Tuesday, February 12, 2013

Omni channel fulfillment: challenge to retail industry

This week readings are based on supply chain: 5years down the line. Which made me think about the future of retail industry. In a highly competitive retail marketplace with changing consumer preferences, different formats and large geographical spread, retail logistics has become a critical business activity today. Most importantly a reactive supply chain that can turn customer promises into reality is challenge for retailers. This brings lot many questions in front of retailers in order to sustain in retail industry with its present supply chain.

Which all aspects of supply chain retailer must take into consideration?
How innovation in supply chain can offer required service-level?

Retailers must take into account that customer’s adoption of technology, as a part of their shopping channel, is the driving force behind business model change. Customers breaking the wall between a channel and demanding Omni channel. Omni channel can be described as " a way to meet the demand of today’s consumers, for which retailers must transform their silo-specific fulfillment channels and inventory to seamlessly integrated cross-channel access points to deliver a consistent shopping experience and maximum profitability." This is forcing retailers to reconsider whole business model of marketing to merchandising to supply chain.

The recent research carried out by Retail System Research with name “Omni-channel fulfillment and the future of retail supply chain” has precisely mentioned following key aspects, which retailer must take into account, prioritize them to cope up with the changing demands of customer in near future.

  1. Business Challenge: Retailer of any type and size face external challenges with business context which drive the decision making across the enterprise
  2. Opportunities: Challenges bring opportunities as well to overcome them. Retailers should grab the opportunity to integrate enterprise-wide inventory management with enterprise-wide customer order generation and store level fulfillment.
  3. Organizational inhibitors: The top three inhibitors are: supply chain in not designed to support omni channel demand, inventory, and order management is not integrated. On positive side the top level support is incredibly good. All retailers need to focus on is to meet customer expectation, and to increase the supply chain efficiency, inventory turns and overall profitability.
  4. Technology Enablers: Technology is the best way to drive the change in modern world. There are lot many technologies that has enable the retailers to adapt to new challenges. Business analytics that can report cross-channel activity by customer and geographic proximity, modern eCommerce platforms and integrated inventory visibility has potential to improve Omni-channel fulfillment process
 The changes in business model consists of different aspects of retail industry. There is not one are of improvement. Its collaborative change requireing to modify every aspect of current business model to adapt new one. However, it would be crucial to take initial stages. So here are few recommendations for how to manage the initial stages of transition
  • Prioratize based on customer need, since that is key aspect of whole transition 
  • Capture demand wherever it might be found, resulting in revenue generation 
  • Orient on the store, where inventory accuracy might be problematic. However, at the same time stronger store inventory strategy can be put in place. 
  • Work it manually until you know more, since there is temptation to seek a system to
 I think in nut shell the key to success for retailers is to cope up with business challenges, grab opportunities, embrace technology and with all this overcome obstacles within the enterprise. Still, whether these things would suffice to meet the Omni channel demand is still into question.



  1. This comment has been removed by a blog administrator.

  2. Cool blog site friend I'm about to suggest this to all my listing contacts. Retail Sales Blog


Note: Only a member of this blog may post a comment.