By: Fortna Inc.
Companies are investing in omnichannel distribution operations to drive competitive advantage and grow revenue. Omnichannel DCs promise better utilization of labor and inventory by leveling off the peaks and valleys of individual channels. And they often make it easier to justify automation. But omnichannel transformations are often complex, multi-year projects.
Are you ready to make the move to shared inventory across all your channels? Do you know what you need to do to prepare your organization for omnichannel transformation? Do your people have the skills they need to operate a true omnichannel DC?
The business requirements to support omnichannel are continuing to evolve around changing customer expectations, with channel owners bringing conflicting needs to Distribution and Supply Chain executives, whose job is to try to find balance. eCommerce demands speed and accuracy in an environment that is subject to frequent changes in promotions and daily fluctuations in volume. Wholesale wants the ability to each pick every SKU and postpone allocations until the last minute, with multiple launches spiking volume throughout the year and unique VAS requirements for each customer. Retail wants smaller, more frequent deliveries to stores with store-ready merchandise, labeled and sequenced for easier putaway. All of which makes for a very complex operating environment.
This level of disruptive change requires alignment of stakeholders at unprecedented levels; multi-year capital investments in systems, store operations and material handling equipment; and the need for flexibility to adjust to an uncertain future. That’s a tall order for most companies. But how do you decide where to invest and how to prioritize initiatives? The path you take depends largely on where you’ve come from and where you need to be based on your customers’ expectations and your business strategy.
You need an omnichannel fulfillment roadmap that identifies and prioritizes the steps to achieve your goals. No two companies follow the exact same path for omnichannel transformation. You’ll need a thoughtfully-developed roadmap to determine your unique path and prioritize steps to get you to your goal. Consideration must be given to dependencies, linkages and stakeholder involvement to ensure the proper support and resources are in place from start to finish. Beginning with the customer experience you’ll need to re-design your fulfillment operations so that the seams are invisible. This could mean shared inventories, shared operations, complete inventory visibility, complex and dynamic rules for delivering at the highest profitability and fastest speed, and common KPIs across the organization. That kind of alignment can be challenging and costly.
Omnichannel transformation comes with a unique set of challenges and complexities, but there is substantial value to justify investments based on increased revenue, reduced costs, service level improvements and growth enablement. At the same time it encourages broader thinking about the business, helps to align and improve communications between the business and supply chain teams, and creates open ground for creativity, experimentation and innovation. And the resulting operation provides flexibility to handle future business changes and positions an organization to make distribution a competitive advantage.
Omnichannel transformation will be a key focus at Omnichannel Fulfillment & Logistics 2016, June 20-22, 2016 in Atlanta.