Where do the ideas come from which drive change and innovation in the supply chain? There is no unanimous answer to this, as innovation springs from both the shipper and provider sides of the house. But, the consistent engine of supply chain innovation down through the years has been the retail industry--either through their own creative juices or by the demands placed on providers by retailers in the pursuit of their marketplaces.

Vendor-managed inventories. Going beyond Just-In-Time, Wal-Mart and Procter & Gamble have worked together in a now-famous partnership for soaps, detergents and the like to be placed in retail stores, with title passing at the check-out counter.

Pull-through operations. IT improvements, where real-time data and collaboration between supply chain members make it possible for demand at the point-of-sale to drive the order cycle and the supply chain. Companies such as Polo Ralph Lauren and Bloomingdale's make market demand the driving force, and their logistics providers are asked to provide service in kind.

Postponement and merge-in-transit. This practice seeks to redefine the decision points for the supply chain. Companies such as FedEx and UPS have implemented sophisticated merge-in-transit solutions for their retail clients. But, it's companies like Target which drive postponement, where cargo from various origins, including domestic, is taken out of the origin container and matched with products going to the appropriate stores or distribution centers.

Global sourcing. More than any other industry, retailers literally search the globe for the best combination of price, quality and production availability, and the Internet is one of their favorite tools. This global sourcing puts pressure on transportation and logistics providers to develop supporting networks, and to innovate with services such as Orient Overseas Container Line's (OOCL) multi-country consolidation program.

Door-to-door focus. Door-to-door pipeline management enables the retailer to determine in-store dates and landed costs, and thereby manage their margins and product offerings. Retailers are less concerned with speeds over the water, ground or air, and more with the time in the order cycle and in the pipeline. Time is money to the retailer, and logistics outsourcing has been the result of this process in many instances.

Quantification. There is no substitute for running the numbers. Home Depot and Wal-Mart are well known for using every available tool, particularly IT, to measure and manage. They work with companies like NYK and MaerskSealand to develop measures of supply chain cost and performance, which in turn helps the retailer to determine modal trade-offs, inventory strategy, and price point.