March 31, 2003, 12:00 AM

The Internet transforms warehouse and distribution—often in subtle ways

(Page 2 of 2)

Many operations management systems already have this data, but the information is not being used. Sometimes, it’s because the data is not easy to get to because it is buried in a legacy database. Other times, it’s simply because no one has gone to the trouble to make it available.

This is a pure technology task. Applications are available which monitor databases for changes to data in specified fields and when such a change occurs, the application triggers an automatic notification to the customer or the merchant-buyer. The most obvious example of this is package tracking. UPS, FedEx and Airborne web sites have become hugely popular as a way for consumers to find out where their packages are. But it is possible for someone else to pro-actively notify the customer of where the package is-most simply haven’t done it, yet.

Customers, both business and consumer, expect you to provide information in a pro-active way. If you have information on their order, they expect you to tell them about it-they should not have to seek it out. This customer service phenomenon is leading to event-driven messaging in warehouse and distribution systems. It ties the warehouse management system to customer service in a way that most operators find intrusive. But they have to get used to it-it is becoming another part of the new reality.

4. Warehouse and distribution come closer to the front office

There has always been tension between marketing departments and operations departments. However, the tension level has increased with the shortened timeline between the conception of a marketing idea, its execution, and the need to process and ship an order generated by that marketing effort. Online marketers such as America Online literally change the marketing execution in the middle of the day and distribution operations must be able to respond. The distance in time and data between the front office and the back office today can be measured in seconds.

Once again, accomplishing this requires both a technology and cultural change. The technology must provide the data to support this interaction. The primary issue is speed of access to the information. As a marketer, I phrased it this way to technology people, “I want to be able to get an answer to a question I haven’t thought of yet.”

But even when useful information is available in the timeliest way, marketing and operations must recognize their interdependence. They must create a collaboration to accomplish mutual goals, rather than remain opponents. This means regular, frequent, face-to-face meetings, even at the most contentious moments when faced with the most difficult problems.

It’s clear that the Internet has raised the bar on warehouse and distribution operations in almost every way and that the changes of the last few years will continue to develop over the next few. The struggle along the way is to maximize the value of existing infrastructure and at the same time leverage new investments to meet growing demands. Finding this balance is the increasing burden of warehouse and distribution center operators.

David P. Himes is senior vice president of business process solutions for NewRoads Inc., a business process outsourcer of fulfillment and customer care services based in Greenwich, Conn. He can be reached at david.himes@newroads.com.

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