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  First Thoughts

    Dan Gilmore


    Supply Chain Digest

Jan. 19, 2017

Supply Chain News: Trip Report - NRF 2017

SCDigest Editor Dan Gilmore on Two Days on the NRF Show Floor in New York City


I am back from two very hectic days at the National Retail Federation's “Big Show” conference and trade show, as usual at the Javits Center in New York City.

Thousands of you have viewed our NRF Day 1 and Day 2 video reviews - thank you.

As I noted in my Day 1 review, I cover this show, which includes many in-store technologies a bit far afield from supply chain, because: (1) in the end, almost all businesses, most notably of course consumer goods manufacturers, are connected to what happens in retail; and (2) there are usually interesting developments of general interest to all of us as consumers.

Gilmore Says....

We are on the verge of solving much of the store out-of-stock problem.

What do you say?

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These are dynamic times (to put it mildly) for retailers. Ecommerce sales grow about 15% year over year every quarter. Amazon grows at about twice that rate. There are major opportunities for retailers in terms of “omnichannel,” though few make ecommerce profits, while there are big pressures on the store, with a wave of closings announced last year and a few more already in 2017.

With that said, there were a bit more than 30,000 attendees at the show, up slightly from 2016, and there is no question the show felt crowded.

I struggled after Day 1 to identify an overall theme to what I was seeing at the show. A continuing sub-theme in recent years is that virtually all software development is going to smart phones and tablets. That goes well beyond POS-type systems - a robot designed to travel store aisles and find out-of-stocks was being controlled by a smart phone app too. This is where software is heading - plan and invest accordingly.

But on Day 2, the real theme finally hit me, when I spent some time in the IBM booth.
And that theme is a product: IBM's Watson supercomputer. You probably know Watson for beating Jeopardy champions or before that world champion chess player Gary Kasparov, but here at NRF virtually all IBM's large booth was devoted to applications running on Watson across almost every area of software.

The key is Watson's massive computing power combined with a powerful artificial intelligence capability, allowing Watson to consider huge amounts of structured and unstructured data in making decisions, learn as it goes, and think like a human - in many cases better than a human.

IBM was demonstrating two very real supply chain applications, one on supplier chain risk management, the other on optimizing parcel shipping for ecommerce, which IBM says is in use at one large etailer.

What IBM is bringing to the table with Watson is a level of smarts and optimization we haven't seen before. I am sure it all costs lots of money, but this may be the real herald of where software in the supply chain and far beyond is headed. Of course, you can ask Watson pretty sophisticated questions, as I saw in the demo, and get very good answers.

I also learned at the show that in 2016 IBM acquired all the data assets of, which retained its television channel and website. Why would IBM do this? To have a rich database of previous and upcoming weather to feed to Watson for many applications, including supply chain. IBM also now has weather data back to the 1970s, which can allow a company, for example, to learn how weather really has historically impacted sales of specific products in specific locations.

In my opinion what IBM is up to is a threat to any software vendor that provides decision support tools, and a look into a very brave new software world - more on this soon.

I am only going to have room below for a portion of the solutions I reviewed in the videos - go to the videos for more.

I'll start by noting that I stopped by the Datalogic booth, and spoke with someone about their so-called wide area reading system for RFID. These things look like an extra large pizza box, mounted on the ceiling. They systems read individual RFID tags on items, and can identify when an item has been moved, etc.

Each reader can cover about 1500 square feet, and they can be ganged together for larger areas. I asked about the feasibility of using this technology in a distribution center, enabling continuous monitoring of inventory of say RFID-tagged cases.

Alas, the answer is this isn't going to happen any time soon. You would need too many of these readers, and the metal in the DC racking plays havoc with RFID signals. Sounds like it is going to be quite awhile before we can bring this technology into distribution.

Which leads me to the next coolest new thing I saw at the show, which was a new - and expanded - wide area reading system from Zebra, called smartsense for retail.

What makes this different from other systems is that RFID reading is just one of its capabilities. It can also capture video with embedded cameras, use some ultrasonic technology to track smart phones, and has one other data feed that is escaping me.

This, Zebra says, can enable richer applications, such as tracking a given specific shopper through his or her smart phone combined with what RFID tagged items he or she has in a shopping cart. This is innovation for sure, and a very new type of more total system solution from Zebra.

I will note as an aside, we will soon all be tracked continuously as we move through a retail store, though you can opt out of some tracking on the Zebra system.

JDA introduced a new system called "Store Optimizer," in partnership with Intel (which continues to up its retail sector ante) so that the software receives data from Intel's own RFID gateway product that can also deliver video and other data feeds.

Greatly summarizing, the JDA solution will marry that data with its in-store workforce management solution, and in the process at last turn task management in-store from basically an electronic checklist into more like how task management works in a WMS in the DC. In WMS, work is queued up and assigned via mobile device based on priority, permission and proximity - a change I have actually been recommending for retail for several years (see my 2009 column Warehouse Management to the Rescue for Retail Out-of-Stocks?).

As a simple example, the priority of getting a sweater left in a dressing back on the floor highly depends on whether there are more of that color and size on the rack or it is the only one in the store.

Running low on room and thus forced into extreme summary mode:

Softeon's Distributed Order Management System (DOM) not only supports decisions for optimal order fulfillment across various sourcing points, as is the core of DOM functionality, but at omnichannel leader Duluth Trading Co. and others uses the same DOM platform to optimize the inbound flow of goods, determining where to optimally send receipts from offshore suppliers across the distribution and store network to balance inventory on an almost daily basis.

I very much liked the system from Apex Supply Chain Technologies that controls access to mobile devices like RF or voice terminals, in a highly secure mode. These automatic dispensing units can be placed in a DC or retail backroom, and the system secures the assets, eliminates the need for a human to manage giving the devices to workers and their return, and can be modularized around a facility to get rid of the long lines that often result from a central asset management location. The Day 2 video shows how this works - it's worth a look.

There is obviously much interest in using smart phones as data collection terminals in supply chain applications, but how do you get the bar code scanning capabilities? There are free apps for reading bar codes for sure, but the performance of those apps in supply chain applications is likely to disappoint.

Swiss company SCANDIT has created a software development kit or SDK that software vendors or companies themselves can use to add scanning capabilities using the phone's camera across almost every symbology, and the performance is incredible. The booth featured an iPhone reading bar codes on a spinning wheel at amazingly fast speeds, and a phone reading nine bar codes on a shelf of inventory simultaneously. Data collection hardware manufacturers generally want to sell a scanner module to add to the phone.

Honeywell, which acquired voice leader Vocollect a few years ago, released a new voice solution that can work on any device, and does not require the Vocollect terminal - that is a major change.

Out of room. Interesting two days. We are on the verge of solving much of the store out-of-stock problem.

Any reaction to Gilmore's NRF 2017 summary? Were you at the show? What caught your eye? Let us know your thought at the Feedback section below.

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