It is all about the customer
Demanding and techno-savvy customers are re-shaping the consumer goods market. Customers now have greater access and more choices than ever before compelling sellers to develop new fulfilment solutions. Retailers, wholesalers, and other service providers must adapt to this new e-commerce business environment, and quickly. Physical facilities must be able to handle multiple sales channels with separate picking operations, replenished from a common inventory.
Mobile phones, wireless networks and the click-to-buy-now phenomenon have added a whole new dimension to a consumer’s shopping experience. This has created a whole host of challenges for the supply chains of traditional bricks-and- mortar stores. Customers determine not only what they buy, but how they buy it and they can choose their preferred delivery method. The expectation is that a retailer will always have stock of the items they need and that the product can be delivered quickly, sometimes within the same day.
Best practice – Sears USA
A leading integrated retailer in the USA, Sears Holdings Corporation, has been in e-commerce for 14 years. Their service is focused on seamlessly connecting the digital and physical shopping experience using Shop Your Way®, a social shopping mobile app. Besides the full range of on-line and in-store facilities, Sears offers “In-Vehicle Pick up, Return and Exchange in Five” service.
Customers pick up, return, or exchange their purchases for free without leaving their vehicle. The service is guaranteed to take five minutes or less of the consumer’s time.
The fulfilment challenge
Distribution centres (DC) and warehouses need new or updated systems and revised operational procedures to embrace single-order, single-line item shipments. The increased volume of single-item orders is pushing companies to introduce software tools to help satisfy demand while maintaining profitability. Companies require scalable warehouse management solutions (WMS) to be able to manage omni-channel activities; products must be shipped in the fastest time possible along the most efficient routes.
Using technology for smarter distribution
There are three main features of an intelligent warehouse: visibility, mobility, and flexibility. The fast rate of change due to the growth of e-commerce is a challenge for businesses. Existing infrastructure and legacy systems will have to be replaced or satisfy these new requirements.
A WMS can be used to track and streamline tasks, the workforce, and material/equipment flows in a DC. It can provide a better organization, a more integrated and efficient workforce, and streamlining of warehouse space and processes that enable the business to ship and deliver every order on time—no matter how big or small.
WMS and innovation in materials handling have become important catalysts in the evolution of smarter warehouses. Speed and data accuracy are paramount, these cannot be satisfied by manual systems and processes. Customers want to know where their order is and how to track it.
For traditional companies with DCs that normally service only their own stores, adding an e-commerce fulfilment solution can be challenging. Lack of experience in the new ways of working and the cost of WMS technology tools is causing companies to consider outsourcing e-commerce fulfilment to third-parties.
Specialised 3PLs focused on e-commerce often have the material handling equipment, systems, experience, and expertise to more efficiently process e-commerce orders. Companies should consider taking professional advice from logistics consultants on how to assess the various options available for an in-house or outsourced solution.
Picking and packing
For most omni-channel DCs, one of the main challenges is picking. The picking processes for e-commerce are very different and do not easily fit into a system designed to deliver to brick-and-mortar stores.
Single-line or single-unit orders are typically processed differently in a batched, high-speed packing operation in a separate area of the facility. Labour is often the single biggest cost and inefficient picking systems can have a huge impact on operational costs in a DC.
Adapt and with a dash of speed
New technologies offer real-time visibility to available inventory and can support the most cost-effective method of fulfilment.
Innovative retailers are embracing new omni-channel solutions and moving into same-day shipments, often by getting more geographically close to their customers. In an increasingly competitive global retail environment, retailers have no choice but to go with the e-commerce flow.
How have you embraced the e-commerce challenges in your business?