Three Steps to Overcome Omni-Channel Challenges Amidst Supply Chain Disruption
This is an article co-authored by Terence Leung, Senior Director of Product Marketing for Supply Chain Execution, and Nina Seth, Director of Product Marketing for Commerce for Blue Yonder
Two years into the COVID-19 pandemic, shoppers (at least in the U.S.) feel more comfortable walking into stores for in-person shopping. Consumers are once again shopping how they want to shop – both online and in stores.
“Shopping has become a big blur,” according to Barbara Kahn, a marketing professor at the University of Pennsylvania’s Wharton School. “It’s no longer about one or the other.”
Speed and convenience enablement such as curbside pickup, ship to store, and two-day delivery are becoming table stakes. Delivering stellar omni-channel experiences requires retailers to do more than simply state on their website and ads that they offer buy online pickup in store (BOPIS) or same-day delivery. It requires strategic placement of inventory, order optimization, and seamless omni-channel orchestration and fulfillment from the first-mile through to the last-mile delivery.
Commerce is King
Given that customer expectations have changed, retailers need supply chain technologies that enable them to not only deliver capabilities that meet customer demands but do it well. What does this mean? In a world where online orders are fulfilled in stores and shoppers scan retail shelves before buying online, retailers need to ensure that they understand how much inventory is available and where. Order management, fulfillment and delivery systems need to seamlessly and accurately provide the most updated inventory and delivery information. For example, it’s not enough to have inventory for the shopper walking in, but now there needs to be inventory to fulfill online orders.
Retailers need intelligence to help them understand trends. They need a single order management solution that tracks orders regardless of how they are placed and how they are fulfilled. Siloed systems that track store and online orders separately lead to poor customer experiences. They need solutions that enable them to see inventory availability across the network, so shoppers understand what’s available near them and how the product can be fulfilled.
Due to the influence of leading retailers such as Amazon, Target and Walmart, others have been hard pressed to offer more omni-channel fulfillment options such as BOPIS, curbside pickup, and same-day delivery with speed and operational efficiency. Furthermore, with changing expectations, today’s retailers have shortened fulfillment windows to get orders to customers – gone are the days of delivering orders in five to seven business days. Customers today demand in-store pick-up in two hours and same-day delivery and expect accurate and reliable fulfillment. Inaccurate fulfillment windows or long wait times for curbside and BOPIS lead to customer churn.
Digital Warehouse and Labor Management
To enable faster omni-channel fulfillment, retailers, manufacturers, and 3PLs are actively (and even frantically) improving physical and operational logistics footprint and the supporting processes and systems. A large percentage of distribution centers being built are micro-fulfillment centers and front-end distribution centers. In the network of distribution centers, whether complex or simple, operations is handling smaller omni-channel orders. They are adopting robots and co-bots to supplement warehouse labor. They need better network visibility to handle with disruptions.
Going digital in the warehouse and the distribution network is an irreversible trend. Warehousing and transportation are significant cost centers. In additional to service-related performance, improving cost to serve, throughput, and profitability there are additional motivations to accelerate the digital journey. The new logistics solutions should include warehouse management and need to provide:
- The means to better resource assignments for human labor and robots/co-bots.
- Seamless integration with automation and robotics systems.
- Extensive order and network inventory visibility, delivery status, and the means to handle disruptions and returns.
- Real-time decision making for unified warehouse and transportation processes and exception handling.
The warehouse has grown in strategic importance but, at the same time, it has been challenged by extreme global labor shortages and high turnover — with no apparent end in sight. It is imperative that warehouse operations make the greatest possible use of limited labor resources to deliver high service and drive financial outcomes. The Blue Yonder labor solution provides a real-time, granular view of workforce performance, providing a basis for coaching and continuous improvement.
Digital Transportation Management
New consumer realities have changed the priority businesses put on transportation management, especially since it is delivery speed not loyalty to the business’s partners that matters most. Immediate availability outweighs product range especially in the last mile. “Delivery on my terms” is an expectation from the end consumer. As a result, shippers and logistic service providers must make their transportation network more:
- Visible and transparent, even outside their own walls.
- Predictive when inevitable disruptions occur.
- Autonomous, for significant speed and cost savings.
- Responsive to changing real-time conditions especially for the compressed fulfillment window.
A digital transportation management solution provides intelligent orchestration of a wide range of shipping assets, nodes and network designs. This solution helps businesses reimagine the shipping network with a flexible multi-modal delivery model across the traditional supply chain network with expanded carrier connectivity. Businesses can continually identify the most efficient and lowest-cost network to satisfy their needs.
Digital solutions allow the entire transportation network to course-correct in real time, updating network-wide plans to provide better business outcomes. With integrated transportation planning and execution, logistics operations can benefit from:
- End-to-end exception visualization, prioritization and autonomous resolution.
- Dynamic re-planning, based on real-time changes in order, shipment and inventory status.
- Unified inbound and outbound logistics.
- Seamless access to the extended carrier and supplier network.
The digital solutions are delivered in an easy-to-consume cloud delivery model that supports a rapid implementation – and an accelerated return on investment.
The world has changed dramatically and that has certainly affected how businesses operate. From the need to deliver unified commerce experiences across channels, optimize logistics, rapidly deliver orders, and handle exceptions and disruptions, organizations today need to design their digital system footprint according to the requirements of the new era.