5 Steps for Designing Fulfillment Operations for Omnichannel
Designing fulfillment operations for omnichannel supply chains and shipping strategies should not be an afterthought for supply chain executives. There are several challenges when companies are looking to implement an omnichannel supply chain. What works for today’s non-omnichannel supply chain is not necessarily indicative of the needs of the omnichannel supply chain of tomorrow. Consumers are in a constant state of flux, moving from one retailer to another, following the lowest prices and best shopping experience. As a result, retailers need to take extra care and consideration in designing fulfillment operations for omnichannel supply chains, says Fortna.
1. Assess Similarities Across All Channels
As with any implementation of a new business strategy, your supply chain cannot prepare and design fulfillment operations for omnichannel without understanding the current status of your fulfillment operations. In other words, take a step back and objectively evaluate and assess ongoing operations, especially noting any similarities across current channels. An assessment will help pinpoint which channels can work closely together to reduce cycle times and increase production value, while still meeting the increasing demands of consumers. In fact, the omnichannel market is expected to grow 10% more than in-store sales by 2019, reports an EY Survey. Paired with consumers spending twice as much when shopping in an omnichannel environment, it becomes increasingly important to identify ways to simplify operations.
2. Fine Tune Operating Methods
Supply chain leaders should fine-tune operating methods too. Fine tuning operating methods includes selecting the right type of slotting method, such as dynamic versus fixed slotting optimization procedures. Labor management is another opportunity for improvement, and even if your company implements a new system, it lacks value if staff members do not understand how to use it. It may be necessary to conduct additional training with staff members to increase adoption rates and ensure maximum benefit from the new system.
3. Choose the Right Technologies and Processes That Enhance Omnichannel Operations
In addition to having the right operating methodology, your company should consider if you have the right technology in place. The right technology, such as a warehouse management system (WMS) and automated order processes, can mean the difference between successful and subpar omnichannel operations. Technologies should enable operating methods that benefit your company as a whole, such as SKU-specific location limitations and empty-stock validation. Technology that amplifies and creates efficiency around your operating methods leverages multiple distribution assets to fulfill more orders and meet consumers’ demands, explains Llamasoft. As an example, a quality WMS may trigger a cycle count request to inventory personnel during certain picking or putaway processes.
4. Dedicate SKU-Specific Locations to Maximize Space
When using static slotting optimization procedures, it is essential to re-evaluate the benefits of SKU-specific locations and dynamic pick assignments to maximize space. Dedicated SKU-specific positions help prevent understocking and overstocking of products, thus, reducing inventory carrying costs. SKU-specific locations let you automatically identify other pick locations to use after picking the remaining product at a given location, and the system should denote the new location as empty and ready for receiving inbound freight.
5. Model. Test. Refine.
The best fulfillment operations for omnichannel supply chains must grow and evolve with time. As explained by DC Velocity, it is best to re-evaluate your omnichannel fulfillment strategy frequently. If you implement new technology, model and test it thoroughly and refine the process moving forward.
Use These Steps as a Guide to Create and Maintain Your Omnichannel Supply Chain.
There is no one-size-fits-all approach to creating and maintaining an omnichannel supply chain. However, your company will get on the right track with these five steps. In addition, consider partnering with a third-party supply chain systems integrator (SCSI), like Veridian, to ensure your design meets the needs of a truly seamless, omnichannel supply chain. Outsourced implementation of technology utilized in omnichannel operations and design can give you the outside-looking-in view you need to cut costs and boost production value.