John Munnelly, head of operations at retailer John Lewis’ Magna Park Campus, talks to Internet of Business about how the Internet of Things (IoT) is improving supply chain processes, especially during peak periods like Black Friday and Christmas.
IoB: How do you see IoT technologies improving supply chain processes, and what examples can you give of this at John Lewis?
“Everybody is trying to predict how customers shop, when they shop, what they shop for and what times they shop…they’re trying to get a more predictive view on their shopping habits and behaviors. And it’s fair to say that we’re doing as much as we can on that Big Data challenge, from a business perspective.
“The Internet of Things from an engine room perspective is probably a little bit different. We’re doing things like an RFID roll-out on a lot of our fashion range, and we’re in the midst of a 12-18-month campaign with that. So, we’ve got quite an aggressive rollout of RFID technology to help us with in-store inventory and eventually, customer proposition. We’re doing lots with Big Data, and we’ve done all kinds of trials with beacon technology in store and so on.
“Our main aim is to be more demand led, rather than production led. The more we know about customers and how and when they shop, the more we will know about our inventory, enabling us to have the right stock at the right place, at the right time.
“We’ve spent £150 million ($189m) in investment on the facility to date and that’s improving the way we fulfill customer orders. Within the facility here, we house around 250,000 different products and we serve our all channels, whether that’s shop replenishment or customer delivery from that one single pool of stock.
“That’s something we aspired to some years ago, and we managed to achieve that.
“By consolidating most things under one roof – which is what we’ve done with the Magna Park Campus – we were able to reduce that kind of packaging issue where the customers are getting 2-3 packages, and equally we were paying 2-3 more charges. Magna Park is about a single pool of stock serving customers and shop replenishment.”
How does this automaton work at the warehouse, and what’s the role of robotics?
“We’ve got a number of different automation solutions. We’ve got automated storage solutions and automated picking solutions, so our goods-to-person technology is quite state-of-the-art.
“We have multi directional shuttles – that’s a shuttle that can turn 90 degrees, we have the connect OSR shuttle, and we have got something like 860 robots in the warehouse. We have 22 packaging robots that make customer cartons from blank cardboard, and equally fold within themselves and take all the spare packaging. We’ve got a whole range of finishing capabilities from the customer order point of view.”
How crucial is IoT in making supply chain more seamless, especially at this time of year?
“I think the key aspect is if we can get more information about how the customer shops – because ultimately we are all creatures of habit – and I think if we get [that personalized] data eventually, then we can have demand driven supply chains, rather than production driven supply chains.
“That ultimately leads to smaller warehouses. And if you think that every retailer out there is building capacity to accommodate customer demand on these peak times, like Black Friday, then the more we understand what the customer needs, then the more we’ll be efficient. Ultimately, all that information certainly does help.”
What long-term benefits do you think IoT will bring to retailers and the supply chain?
“If you take the whole fourth industrial revolution, I think we’re still yet to see the real benefits of Augmented Reality or 3D printing on the supply chain. You’ve got autonomous vehicles which are interesting, but from a physical supply chain and logistics point of view, Big Data is the biggest opportunity, as the more we can be demand driven rather than production driven, then we can start to do things in much leaner and more cost-conscious ways.
“Big Data will be the first [emerging area], and I think the advancement of robotics will be the second. I think we will see lots more here in the not-too-distant future as well which again, if you look at resource challenge and people availability especially for those peak periods like Black Friday, it’s becoming a difficulty commodity to secure that amount of resource for a short period of time.”
Internet of Supply Chain is the only event bringing together Supply Chain executives representing the retailers, manufacturers and logistics operators to share best practices and inspire new revenue opportunities.
The two-day forum will offer unheard before case studies on how the total lifecycle of a product can be monitored in real-time and be delivered on time and without any compromise in quality. Key themes will include using IoT to improve end-to-end visibility, modernising a legacy supply chain process and marrying manufacturing and supply chain.