Omni channels and intelligent order fulfilment

Hitesh Batra
Dec 22, 2018 · 5 min read

With Black Friday and Cyber Monday behind us, trade pundits are out with their analysis of what clicked and what could have been done better. While these contain a lot of different insights, one point on which most are willing to agree is the role that synergies between offline and online presence of different brands played in their success. Indeed, as Forrester puts it in its Nov 2018 report, ‘’Black Friday deals are evolving with omni channel — the top Retail technology investment in 2018, and retailers are finally starting to see ROI in their omni channel initiatives, and many are leveraging omni channel fulfilment as part of their Black Friday strategy’’.

Data about the number of shoppers, both in person and on online stores, reached 89.7 million for the two days — marking a significant 40% surge from last year. Retail data also confirms that more than 54% of shoppers purchased items on multiple channels between Black Friday and Cyber Monday. Glaring though the humongous increase in number of shoppers is, it wouldn’t be wrong to say that the real winner in the shopping season was the omni channel experience. Clearly the multimillion dollar investment in supply chains to develop an integrated omni channel experience paid off well for the select brands like Walmart, Target, Wayfare, Amazon, Macy’s, Ulta beauty and others that made most of the major gains.

While the Thanksgiving week is all about major retailers kicking off the season with big discounts and seamless shopping experience for the customer, even otherwise the rising power of millennials and their heavy reliance on mobiles, is leading to a sea change in the purchasing trends. Key retailers are using technologies to enhance the store experience and bring both the physical and digital worlds into one omni channel experience. Let us look at some key strategies implemented by key retailers to align the shopping experience across both online and offline platform.

  1. Free Shipping — Instead of fast, free is a bigger buzzword among customers.
  2. Buy Online, Pick up in Store (BOPIS) — Customers pick up their product from the store which is an opportunity to add complementary products to the cart.
  3. Discounted Pick up in Store — Again, customers come to pick up their product from the store after buying online. It gets them a discount and higher engagement opportunity to the brand.
  4. Option for reverse logistics — Higher customer convenience through optional store drop or courier pick up for purchases from any channel.

While Omni channel is a very significant direction from the customer experience perspective for Retail, it is equally important for other industries including B2B. Enterprise product companies are reporting an increasing trend of business buyers placing orders online typically for office maintenance, stationery as well as product packaging requirements. The power of the Net and mobile is pulling in decision makers and creating an environment in which the online lives and offline experiences are merging.

Key challenges for omni channel logistics — Visibility

Adjusting to this new inter-connected world can be challenging for brands. In Retail space, for example, research depicts that only 12% of retailers offer the experience of mature omni channel that customer demand. Clearly, most businesses are a long way from achieving the omni channel expertise.

What really is the biggest challenge facing businesses trying to take advantage of the experience being demanded? It is the amount of coordination and synergies required between departments since seamlessly delivering the experience taps practically into every department in the venture.

Let us dig deeper into the requirement.

Having a clear idea about the inventory lying at every point of the supply chain — be it stationary or mobile, the ageing of the stocks and the costs involved, are required for bringing in coordination between various functions involved. It is not an easy task considering the complexity of the matrix of goods available at numerous offline stock points — stores, warehouses, central depots, in transit goods — as well as own online site and numerous 3rd party online sites.

We can consider here a scenario requiring inventory and optimum lead time management due to fluctuating or even seasonal demand. Specially events like festival seasons have additional layers of challenges due to stock requirements coinciding with an ongoing market promotion, geographical variations or simply a requirement for smarter stock management to avoid sales losses for the newer models invariably launched during festival times.

Key challenges for omni channel logistics — Predictability

With multiple variables at play which could be highly unpredictable, running an efficient omni channel supply chain is no less than pulling off an Indian rope trick.

A requirement may be seen as sudden if there has been no expectation of demand changes taking into account various demand factors. Similarly, not knowing the lead times to expect between various nodes can affect the efficiency of consequent processes and upset major KPIs. These are just two of the areas in which non predictability can affect the performance of the supply chain.

On the other hand, predictability can be a major source of efficient operations as decisioning and actions can be aligned better to desired outputs.

Prediction of events from a maze of complex data points is possible with the use of right AI and ML technology solutions for picking up patterns from the data.

Verdis — Your intelligent Virtual Data Scientist

Verdis, from Cogneau Systems, is an artificial intelligence and machine learning driven virtual supply data scientist that empowers organisations with higher visibility and predictability of their supply chains.

Specifically designed to work in a supply chain domain, Verdis integrates with all the data sources including ERP systems including SAP, WMSs, DMSs and even combines excel sheets data. It provides a one seamless view of the supply chain processes, Inventory and other critical KPIs like costs, lead times and order fulfilment rates at every stock point. Verdis’ visibility capabilities extend beyond stationary stock point and include even those in transit.

Getting visibility through Verdis helps the supply chain function of an organisation to therefore answer questions like:

From where can a specific SKU be transferred to fulfil a demand from another channel?

Which stock needs to be transferred first to maintain FIFO across channels?

What SKUs are moving fast in some other channel of sales?

What orders, raised in one channel, needs to be fulfilled by another channel?

What is the inventory status of return goods or ‘goods under exchange’ at various stock points? And what is the ageing of these goods?

Verdis is a powerful tool that can predict key supply chain events related to the market side, including inventory, logistics and demand as well as the procurement side, including RM inventory and vendor performance. Moreover, such predictions are pushed to the decision maker so she doesn’t lose the opportunity for a gain or avoid a loss.

Verdis | Prediction of Supply Chain Events

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