BY SUSAN K. LACEFIELD, ASSOCIATE MANAGING EDITOR
E-COMMERCE
THE WELL-KNOWN SUPPLY CHAIN CONSULtant Jim Tompkins has an analogy for the typical
retail store backroom. These backrooms, he says,
look like many people’s garages, serving as an unorganized storage space, with items and boxes stuffed
and precariously stacked in every odd corner.
However, as more retailers experiment with fulfilling online orders from their brick-and-mortar stores,
Tompkins’ consulting company, Tompkins International, argues
that the backroom must evolve into a place for picking, packing, and
possibly shipping orders. But accomplishing that will require greater
organization, more attention to processes, and possibly automation.
In short, backrooms will need to look less like a hoarder’s garage
and more like a mini-distribution center. As these storerooms start to
undergo this transformation, retailers will have to ask themselves the
following key questions.
1. WHO OWNS THE BACKROOM?
For a long time, the backroom has been the province of store operations or merchandising; logistics and warehousing folk typically had no visibility into what
was taking place inside it. But as the backroom’s role expands to include more order fulfillment responsibilities, companies should re-evaluate whether that old organization model still
makes sense.
“What do merchants do well? Merchants understand the customer and how to sell prod-
uct,” says Tompkins. “What does the supply chain do well? Supply chains understand effi-
ciency, product flow, and having reliable information. If the backroom needs to focus on the
efficiency of product flow, then it makes sense for the supply chain to own it.”
Indeed, some leading players are already moving in this direction. Last year, for example,
Wal-Mart Stores Inc. shifted reporting responsibility of its 3,288 U.S. “supercenter” backrooms
to its logistics division. Those backrooms had previously reported to store management.
2. WHERE SHOULD PICKING TAKE PLACE?
Currently, a little more than a third of companies are fulfilling e-commerce orders from
the store, according to a survey conducted by DC VELOCITY in conjunction with ARC
specialreport
As retail goes omnichannel, more
vendors are filling online orders from
stores. This has big implications for
their backroom operations.
Does the store backroom
need to look like a DC?
