Omnichannel and the new supply chain paradigm
Meeting the demands of omnichannel fulfillment poses a definite challenge to retailers’ existing supply chains. Traditionally, retailers have used separate distribution facilities to meet the needs of different sales channels. According to a recent article in the Journal of Commerce, omnichannel has created a new supply chain paradigm that will “dominate omnicommerce, and eventually nearly all businesses.
In the new supply chain paradigm:
–supply chains are segmented by channel and defined by process
–supply chains are measured by performance and service and focus on customers
–supply chains have fewer organization silos, both internal and external
–supply chains outsource activities based on performance bids with costs for services
–supply chains have increased inventory turns, accuracy and on-time performance and consistency
–supply chains create competitive differentiation and utilize integrated supply chain execution technology
–supply chains engage only best-in-service 3PLs and logistics service providers.
Inventory positioning; network redesign, total supply chain visibility; reduced redundancy; coordination of inter-related global activities; inventory velocity; and new approaches to traditional thinking are needed for the speed to market that omnichannel promises.
The challenge for retailers is how to transform their supply chains into the omnichannel model. To do so successfully requires a considerable investment in automated material handling systems. A recent white paper titled Designing an Automated, Omni-Channel Fulfillment Center: Key Considerations for Multi-Channel Retailers addresses some of the areas retailers should consider when evaluating such a project.
Click here to download the paper.