September 2017 | Commentary | E_Commerce

Supply Chain Be Nimble,
Supply Chain Be Quick

Tags: Retail, E-commerce, Retail Logistics, Supply Chain

Pan Chen is Vice President, Business Analytics, HAVI , 630-493-7400

To deliver a seamless and positive customer experience, retailers must adopt an omnichannel mindset and ensure supply networks are nimble enough to quickly respond to consumer demand, regardless of where or how shoppers interact with their brands.

Omnichannel retail is synonymous with speed—shorter product lifecycle, quicker turnaround on promotion, and faster delivery expected by customers. As a result, businesses need to reconsider how they think about distribution and leverage their network assets.

Aligning and managing suppliers, transportation providers, warehouses, and distribution centers across channels requires full visibility, communication, and dynamic planning.

Optimizing supply networks in response to variables such as fluctuating consumer demand and pricing is crucial when consumers are interacting with brands online, in stores, and on mobile devices. This flexibility allows for quick adjustments, which can reduce output cost and time, and deliver a positive customer experience.

Consider a supply chain manager who sees that online demand for a product is strong in one part of the country, but slower than anticipated in that region's physical stores. They might decide to ship product from those stores to meet consumer demand rather than shipping from a centralized distribution center as usual.

Identifying this opportunity and adjusting fulfillment and distribution patterns could cut shipping times and costs, enable the brand to meet consumer demand, and reduce inventory levels in physical stores where product demand is low.

Companies will need to make regular adjustments as omnichannel rapidly grows. For example, your supply chain operation should be able to redistribute returns throughout the network for re-purchase to avoid product obsolescence. Keep in mind the ability to make easy online purchases and in-store returns is a big part of customer satisfaction.

To respond quickly to changing variables in an omnichannel supply network, consider the following four steps.

  1. Understand strategic and tactical levers. Know both long-term and short-term levers that will need to be adjusted to respond quickly to changing customer demands, supplier changes, and capacity fluctuations in the supply chain.
  2. Plan for flexible operations. Flexibility can mean multiple suppliers, arranging supplier and distributor contracts based on volume ranges, or using shares or service levels of precise measurement. Business agreements should offer sufficient flexibility so organizations can react to changes in the system.
  3. Know the data and build the analytics infrastructure. Understand what may trigger changes in the supply chain and build the right data and analytics infrastructure—reports, dashboards, and/or alerts—to notify if/when issues arise. But make sure to balance the information's comprehensiveness with its relevance.
  4. Establish a business process to take advantage of the analytics. Extract actionable insights from data by establishing a data-driven business process that takes the guesswork out of day-to-day activities. Process and automation can help avoid oversights and last-minute scrambles, and transform analytics into results.

As online purchases continue to grow exponentially, make sure your supply chain can adjust to accommodate omnichannel trends and deliver a better shopping experience.






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