For years, supply chain performance in retail was often judged on speed and cost efficiency.
At the Retail Industry Leaders Association conference in Orlando earlier this month, Matt Guffey, UPS’s EVP and Chief Commercial and Strategy Officer, said those priorities still matter, but they are no longer enough on their own.
“Fast and cheap are not the only metrics that matter anymore,” Guffey told attendees.
Speaking alongside him, Gap’s Chief Supply Chain Officer Sally Gilligan described how the retailer has spent the past several years reshaping its network to handle constant disruptions.
That shift began during COVID, when Gap identified single points of failure across its sourcing and manufacturing footprint. But the pressure did not end there.
“The level of disruption just keeps coming,” Gilligan said, pointing to everything from recent storms to trade policy changes announced just hours before her talk.
Diversification alone is not enough. Gap has also invested heavily in automation throughout its distribution centers. The goal is not just cost savings, but also flexibility.
“You have to make sure you have returns,” Gilligan said, referring to return on investment. “But then how do you allow that to also allow for flexibility?”
The automation allows Gap to dial up or down depending on what different brands need at different times. Sometimes the company is solving for speed, such as when launching a limited-edition collaboration. At other times, it focuses on value during promotional periods. The network can adjust.
Gap has also changed how it works with logistics partners, including UPS. Instead of treating them as vendors who deliver a service for a price, Gap now views them as strategic partners that help solve problems together.
Guffey pointed to returns as one example. As e-commerce grows, so do returns. UPS acquired Happy Returns and brought that capability to the table. Working together, the companies were able to scale returns faster than if Gap had built everything in-house.
“It’s not a one-way conversation. It’s both ways,” Gilligan said. “We put our problems on the table, we put your ideas and our ideas on the table.”
Perhaps the biggest change is internal. Gap’s leaders are building what Gilligan called “managerial muscle,” the ability to make trade-off decisions in real time as conditions shift.
“What you’re solving for today, you may not be solving for next week,” she said. “You can start 10 things and get them all done 30%, or you can do three and really drive them to flourish. I think it’s a really important discipline.”
