OPERATIONS

Managing a Global Supply Chain in an Omnichannel World

BY Larry Lewis

As omnichannel and e-commerce-only stores have exploded in popularity, delivery timescales and costs have become a key differentiator for retailers. In parallel, advancements in supply chain technology created new opportunities for retailers to make more informed decisions about shipping operations to protect and increase margins.

Behind all of these changes is the consumer-driven market, where retailers must cater to shopper expectations more than ever. This demand directly impacts the full supply chain by introducing complexities for retailers who must stay on top of every touch-point — from those that trickle down to shoppers to the ones that work up to suppliers. The best way for retailers to take charge of an industry driven by the insatiable expectations of shoppers is to gain accurate visibility into the supply chain.

Many retail organizations believe they have sufficient visibility into their operations. Most retailers do this by taking a weekly look at an exception management process around cost allocation to determine where their resources are allocated. But, these weekly snapshots only provide a fraction of the information that a real-time visibility solution can.

End-to-end visibility across the supply chain — encompassing suppliers, logistics partners and the end customer — is the only way for retailers to gain a complete picture. In fact, real-time visibility can give retailers the power to make better-informed decisions, faster.

The benefits of implementing a visibility strategy include:

• Greater insight into transportation costs: Organizations are able to be much more proactive in terms of examining spend, and therefore more strategic about carrier selection. Visibility into transportation costs can also provide a competitive advantage for retailers when renegotiating rates and terms with carriers.

• More affordable carrier pricing: This is an area where retailers often inadvertently overspend and are often unaware of the variance until after an event. Visibility into the supply chain helps retailers become fully aware of the daily choices that impact their bottom line.

• Savings on operational costs: A snapshot of transportation spending can go a long way in helping retailers adjust operations to cut back on spending. This financial view of the network can then prompt an analysis of costs from an operational level, leading retailers to make adjustments and save money.

• Better understanding of shipping methods: Retailers tend to overspend on non-discounted services such as same-day couriers and next-day early morning shipments. Often, the customer is not available to sign for the item and may actually need to call for pickup. By stepping back and taking a look at shipping needs, retailers may find that the customer would be just as happy with two-day shipping, which would provide a significant cost savings.

Omnichannel has fundamentally changed the retail landscape. Retailers who take action and gain visibility into the supply chain will be well-positioned to succeed in a market where many consumers have a false sense that all retailers can now operate within the omnichannel model, leading to frustration on both sides when expectations are not met.

In essence, omnichannel fulfillment and the myriad of consumer shipping options have created a new level of complexity for retailers. Without visibility into all of the data driving the supply chain, it is difficult to make the right decision for the business. To best manage a global supply chain, retailers must not only embrace omnichannel, but gain visibility into the supply chain.



Larry Lewis is a product marketing manager at Kewill, with responsibility for Kewill's analytics and spend management products and services. Prior to Kewill, he was co-founder, CTO, and COO of PointandShip Software where he led the design and development teams for their shipping expense management software. He can be reached at [email protected].

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