Every Monday on LogistiekProfs, we let a logistics expert do the talking. This week, consultant Hans Groen, owner of Addvise, discusses how the omnichain can become profitable despite all the bottlenecks.
For many retail chains, it’s already
difficult enough to set up a well-functioning omnichain. The
next challenge is to make it profitable.
challengesRetail chains are all
well aware of the importance of an omnichain. However,
a 2015 study by RSR Research that only a small number have
has successfully integrated online and in-store shopping.
Online efforts are primarily aimed at creating brand awareness, which is not
what omnichannel retailing aims to achieve. One of the main pain points is
the standard of fulfilment and ensuring the right customer
experience.
Fulfillment often stumbles
on the lack of transparency throughout the entire chain. In particular, the
integration with PoS is particularly poor. Sales departments often still
have some insight, but when it comes to the upstream warehouses and
sourcing, there is no connection whatsoever. The supply chain’s response is then
by definition inadequate.
Customer experience has
suffered in recent years as a result of the economic crisis. Retailers are attempting to
primarily to reduce labour costs in their shops as much as possible
. Yet, to enhance the customer experience, additional
in-store services are required to guide the customer through their
purchasing process and are able to identify what the customer is looking for
but ultimately do not buy or find.
Factors
Stock visibility across the
entire supply chain at any given moment is an absolute must in a
market where demand is changing ever more rapidly, as is the channel
through which that stock must move is also evolving. The organisation must be
be able to direct any product through any channel at any time
at any time.
It is also important to ensure that the correct stock is located as
close to the point of sale as possible to ensure the fastest possible response
possible. This is particularly challenging because the PoS is no longer just
just the shop. Where do you store which stock, and how do you monitor
these developments across each channel – both directly and the interaction
between the channels.
Predictive analytics is the
next step in optimising your supply chain. What non-purchase
signals has the customer left behind? You can identify these from
click behaviour on your website or via surveys in your shops carried out by your
staff. You need to collect this information for your forecasting,
Sales and Operational Planning.
For many
organisations. Every time your
stock is accessed or moved, you incur costs.
Applying a ‘covering’ margin is no longer sufficient because
omnichain channel exchanges can cause your costs to rise sharply.
Labour costs are often
clear, but there is little insight into revenue /
costs associated with non-transactional activities. Stock management and
customer experience activities are not managed proactively enough.
Furthermore, only limited attention is paid to task
automation solutions. Transactional processing often
often takes up a great deal of staff time and, as a result,
keeps staff away from customers who are still in the shop (think of self-scanning
in supermarkets).
Returns logistics, always a
sticking point in supply chains, is not sufficiently integrated into retailers’ day-to-day
operations of retailers. From receipt in-store, collection by
lorries or online returns – the highly irregular flow, which is often
is outsourced, is rarely properly co-ordinated across the entire supply chain and
therefore consumes a great deal of time and money within the chain.
Agility
The new reality is
constant change in the market and within omnichains. This is
driven by customers who are constantly seeking an experience
and is not merely buying a ‘product’. Organisations will only succeed
if they structure their entire supply chain accordingly by ensuring
transparency and flexibility. Simplifying your
organisation by making it flatter and more horizontal, with a focus
on your flows, will improve interaction, with the focus
on the various points of sale. And it is along these flows that
human interaction and the actions of your staff are of
of vital importance.
Hans Groen - Consultant Supply Chain and Performance Management
