Macy's first chief supply chain officer merged its siloed store and e-commerce networks

Macy's hired Dennis Mullahy as its first-ever Chief Supply Chain Officer in March 2019. He took over a supply chain where each delivery channel — stores and e-commerce — ran its own transportation plan, technology stack and warehouse network, with vendors shipping into both systems separately and almost no ability to rebalance inventory between them.

At Macy's February 2020 Investor Day, alongside a plan to close 125 stores and cut roughly 2,000 jobs, Mullahy laid out a centralized supply-chain organization spanning sourcing, inventory, transportation, distribution and procurement. Macy's would fully implement its 'hold and flow' model: light initial store allocations with flexible replenishment, using multipurpose warehouses that could serve stores or e-commerce orders instead of two separate networks.

A pilot of the centralized model had already cut cost per e-commerce package by $3.74, sped total fulfillment time by 6%, and reduced split shipments by 3%. On sourcing, a pilot using data-driven costing models produced a 6% cost-of-goods improvement, and the company targeted 6-8% further reduction over three years alongside a 30-day cut in lead times.

A pilot cut e-commerce package cost $3.74 and sped fulfillment 6%; the rollout targeted $500M in year-one savings and $1.5B annual gross savings

Two disconnected warehouse networks meant duplicated technology and transportation costs with no way to shift inventory to where it was needed.

Each of Macy's private brands sourced independently, leaving cost and negotiating leverage on the table across the portfolio.

A disappointing peak season and years of underperformance made incremental, channel-by-channel fixes insufficient; executives wanted one accountable owner across the whole chain.

Hiring a single supply-chain owner to unify channel-siloed logistics can unlock savings that no individual channel team could reach on its own

Analysts including Moody's called the consolidated model a move toward omnichannel best practice, while cautioning that executing so many large changes at once raised near-term execution risk to inventory availability during the multi-year rollout.