Visibility is a top struggle with big implications
The need to have visibility over warehouse and order management operations is often one of the biggest issues facing growing ecommerce companies, retailers and 3PL businesses. While the focus of the growth has been front end sales, the capabilities of the fulfilment operation lags. These businesses are often unaware of how busy their staff are, their picking accuracy rates, and the financial impact of not having the full picture.
By the time they realise that a customer was sent the wrong item in the wrong size, for example, it is too late. These are valid concerns, but a lack of visibility also leads to more far-reaching strategic business problems.
No centralised view of enterprise data and reporting
Few organisations operate wall-to-wall warehouse and order management systems that can deliver a single, consolidated view of inventory across the enterprise. They typically do not have business-wide reporting suites or data lakes in place, either. Many lack a mature IT infrastructure and, therefore, will struggle to access the right data – especially in real time. That’s a big problem in the dynamic world of ecommerce.
For example, when a customer places an order, the staff must check multiple systems and walk the floor to decide where to pull from the available inventory, along with how to optimally pack and ship it. This can involve many phone calls, emails, and ad-hoc conversations with the warehouse manager. This tribal knowledge worked fine for years. Now, the complexities are greater. Customers expect much more, and the stakes are much higher – including slow, late, or incorrect (or missed) shipments; sales loss; poor customer experiences; higher logistics costs and profit erosion.
Businesses know that reversing this requires instant insights on how to source and fulfil every order better, but their ability to collect and record the pertinent data from multiple sources is beyond unwieldy.
A “single view” in ERP – nice in theory.
Strides have been made toward integrating inventory fulfilment in an Enterprise Resource Planning (ERP) system, which promises a “single view”. The ERP does, in fact, pull data from a variety of sources into one environment. The intent is to support rapid decisions; however, these technologies were built in a different era, for a different purpose.
While excellent for accounting tasks, these massive, “all-in-one” product suites were developed to give a “single view” of the enterprise at a time when supply chains were linear. Today, the time, expense, and complexity of an ERP system integration is a tough challenge when – let’s say – companies need to merge, launch a direct-to-consumer (DTC) channel, add products, or integrate a new supply chain partner.
Too much is at risk to rely on custom IT projects and workarounds to get these new functionalities in place.
The reality: inventory “tracking” is no longer enough.
In addition, inventory fulfilment in legacy systems is limited to inventory tracking, rather than true visibility, automation and optimisation. Struggling to staff their warehouses in today’s complex, high-volume ecommerce playing field, organisations do not need numbers; they need system directives driven by real-time data that is reliable.
When organisations fail to put these technologies in place, what’s the impact? Ultimately, poor visibility means lag and decisions based on potentially out-of-date data points. To guard against supply chain shifts, many firms will hold additional just-in-case inventory. Not only is that costly, but the lag in data increases the business risk of double-selling. Let’s look at an example here:
Inventory is available; the business sells it to Customer A. A short time later, Customer B turns up through a different channel and in a different data environment. The business then sells the same product again to Customer B, unaware that it is already committed. The business now needs to either: (1) source that inventory from elsewhere or (2) risk failure to deliver on its customer promise.
More generally, supply chains are being forced to move to a more risk-focused strategy, holding additional inventory due to the frequent and diverse interruptions we are all experiencing.
The rise of supply chain fulfilment platforms
As the number of different supply chain platforms, formats, geographies, partners and systems increase, smart organisations have opted for an execution platform that can pull data from multiple systems into a single, unified order management environment. One that allows them to refresh data, get intelligent recommendations, and make decisions that continually improve visibility and the profit equation.
Tying it all together
Modern supply chain fulfilment platforms take a tremendous burden off warehouse management teams by removing operational bottlenecks between traditionally siloed systems for inventory management, forecasting and replenishment.
Having the full inventory picture connects and simplifies these workflows, streamlining how products get sourced, fulfilled, received, shipped, tracked, and replenished. Supply chain fulfilment platforms use algorithmic strategies to assist companies when they feel they have tapped out on growth. Best of breed platforms are built to fuel long-term growth, always highlighting that next opportunity to:
- Remove operational roadblocks and extend labour investments
- Reduce fulfilment times
- Slash human errors
- Fill more orders with leaner inventory
- Manage new products and suppliers effortlessly
- Upgrade technology to reduce the risk of rapid change
Made for order management and DOM
In addition, a modern supply chain fulfilment platform incorporates a quick path to Order Management and DOM (Distributed Order Management) solutions – extending a company’s multichannel and omnichannel fulfilment capabilities when the timing is right. Not on the vendor’s terms and not at a huge, surprise expense.
How OMS and DOM solutions work
OMS solutions bring advanced capabilities, such as automatic order routing, drop shipping, and intelligent inventory management by channel, to optimise order sourcing and fulfilment based on real-time inventory, wherever it is.
Distributed Order Management (DOM) moves the game forward with network-level modelling and optimisation. DOM starts with receiving an order from any channel. The platform directs where to best satisfy that demand – whether from a store, marketplace, a franchise partner, a 3PL carrier or the business’s own warehouse. Staff can see detailed analysis around multiple physical and financial strategies, looking at optimal approaches in a range of scenarios, including risk and macro-level event impacts.
These solutions work seamlessly with modern-architected warehouse management systems (WMS), in addition to integrating with homegrown and other providers’ WMS solutions. Foundationally, that requires having a reliable inventory view across warehouses, all possible locations and types of stocking points. All in one scalable solution.
The final piece of the jigsaw
A consolidated view of stock and warehouse management is critically important, of course, but organisations also need to know how they can execute on the demand for their products. A modern supply chain fulfilment partner delivers fulfilment excellence in complex selling models, along with guidance to keep the business growing smarter.
For a business to be competitive and efficient in the now real-time world of retail and ecommerce, a sophisticated set of capabilities are required that were once accessible only to the big-spending IT landscapes. The good news is that those capabilities are available and affordable to a much wider range of businesses in the space.