1. Adding distributed order management (DOM) software to your systems
Such software brings together internal and external data sources and looks through your network when each order comes in, from any channel. It examines where existing inventory exists and how close it is to the customer, and the most efficient method for fulfilling that order according to customer preferences, factoring in shipping and labor. For example, splitting an order between two locations may be the fastest option, but it likely isn’t cost-effective, and the DOM software can pinpoint the best options based on multiple variables.
This is the real-time integration lacking at many organizations today, with inventory tracked and adjusted and the impact on key performance indicators reflected in dashboards. That said, the software is only as good as the data: creating the connections between product material descriptions and IDs, linked to where they are stored, across networks of vendors and others in the ecosystem. The DOM software sits atop that system.
2. Optimizing your network
Truly delivering an optimal and cost-efficient customer experience, with agile order fulfillment, likely requires organizations to scrutinize the locations in their network so they are as close as possible to their end customers. Organizations should first assess where their demand comes from. How accurate is your forecasting process, and are you capturing the right demand signals — at a state or regional level, for your varying customer segments? Again, software can help.
That should guide your strategy on putting the right products in the right locations, and companies should be regularly revisiting that process, perhaps annually or more frequently, as the landscape changes and as new products are introduced. Organizations should also determine where they want to fall on the cost spectrum, whether it’s to minimize expenses to the greatest extent possible or to deliver a better, but more costly level of service.
3. Exploring a control tower and radio frequency identification (RFID)
Control towers are the ultimate tool for enhancing inventory accuracy and visibility across all nodes in a supply chain. They use analytics along with artificial intelligence and machine learning to optimize supply chain resources, with a self-correcting workflow that detects issues, assesses alternative actions and makes recommendations on managing the event. And through radio frequency identification (RFID), organizations can use tags, readers and software for real-time tracking without costly labor requirements. These are powerful tools for those seeking the advanced maturity of the leading omni-channel players in the market today.
Regardless of which strategies your organization decides to pursue — or whether it’s beginning to develop a direct-to-consumer model or sharpening it — it’s best to think of the options within long-term sales and operations planning, over the next two to five years. How big are you hoping to grow, and in which markets? Defining the vision and the infrastructure to sustain it is critical, as that should guide the supply chain from the beginning, rather than attempting to improvise later.
Companies that thoughtfully build a scalable architecture with robust technology enablement and software up front and then expand footprints will likely position themselves for success. Otherwise, retailers will find themselves struggling as the patchwork of legacy solutions creaks under the weight of expanding e-commerce needs, and manufacturers will continue to work within arrangements that can limit their ability to innovate and meet customer needs on their terms.