Home' MHD Supply Chain Solutions : MHD Mar-Apl 2016 Contents ordering multiple sizes, in addition to normal
reasons for returns. There are trends towards free
returns as a compelling enabler (and sometimes
differentiator) as customers expect a quick turn-
around and resolution of any issues. Real-time
inventory visibility and rapid processing are
essential to ensure that stock is quickly processed
and returned to the supply chain.
Order processing speed. As next-day or
even same-day delivery becomes the norm,
customers expect a rapid turn-around for all of
their orders. Ever-shrinking cut-off times only
increase the need for orders to be processed
quickly. Competition is fierce. Companies must
ensure that inventory is available and controlled
across their entire supply chain.
Order processing accuracy. Customers also
expect their orders to be correct. Even a single
wrong direct shipment can cause customers
to never order from that company again.
And social media can compound that wrong
shipment into multiple customers. It is critical
for order accuracy to be addressed in omni-
channel supply chains.
Available network. Even with the best
of intentions and planning, companies are
potentially limited by their existing infrastructure
and geography. The location of DC and stores
factor heavily into meeting regional, national
and global consumer demands, not to mention
beating the competition.
Inventory visibility. To meet customer
expectations, companies must know where
inventory is in their supply chain and be
confident the count is accurate.
Given these challenges, it is important first
to define what customers want. What’s their
situational experience — in store, on a mobile
device, at home, etc.? What should their overall
experience be? What should be their impression
of the company? What protects and reinforces
the company’s brand image?
Finding the answers to these questions
provides a goal to prepare for the next step:
accounting for your inventory.
In an omni-channel world, to meet the anytime/
anywhere shopping demands, companies abso-
lutely need full control of their inventory. The
tenuous loyalty of a target demographic can
rest on providing an accurate account of the
stocking status of product they desire.
After consumers make a purchasing decision,
there are the complex calculations necessary
to determine the most cost-effective method of
delivering a specific item to store, home, office or
other location. This is well beyond the capabilities
of any manual or per-location system. It requires
strategic intelligence backed up by enterprise
software applications and support hardware.
To retailers and wholesalers, this means
an enterprise resource planning (ERP) or
distributed order management (DOM) system as
the central processing brain for order fulfilment.
Central processing with strategic intelligence
enables retailers and wholesalers to measure
not only inventory, but also the performance of
Data from stores can be used to leverage
existing information to plan orders, shipments
and fulfilment activities. Real-time data,
analytics and reports provide the information
flow necessary for inventory visibility.
As an example, a customer orders a shirt on
a mobile device for pick-up at a local store. It is
the ERP or DOM that knows that particular SKU
is not in stock at the local store, but available at
a DC or two other stores, and will determine the
optimal way to deliver it.
But even after customer expectations are
defined and system inventory logistics are
accounted for, the omni-channel puzzle is still
not solved. There is still one more vital step,
which is addressed in the next section.
Strategies for filling orders
The last (sometimes forgotten but certainly
important) step to a successful omni-channel
order fulfilment system is actually fulfilling the
orders. It sounds obvious, but it is no small
consideration. Again, with a goal as aggressive
as meeting every customer’s shopping whim,
modern, automated systems for order fulfilment
are not an option – they are a critical component.
Automated order fulfilment systems include
the software and controls to receive, store, pick,
put, and ship products with absolute efficiency.
It is the technology that brings the system to life
and maintains the throughput.
In this example, after the ERP or DOM
determines that the DC is the best source
for filling this order, it is the automated order
fulfilment system that picks the shirt, packs
it, and ships it to the local store where the
customer collects it.
The next section provides general designs for
automated order fulfilment.
“From the retailer’s point of view, omni-channel is
much more complex. It means implementing a system
that produces a consistently positive experience for
shoppers and buyers.”
Batch pick to trolley.
MHD SUPPLY CHAIN SOLUTIONS — MARCH / APRIL 2016
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