Omnichannel Fulfillment: Transforming Supply Chain Management

Omnichannel fulfillment relies on technology for speed & visibility

Omnichannel retail is an integrated approach that makes sure that consumers have a consistent, unified experience across both online and offline channels. To consumers, the customer experience is paramount.  Whether the consumer shops online, in a brick and mortar store location, on a phone or via other means, the experience should be seamless.  Comprised of individual customer touchpoints via numerous channels that are interconnected, the omnichannel customer experience is one that enables consumers to pick up where they left off on one channel and continue their shopping experience on another channel.

Ideally, omnichannel retailers have a physical and digital presence that allows in store visitors to see goods on mobile devices, purchase online and ship their orders to store, have purchases made in stores shipped to their homes and more.  Omnichannel retail is a more complex model and relies on technology to meet the expectations of an optimal customer experience.

 

What is Omnichannel Fulfillment?

Today consumers can order from anywhere, anytime using any type of device including at stores, online, using  mobile devices, kiosks and through call centers. In our technology-rich world, consumers can research, compare pricing and shop for products online, make purchases and select delivery or pick up options to meet their needs.

The complete process from the time that the consumer orders until the time that the order is delivered to the end-user is the process of omnichannel fulfillment.  The process of omnichannel order fulfillment includes how the order reaches the end user and includes the warehousing, packaging and delivery process.  In omnichannel fulfillment, the entire process is synchronized so that the data channels are made seamless.

The primary elements of the omnichannel order fulfillment process are:

  • The handling and storage of inventory within the warehouse environment
  • Order processing and order management
  • Packaging and shipping of goods to fulfill orders
  • Delivery to the destination (retail store, parcel locker, consumer home, etc.)
  • Return or exchange of goods

Often throughout most of the process following an order, there is communication with customer service representatives or via automated updates or messages regarding order processing, backorders and delivery.  This aids in providing consumers with the continual level of care that customers tend to value and associate positively with brands and retailers.

 

The Rise of Omnichannel Order Fulfillment

Over the past year or so, many retailers have been experimenting with the mix of brick and mortar retail and e-commerce online shopping.  Online retailers such as Amazon, Bonobos, Fabletics, Aesop and Blue Nile have opened brick and mortar stores in the U.S.  Having physical retail store locations helps brands to interact directly with consumers and provide a more satisfying, retail brand experience.  It also helps to encourage new purchases or exchanges when returns are made, offsetting the cost of the return so that revenue can be re-captured.

Omnichannel fulfillment operates with high volumes of individual orders.  This can make inventory management more complicated.  Critical for consumers is the ability to have real time, accurate access to inventory availability.  After all, out-of-stocks and backorders are frustrating for consumers and lead to diminished sales and brand loyalty.

The omnichannel order fulfillment model is designed to help ensure customer satisfaction and to provide the means for a smooth ordering and payment collection process, minimizing process time and engagement with customer service representatives.

To meet consumer expectations, a variety of delivery and fulfillment methods need to be available.

Here are some of the most common omnichannel fulfillment and delivery strategies:

  • Click and Collect (order online then pick up in store)
  • Buy online, have order drop shipped to customer
  • Purchase in store for home delivery
  • Ship to home from store
  • Ship from store for home delivery
  • Purchase online, return to store
  • Buy online for same day/on demand delivery

Technology is the Key to Omnichannel Fulfillment

 

Home Delivery:  A Key Element of Omnichannel Order Fulfillment

Beyond the use of transportation management software, to compete with companies like Amazon requires additional technology such as routing software that is integrated to an e-commerce platform, shipping management solutions that enable transportation rate shopping and a robust warehouse management system (WMS). 

 

 

Warehouse Management Software for Omnichannel Order Fulfillment

Did you know that the shift to omnichannel retail which started with the development and popularity of e-commerce is the most significant supply chain management trend of the last decade?  This has fueled interest and development in information technologies to increase visibility across the supply chain as well as to improve the speed and accuracy of order fulfillment and minimize supply chain costs.

Omnichannel order fulfillment is growing at a healthy pace and is expected to reach $3.7 billion by 2020.

Select Warehouse Management Software to Meet Omnichannel Fulfillment Challenges

 

Order Picking:

Rather than relying on wave picking, in which orders are released in batches, today’s omnichannel fulfillment warehouse often uses order streaming.  This means that the warehouse management system slowly releases pick tickets during the day to maximize the use of labor resources.  By using the WMS order streaming capabilities, the necessity to rush and pick during peak times is reduced, enabling more accurate order picking operations.

Enterprise-Wide Visibility:

Having a warehouse management system that enables visibility, connectivity and control to all departments is essential in fulfillment operations.  This helps to improve operational speed and efficiency and keep errors to a minimum.  Having enterprise-level capabilities typically reduces the incidence of incomplete and inaccurate orders and improves order fulfillment rates overall.

 

Mobility:

Another must for WMS used in omnichannel fulfillment operations is mobility, the ability to work with mobile computers, RF, RFID and mobile printers.  Mobility=speed in today’s warehouse.  This eliminates warehouse workers being tied to a desk or warehouse location and enables team members and managers to work together on the warehouse floor as well as in and out of the facility.  Having the ability to handle real-time data capture and use data in a variety of reports and dashboards is essential in increasing the speed of operations and decision making.

Deploying a WMS that is mobile-friendly helps to expedite receiving, sortation of goods and can noticeably improve inventory management accuracy.  Here are a few examples:

  • Using  barcode label printer at the receiving dock can be a time saver.  If goods arrive with damaged or unreadable barcodes, a warehouse worker can easily print and position a new label on the inventory.
  • Utilizing mobile computers at the receiving dock enables real time data capture of barcodes, RFID tags and RMA labels on incoming cartons.  As data is transmitted seamlessly to the warehouse management software, real time updates are enabled and data entry and errors are reduced.
  • Relying on a vehicle-mounted mobile computer provides the operator with immediate, accurate information that is fast and easy to access.  This eliminates unnecessary transit time, trips and calls, disrupting other workers.
  • Working with a mobile computer, warehouse workers scan the barcode on the carton then the shelf barcode to ensure that they match.  The scan transmits data to the backend system so that precise information on the location is readily accessible, making picking faster.

Inventory Management

 

Managing Product Velocity, Seasonal Inventory Demand and Changing Product Demand

Whether it is seasonal changes, holidays, fast fashion trending goods or a spike in orders, the warehouse management software for any omnichannel fulfillment warehouse must be flexible enough to handle the peaks and valleys of orders.  An advanced WMS should be able to handle inventory slotting, taking into consideration slot and product characteristics, real time data, cycle time, SKU velocity and other factors.  Slotting is a process that requires planning and due consideration to avoid increased risk, unnecessary cost and errors in your business.

 

Cartonization

Today, warehouses are processing larger numbers of individual orders, impacting shipping costs.   To help keep shipping and freight costs under control, 3PL and warehouse operators are turning to cartonization to help optimize box selection, shop for shipping carriers, optimize packaging materials and more.

Order Management

The WMS or order management system needs to have real time access to the availability of inventory at all locations from which goods will be considered available to process orders.  This may include retail stores, distribution centers, manufacturers and third party warehouses.  Out-of-stock goods and backorders must be clearly identified, tracked with easy to access information about availability, quantities and detailed information regarding the goods.

Conclusion:

Omnichannel retail is one of the most transformative changes in the supply chain industry in the past decade.  The complex nature and fast pace of operations and high volume order processing necessitates use of technologies including routing software, shipping management solutions and warehouse management systems.

About the Author:

Laura Olson

Director of Sales and Marketing, Datex

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