The Impact of Omnichannel Fulfillment on Supply Chains

Posted on Aug 16, 2013 By proshipnews Share:

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Retail is all about the customer experience and omnichannel retail is expanding that. It’s about an end-to-end experience that begins whenever and wherever the customer orders: in the store, e-commerce sites, catalogs and even seasonal or short-term locations. The need to optimize this end-to-end experience is transforming the way retail supply chains deliver the goods.

Measuring Up

The first step in understanding the impacts of omnichannel fulfillment on your operations is to determine how your systems are measuring up and where you need to consider making improvements. Order management systems will need to efficiently handle cross channel inventory locations and allocations. They will need to balance factors like order fill rate, service levels, delivery times and freight costs in order to allocate inventory and service the customer.

Shipping and transportation management systems should also support cost/service tradeoffs for shipping activities. Adding an e-commerce channel can have big impacts on a company’s shipping processes. An e-commerce customer will expect instant information on shipping costs, order status and delivery times. This type of fulfillment requires real-time status feeds and better integration between systems for ordering, inventory and customer management.

ProShip improves the ability to fulfill orders from any inventory location. This includes traditional warehouses, stores, and retail replenishment locations, as well as directly from vendors. By utilizing inventory that is the closest to the customer shipping costs can be minimized while decreasing transit time to customers.

Meeting Customer Expectations

Having the control and visibility of your inventory is vital to meeting customer expectations. You’ve got to be able to see what you have and know exactly where it’s located across all supply chain channels. Systems should support the goal of keeping inventory flexible for fulfill demand regardless of which channel it comes from. Being able to control total inventory access, availability and allocation is key to delivering merchandise to the right place at the right time.

Maximizing efficiencies in the store, at the warehouse and in transit are also necessary to meet customer expectations. Omnichannel efficiency takes many forms. Using hands-free technology to shelve and pick merchandise faster and more accurately or shipping products from the location nearest the customer. Reducing warehouse, transportation and delivery costs are key to controlling costs.

Next Steps

Where does your omnichannel retail operation stand? Many, if not most, retailers are still in the beginning stages of designing and deploying a multi-channel fulfillment strategy and network. ProShip can partner with you and work toward providing the inventory control, visibility and efficiencies to optimize fulfillment and maximize omnichannel customer satisfaction.

Sources: “The Impact of Omni-Channel Fulfillment on Distribution Systems”, fortna. “Fulfilling Expectations: The Heart of Omnichannel Retailing”, Motorola Solutions.

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