March 2019 | Commentary | The Lean Supply Chain

Omnichannel Retail: 4 Rules for Success

Tags: Retail, Supply Chain, Lean Logistics

While it’s not possible to be truly omniscient when it comes to omnichannel retail and your supply chain, it is possible to try to anticipate some of the challenges ahead.

Paul A. Myerson, instructor, management and decision sciences at Monmouth University and author of books on Lean and the Supply Chain for McGraw-Hill, Pearson, and Productivity Press, 732-571-7523

Omnichannel decisionmakers anticipate disruptions led by drones, autonomous vehicles, and crowdsourced delivery, finds a recent Zebra Technologies study.

Survey results indicate that in response to today’s consumer, who expects an integrated, faster purchasing transaction, and the growth of e-commerce, 78 percent of logistics companies expect to provide same-day delivery by 2023 and 40 percent anticipate delivery within a two-hour window by 2028.

To successfully navigate these “white-water rapids,” as described in my January 2019 commentary for Inbound Logistics, companies will have to select winning processes and technologies—and not wait until the last minute. So, in a way, they need to be somewhat omniscient.

A Bain & Company whitepaper titled Modern Retail Supply Chains: Backbone for Omnichannel points out the following four basic rules for success to consider when adapting to the new and evolving reality of omnichannel retail.

1. Understand your business and customer strategy.

Learn as much as you can about your customers, including how they shop, how they want to receive and return goods, and what they will pay for. Understanding these strategies can help you avoid unnecessary changes and investments that can disrupt your supply chain and harm your bottom line.

2. Develop capabilities to support your strategy.

Customize services to meet customer needs. For example, do they desire same-day delivery? Buy online and pick up in store? Developing these capabilities involves decisions such as whether to insource or outsource activities including e-commerce fulfillment, transportation, and returns and how to integrate these and other processes with the rest of your supply chain.

3. Adapt your operating model.

Take a 360 view and involve other functions such as marketing, merchandising, e-commerce, store management, and IT in supply chain decisions. There are plenty of trade-offs in operating decisions such as cost versus service (for example, transportation costs versus same-day delivery), so these decisions should be as collaborative as possible to ensure that there is buy-in and that success is measured properly.

4. Invest in technology and analytics.

Improve technology throughout the supply chain to help with all kinds of processes, from forecasting and customer order tracking to reordering quantities and restocking locations. By linking these decisions with your strategy, you can avoid a lot of unnecessary investments because it can be tempting to jump on the latest technology without first doing your due diligence.

Starting with these four rules should lead you down the right path to make positive changes to people, processes, and technologies in your supply chain.