One of the most used buzz words in business and supply chain today is Omni-Channel. In this year’s 19th Annual Third Party Logistics Study, we looked at the operations impact of Omni-Channel. In the study we wanted to determine what would happen to today’s supply chains if companies sought to satisfy the current nature of consumer’s fulfillment expectations.
Overall we found a lot of learning going on across organizations. Most companies realize they are not currently in a position to satisfy consumer expectations (only 2% of our survey respondents believed they were high performing), but few are investing significant amounts of capital at this point either. Most companies are piloting efforts, staying on top of advancements in software and working with other internal functions to determine what operations can achieve on a wide-scale basis while controlling costs.
First and foremost, companies are trying to tackle the issue of different sources of information. Trying to satisfy today’s consumer requires companies to integrate various channels of orders, regardless of whether they come from stores, on-line, from mobile apps or phone. Getting one integrated view of orders provides a starting point to determine the preferred and most effective means of fulfilling that individual order. But that needs to be balanced with an equally integrated view of inventory and its location. This allows companies to start the process of satisfying those orders with the most effective inventory.
The challenge of integrating these sources of information isn’t necessarily new or unique to Omni-Channel. Where the pilots and learnings come in is how that inventory is delivered to the customer. A lot of splash has been made about drones and their ability to create a differentiated approach to delivery; though other than the folly of a drone delivering a pizza in India, the only real value documented so far has been the opportunity to use drones to deliver medicines to remote locations. So while drones receive the headlines, many more applicable and scalable solutions are being piloted to drive efficiencies in the always-on Omni-Channel, including the most prevalent choice of taking the “wait and see” approach.
So as companies pursue the “fast follower” approach to fulfilling Omni-Channel requirements, we believe it will create opportunities for other organizations to enter. Several companies voiced the concern that it would be too capital intensive for all organizations to rebuild certain supply chain capabilities to be efficient and effective in an Omni-Channel business environment. With the pervasiveness of cloud-based technologies, they may be an opportunity for non-traditional competition to develop new capabilities in a Greenfield environment. More to come in next year’s study…