Bill Hutchinson recently met with associates in an informal session to share how SHC’s supply chain is supporting our company’s transformation. In his role, Bill is responsible for all aspects of the company’s supply chain, including distribution, transportation, customs compliance and global sourcing. After speaking, he spent some time answering questions.
Here are a few of the questions associates asked:
What made you come to Sears Holdings?
When I worked at different organizations and looked at Sears Holdings as a competitor, the appliances business and home delivery infrastructure was so much larger than what my team managed. There was no way to get the scale, density and competitive advantage that Sears Holdings had over us as a competitor. I would look at Sears Holdings’ assets at the time and think, “If we only had that, what else could we do with it?” I also saw Sears Holdings doing things in omni-channel ahead of anybody else and ahead of a lot of other industries – innovations like Buy Online, Pick up in Store, across formats (either Kmart or Sears). These integrated retail programs really resonated with me.
Finally, I bought into Sears Holdings’ strategy. I love the structure that our company has. The combination of our member-centric and integrated retail model is pretty exciting when I think of the work my team is doing in supply chain to support our transformation.
How does supply chain work with other business units?
Our business units have different requirements of the supply chain to support their growth; some need cost advantage above everything else, others need improved cycle time or delivery precision. That requires my team to source differently and fulfill differently. In supply chain, you sit in the center of the organization and support balanced trade off decisions. We’re able to influence and help figure out how to implement the outcome each business unit wants. It’s a lot of fun to be able to apply our expertise in different ways and drive economic benefit for our organization.
Can you talk about Project Cheetah and how you see it evolving over the next holiday season?
In 2012, Sears Holding launched Project Cheetah, enabling us to make a two-day promise for ‘mailable’ items. This initiative leverages our store assets and in-store inventory to deliver products to our members within a two-day timeframe, using inexpensive ground shipping. Associates at Cheetah designated stores have the ability to pick orders at different periods of the day making them more productive.
Proximity is also key. We are able to fulfill orders more closely to the customer, reduce step mileage, logistics cost and inefficiency. The difference between our supply chain and others are the processes we use to figure out where orders are fulfilled. The system we use is a little more sophisticated and looks at our in-stock position in certain markets. It also evaluates the cost service trade-off of certain products by dimensional weight factor or freight cost and it then makes a routing decision of where to place that order. Those algorithms and the way companies route orders determine winners and losers.
With the changes in SHC’s footprint and the company’s transformation, how is the supply chain business unit adapting?
There are a couple efforts our team is going through. One effort includes understanding what our footprint needs to look like and repositioning potential assets in the supply chain to service different customer’s needs. Our team has gotten creative partnering with store teams, using Cheetah stores and building online fulfillment capability in existing distribution centers. We feel we have this season’s capacity needs covered and we have the line of sight to handle the growth trajectory of the business for the next several years. I think there are a lot of examples where we are able to react to our company’s needs very cost effectively to meet the needs of a dynamic and changing customer base.
How do you view our transformation?
There are successes that we can celebrate within our teams and across our organization every day. It’s good to do that, but it’s also good to never be satisfied with our level of performance because none of our competitors are. We need to continue to drive relentlessly and focus on change. Whether an associate has been with Sears Holdings for three months or 40 years, we all have to be open-minded to change and truly embrace it. Given the company’s trajectory, we have to make some different decisions. But if we do it together, I know we can be a force in the retail industry.