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Why's Omni-Channel Fulfillment Important To Retailers?

odwlogistics / 7:30 AM on April 7, 2015

fulfillment

A common term that is oft spoken in the retail industry these days is "Omni-Channel".

It comes up frequently for good reason - retailers looking to grow and put themselves in a position to be successful in the future know this is a concept they need to understand and put into practice - or they'll get left behind.

A huge part of omni-channel relates to a retailer's supply chain, and in particular their fulfillment process. Omni-channel fulfillment is the idea that company will receive customer orders from many different sources (such as their own website, or Amazon, or eBay, etc.) but fulfill and ship the orders from a central location or integrated network of warehouses.

Smart retailers know they can achieve economies of scale in many ways by combining what in the past were separate sales "channels". This is a surprisingly recent innovation, but an important one none-the-less.

An omni-channel approach to fulfillment creates logistical efficiencies in a number of ways.


V
olume Matters- Like many things in supply chain logistics, volume is important. By consolidating the various parts of a fulfillment operation, retailers can save on costs. For example, packing and shipping boxes becomes less expensive on a per unit basis as volume goes up. Anyone who has talked to UPS or FedEx about pricing knows that you can negotiate much better shipping rates with more volume as a bargaining chip. The same goes for fulfillment and warehousing rates.


Consolidated Inventory-
It is expensive to maintain multiple inventories. Combining the inventory that you pull from to fulfill orders for the various channels can save you big. More centralized inventory means less duplication every step of the way - from space needed, to time spent receiving, to ordering, and inventory tracking.

Technology is Key- Nothing happens these days without the right technology. Fulfillment in an omni-channel world requires the right software to handle order management from a variety of order sources. Similarly, warehouse management software is the tool that keeps things organize in the warehouse.

If you are still managing your sales channels as separate "silos" then it may be time to take a look at an omni-channel approach to your fulfillment.

It could be the key to lower operating costs and faster service for your customers. It's definitely the way you stay ahead of competition in the future.

 

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