Omni-Channel Retailers Supply Chain Survival Plan

January 19, 2017

Omni-Channel Retailers Supply Chain Survival PlanIt’s an omni-channel world out there. Mobile and e-commerce customers expect to receive the same experience and service regardless of where or how they shop. Of course, customers do differ from store to store, and online desktop shoppers can be different from mobile app shoppers. Many customers regularly cross channels between in-store, online and catalogues. Omni-channel retailers must be able to leverage their inventory and supply chain visibility more intelligently, or risk being swamped by these “new world orders.” (see Retail TouchPoints white paper: Develop an Omni-Channel Competitive Advantage)

Given that many existing planning systems were developed and installed in the 1990s, optimizing planning decisions means evolving your people, processes and technology toward a new level of cooperation and flexibility. It’s time to overhaul your planning, allocation and replenishment activities. Time to balance product and store plans. Run “what-if” scenarios. Create demand-driven assortments. Use virtual warehousing to maximize stock availability. Invest in merchandise to cost-effectively serve all channels.

In the podcast, Retail Planning in an Omni-Channel World, we discuss in-depth each of the following “to dos” of omni-channel-driven changes that need to happen:

  1. Break down channel silos. Don’t let org chart structures interfere with optimizing inventory and delivering optimum customer service. You need visibility to sense changes across all channels of operation—online, mobile, in-store, catalog—and automate your response processes for planning, allocating and replenishing across channels. Remember, your biggest store is probably now a shipping center.
  2. Get rid of planning spreadsheets with minimal effort before they cause total disaster for your business. Spreadsheets struggle to handle the amount of detailed information you need to manage (see white paper: Are Spreadsheets Sabotaging Your Supply Chain?). Research shows they are most likely riddled with errors. And, there’s no seamless way to collaborate or optimize your processes using spreadsheets.
  3. Use the demand signal to dictate your assortment plan. This ensures the best possible fit with real-world conditions in the omni-channel universe. The best guide for creating optimal assortments is historical sales data, when it is combined with human expertise.
  4. Balance your product and store plans for the omni-channel business environment. Create demand-based assortments across all your channels and be able to quickly adapt your strategies in mid-season as necessary. Running “what-if” scenarios is an excellent way to prepare for the unexpected, and explore the impacts of promotions, changes in your sourcing options, and many other factors.
  5. Plan and optimize one universal pool of aggregated inventory for more granular and automatic replenishment. To provide each store and channel with the right inventory at precisely the right time, you need to consider all factors affecting demand, and have the ability to update store-level sales projections weekly, instead of stopping at the cluster level. To reserve stock for locations with limited physical storage capacity, automate the management of virtual warehouses within the DCs, creating dedicated blocks of inventory that act like store-based backroom stock for a while, then automatically frees up after a pre-set date to be immediately available for other channels and locations.
To check off the boxes on this to-do list you need a retail optimization technology that can bring a new level of automation and scope to your planning, allocation and replenishment tasks. The best system will encompass all channels, make each clearly visible, and help drive maximum service levels everywhere.

Tags: Retail Supply Chain

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