Prepare You for the Unknown of Omnichannel with the Right Supply Chain Technology

Posted by Jon Kuerschner on Mar 2, 2017 7:00:00 AM

Prepare you for the unknown of ommnichannel with the right supply chain technology

There was a time, not so long ago, when distributors had one straightforward job: retail store fulfillment. Push the product out to stores, which sold it to customers with limited purchasing options.

That model has of course changed drastically – and quickly. Warehouses for companies that own brick-and-mortar stores still do store replenishment, but they also must juggle broken-case store picking, drop shipping on behalf of other online retailers, direct-to-consumer orders and more. Even though fulfilling orders for eCommerce and traditional retail operations are very different tasks, they are often running side-by-side, in the same warehouse.

And there are challenges unique to online retail. With footwear, for example, it’s not uncommon for one customer to order two or three sizes of the same shoe to see which one fits best. The others are then sent back to the distribution center, creating a much higher volume of returns to process.

These sweeping changes come at a time when retailers cannot afford to let any business opportunities pass them by. As competition increases – notably from pure-play e-tailers – companies do not have the staying power for sales to decline because of fulfillment issues.

It’s not as if organizations can simply master just retail and eCommerce and feel prepared for the future. The omni in omnichannel means there is no limit on the number of ways to intersect with a buyer – and customers have very specific expectations within channel by geography (i.e., next day in metro areas). Already, there are new distribution channels like buy online, pick up in-store and clothing rental (more on that later). Businesses will undoubtedly find new, creative ways to sell products by capitalizing on the opportunity presented by today’s hyper-connected world.

Selecting the right technology

There is no ironclad plan for operations executives to conquer the unknown, but the right technology can certainly help. A warehouse management system (WMS) is foundational software for any efficient distribution center. Invest in a WMS and other supply chain execution software that will flex to the business as necessary; do not build your business around the software’s capabilities. It’s critical to mold the software around what differentiates your organization.

New distribution channels affect the entire operation. Fulfilling the single-line or multi-SKU orders common to online sales requires different business processes than those required for traditional case and pallet-based retail fulfillment.

And today, distribution often extends beyond the four walls of the warehouse. A brick-and-mortar store may fulfill an online order. A consumer may purchase something online, then return it to a store. One organization may fulfill online orders to meet the needs of another e-tailers’ “endless aisles.”

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If the software cannot adjust to major operational changes, it puts the business in a tough spot. Resolving that problem could mean writing big checks to the vendor – or even replacing the entire system. That’s why it is so critical to choose the right solution from the start.

Retailers will always flex to the demands of the consumer, but they need the infrastructure to support that guiding philosophy.

The Black Tux finds a solution to optimize its unordinary supply chain

The Black Tux is a perfect example of an emerging channel in the apparel industry. The company rents high-quality suits, tuxedos, shoes, ties and other accessories – all without customers ever stepping foot into a store. Clients select their outfit(s) and submit measurements online and it’s then delivered to their doorstep (if necessary, The Black Tux will send a replacement at no charge). After the event, the customer places their rented garment back into the same box, attaches the prepaid label and sends it back to the DC in Southern California, where it is cleaned and made available for the next online renter.

The Black Tux finds a solution to optimize its unordinary supply chain

It’s an incredibly convenient transaction for the customer, who avoids multiple trips to the rental store. However, it raises unique logistical challenges. Inventory accuracy must be perfect with such a wide variety of sizes and styles – a miscommunication between the online store and the warehouse could mean a groom receives the wrong tux for his wedding.

In addition, all items must be inspected once they are returned to the warehouse. Is a suit damaged or worn down to the point where it needs to be replaced? The Black Tux also permits clients to get their suits or tuxes fitted by a local tailor and these changes must be recorded when the item is returned.

After growing to the point where it required a WMS, The Black Tux eventually selected HighJump WMS in 2015 because it had the flexibility to handle the quirks of the company’s supply chain. It designed custom workflows to direct put-away for returned items and record their current status.

At a high level, everything is serialized (pants, jackets, vests, etc.). This facilitates the lifecycle tracking of each individual garment (DC to customer 1, to cleaning, to repair, to customer 2, to cleaning, etc.). Each garment has a defined number of “turns” before it is retired.

This serialization is also an important data element for the RFID portals used to receive return garments in the DC and the RF scanners utilized to track inventory. As customer orders flow in, the WMS creates pick tasks for the exact style/color/size combinations that were entered on the website. The garments are consolidated into a special garment box or hangar, parcel labeled (including a return label) and sent directly to the customer. Throughout the process, the exact serialized combination of garments is tracked and processed efficiently.

That complexity can only be managed with a sophisticated WMS and complimentary warehousing solutions. A few years ago, an online rental model such as this did not exist, thus the technology was not developed specifically for these processes. The flexibility of HighJump WMS in this one scenario demonstrates why adaptability holds the key to conquering whatever innovations await in the future.

Topics: Retail, eCommerce, Omni-Channel