen first-hand that cloud-native solu­tions can pro­vide a lev­el of flex­i­bil­i­ty, agili­ty and sup­port that sim­ply isn’t achiev­able oth­er­wise. Take vis­i­bil­i­ty: with­out it, you can’t make tru­ly informed deci­sions dur­ing a cri­sis.

“If a retail­er has a lot of stock in Aberdeen, it may not always be worth them mak­ing it avail­able for sale in Southamp­ton,” says Sum­mers. “But that’s a deci­sion you can make on an informed basis because you have the vis­i­bil­i­ty and the infor­ma­tion you need.”

Versionless visibility

Good, reli­able data that spans all of your sys­tems and is stored in one place is the foun­da­tion of this kind of vis­i­bil­i­ty, and that’s only real­ly achiev­able with a cloud-native solu­tion. Why? Well, for one thing, the timescales involved in plan­ning and putting in place a large on-premise sys­tem mean that “by the time they go live and have been in use for a cou­ple of years, you could be sev­en years or more behind cur­rent think­ing,” says Sum­mers.

In oth­er words, if your soft­ware isn’t cloud-native and ver­sion­less like Man­hat­tan Asso­ciates, “you’re always going to be play­ing catch-up.” That may not be a seri­ous prob­lem in some busi­ness areas, he adds, “but the types of sys­tems need­ed to keep the sup­ply chain run­ning means there is a nev­er-end­ing require­ment to be up-to-date.”

To be tru­ly up-to-date and resilient, busi­ness­es also need to struc­ture their oper­a­tions around inbound and out­bound flows rather than siloed ware­house and trans­port func­tions. Because in retail, there’s also a nev­er-end­ing require­ment to scale up and scale down your activ­i­ties.

“Retail­ers have always had busy peri­ods, peaks through­out the year, whether Jan­u­ary sales or Black Fri­day,” says Sum­mers. “All of their infra­struc­ture has to be ready for the hour of that max­i­mum demand. And yet the rest of the time, it isn’t real­ly utilised. The elas­tic­i­ty of the cloud means when you need that capac­i­ty, it’s there. It allows you to meet demands as they come along.”

The right soft­ware can also help com­pa­nies to pro­tect their employ­ees dur­ing a cri­sis. “Peo­ple have to come first,” says Sum­mers, empha­sis­ing that, with­out them, sup­ply chains sim­ply don’t work. “In a dis­tri­b­u­tion cen­tre, you want to make sure that the ware­house man­age­ment sys­tem knows how to keep peo­ple apart safe­ly. Because if social dis­tanc­ing mea­sures are in place, you may need to quick­ly lay­out your dis­tri­b­u­tion cen­tre in a dif­fer­ent way or change work sched­ules so that peo­ple aren’t con­cen­trat­ed in one place.”

Despite the chal­lenges of the pan­dem­ic, Man­hat­tan Asso­ciates deliv­ered 591 cus­tomer projects in 2020 across the world, with the major­i­ty deliv­ered remote­ly. Ulti­mate­ly, says Sum­mers, “resilience is being ready for the next unknown. You need to know that what­ev­er sys­tem you’ve got today can flex quick­ly for what might come next.” And as PVH, Kendra Scott and oth­er retail­ers have found, that’s exact­ly what Man­hat­tan Asso­ciates helps its part­ners to achieve.

For more infor­ma­tion please vis­it manh.co.uk

Pro­mot­ed by Man­hat­tan Asso­ciates