Live from NCOF: A “Murderers Row” of Ops Pros

Schaumburg, IL—The Monday afternoon Power Forum at the National Conference on Operations and Fulfillment featured operations executives from Disney Shopping, J. Jill, Lifeway Christian Resource, and Urban Outfitters—a “murderers row” of experts, to quote session moderator (and MULTICHANNEL MERCHANT managing editor) Mark Del Franco.

Although their businesses varied in terms of market sector, size, and distribution channels, the speakers faced similar challenges and offered complementary advice. For instance, most agreed that reconciling multiple channels was among their greatest operations challenges.

“We’re trying to fit a retail operation into a facility that was specifically tailored to a direct operation,” said Kathie Lynch, vice president of fulfillment operations for women’s apparel merchant J. Jill. The company, which had no retail stores through 1999, to date has 204 nationwide. This has required implementing numerous changes in the distribution center, some relatively small (modifying the dimensions of the trash conveyor to accommodate different sizes of trash) and some huge (introducing a pick-to-light system for retail).

Joe Kiley, senior manager for facilities and engineering for Disney Shopping, faces an inverse challenge. Disney transitioned from selling via catalog and the Internet to selling online exclusively last year. As a result, there’s as much as a 40% variance on merchandise projections in a given day. What’s more, Kiley now reslots within the DC on a daily basis, to accommodate each day’s Web promotions.

All the participants emphasized the importance of benchmarking. “We need to know what we can expect from ourselves based on what others are doing,” said Ken McKinney, director of distribution for multititle cataloger/retailer Urban Outfitters. “But you need to be absolutely certain that you’re comparing apples to apples… It’s very easy for someone to offer up their information, but unless you know where that information came from, it’s of no use.”

So when benchmarking against other organizations, you need to be sure that you all define terms the same way, or that you at least understand how they define terms and allocate costs. Lynch pointed out that J. Jill has long defined a transaction as a unit shipped; The Talbots, a cataloger/retailer that acquired J. Jill last year, also tracked units between channels and to its outlet stores in defining a transaction, making it all but impossible to neatly compare certain functions between the two businesses.

“Figures lie, and liars figure,” said Randy Brough, supply chain manager for wholesaler/cataloger/retailer Lifeway Christian Resources. Anyone can manipulate any benchmark in any way, he continued, “so make sure you start by benchmarking against yourself.” That’s how you can most easily see changes and track trends, he added.

And a frustration with a lack of communication on the part of their marketing and merchandising colleagues was nearly universal among the panelists—and the audience—as well. As they see it, the merchants and marketers in effect make the promises that the ops team has to fulfill, yet they often neglect to alert the ops team as to what these promises are.

“As the logistics guy, I find I’m the one who has to initiate things,” McKinney said. “They don’t come up to me and say, ‘Ken, can you come up with this?’ I have to go to them and ask what’s coming up in the next six months.”

Lynch said that she took it upon herself to initiate regular meetings with the marketing and merchandising staff, inviting them to J. Jill’s New Hampshire facility, which is about 75 miles from the company’s Massachusetts headquarters, “so that they walk us through what’s going on.”

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