The Top 5 Omnichannel Supply Chain Challenges for Businesses
Thanks to an increase in channel-agnostic consumers and mounting pressure by constantly-adapting Amazon, many companies are moving towards omnichannel supply chain strategies to benefit their customers. However, implementing an omnichannel supply chain takes an approach adopted by leadership and a cohesive implementation plan executed precisely. Companies looking to go omnichannel with their supply chain face many challenges. Businesses that take the time to understand omnichannel supply chain challenges can refine their implementation strategies to overcome issues and excel in the omnichannel space.
Lack of Inventory Visibility Is Among Top Omnichannel Supply Chain Challenges
Omnichannel supply chains are supposed to bridge the divide between online and brick-and-mortar stores. Although the experience may seem like a frictionless transition from one channel to another for consumers, it represents thousands of changes to inventory management, order processing and standard operations. This steady movement of inventory between channels leads to visibility issues, reports Patrick Burnson of Logistics Management. However, supply chain leaders can overcome this challenge by implementing omnichannel supply chain systems and technologies. An example would be a warehouse management system integrated into an ERP which interfaces with a transportation management system connected to an e-commerce platform. Further, those executing omnichannel well today are implementing automated identification and data capture (AIDC) or radio frequency identification (RFID) sensors to overcome the visibility challenge.
Long Cycle Time to Ship Products Increases Risk for Inaccurate Orders
The omnichannel supply chain also faces a challenge with cycle time. Warehouse managers need to decrease cycle time to ship products as fast as possible. In the omnichannel supply chain environment, consumers can purchase items via an app, online, or brick-and-mortar store, expecting to receive the product within two days, if not the same day. This is commonly referred to as, “The Amazon Effect,” and it exists throughout the omnichannel supply chain, asserts Cindy Elliott of Esri. To meet the demand and expectations of the consumer created by the Amazon Effect, warehouse managers and supply chain executives will focus on creating standard processes that are then enhanced through automation to increase processing, picking, and packaging efficiency.
Lack of Value-Added Services Exist
As explained by Chris Davis of Logistics Viewpoints, value-added services are those provided by third parties or vendors which add an extra level of finesse to order management. Examples include automating labeling, improving carton allocation and packing, and ensuring proper shipping and invoice generation. These services serve to cut costs, improve cycle times and enhance omnichannel processes across multiple distribution centers and shipping-enabled retail stores. Other value-added services may involve predictive customer analytics to increase product throughput and target web marketing campaigns. These functions create a faster, seamless shopping experience.
Limited Sites and Inconsistent Processes Increase Risk
Omnichannel supply chain strategies face an uphill battle when sourcing all activities in a single building. The fact that omnichannel shopping gives customers the ability to order product from numerous channels does not mean that a single distribution center will service all of those orders. The omnichannel supply chain should operate from multiple distribution centers and retail stores for a common purpose of order fulfillment from any channel.
For example, an omnichannel supply chain should identify the nearest product inventory to a consumer, initiate label printing, picking and packaging, as well as ship the product via the consumers’ preferred method of delivery or pickup.
Distribution center managers should also implement standard processes across the omnichannel supply chain. Those DCs that follow a defined set of procedures reduce the risk of error and improve cycle time.
Single Channel Returns Management Requires More Work
Comparable to standardized processes and multi-site distribution centers, returns management in an omnichannel supply chain must be cross-channel. In other words, consumers purchasing an item online should have the option of returning it at the store or by shipping it to a returns facility. Thus, omnichannel supply chain retailers may implement on-demand, at-home label printing for consumers or include a return label in the original packaging. In providing multiple ways to return product, companies create a seamless experience between their website, app, and brick-and-mortar locations. Failure in any part of the returns management chain within the omnichannel supply chain may lead to the loss of customers.
Leverage the Experience of Third Parties to Avoid These Challenges
Figuring out the best way to implement and maintain an omnichannel supply chain strategy is not always clearly defined. If your organization would like to simplify the process and avoid or overcome omnichannel supply chain challenges, partner with an experienced third party, such as a supply chain systems integrator (SCSI). Veridian can help develop, plan, implement, and maintain your omnichannel supply chain. To learn more, contact Veridian today.