We take a look at the role of purpose-driven supply chain platforms in attaining Omni-channel.
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The growth and evolution of solutions in the supply chain market are reflections of the growing importance of supply chain in business and the dramatic changes in global trade. In the last issue we talked about the value that users were looking to derive from these solutions in terms of metrics. In this segment we want to look at changing processes and how they affect what constitutes a ‘solution’ vs. an application.
Of late, the need for companies—retailers, wholesalers, and even B2B—to holistically sell and fulfill though their entire channel has led to a revision of the fulfillment solution. To create an Omni-channel platform requires modules that previously may have been considered sell-side or demand-side applications (vs. supply-side) to be delivered in a cohesive platform. (Refer to The Value of Supply Chain Solutions for a visual of this concept.)
I was asked, when discussing this with one of the providers featured below, what my definition of that platform was. I offered this:
“A set of purpose-driven modules that share workflow and a common database out-of-the-box, yet don’t require the user to implement all the modules.” As awkward as that sounds, it does preclude separate modules that require integration code to make them work. However, I was chastised by another provider who pointed out that their integration techniques afford elegant integration between separate vendor solutions and provide a single view as a user required. Wikipedia and I would say that this is cross-platform. Good design, yes, can make integration easy for users,1 but it is not a single platform.
However, putting aside this debate, my goal here is to show that there are a variety of platform options for Omni-channel currently on the market.
Creating an Omni-channel platform requires a tighter integration between modules than may have been as crucial in the past.2 Take the example of a third-party service provider who repairs branded equipment. They may house some of the inventory in their own stock, but they also can place orders to the brand company (or alternate manufacturer who makes substitutable parts). These orders not only come through various channel entities—repair, wholesalers, end-users, or the company’s own field repair team—but also from various ordering channels such as web, fax, mobile. And one day the parts may order themselves through Internet of Things (IoT) applications.
This demonstrates that B2B use cases are as strong as retail’s need for order-management methods and inventory that are tightly linked. Lots of inventory types—in-transit, retail, and parts—need to be visible in the customer or intermediary channel for reliable fulfillment, whether for finished goods or parts replacement.
Omni success is about a common customer definition, no matter what the ordering channel. And it is also about fulfillment—finding the inventory, defining the best methods of fulfillment, and finally, fulfillment. (Figure 1). And we must add taking returns. Purchases made through one channel should be returnable in another.3 Can we, for the sake of this discussion, call this Omni-management? That is, keeping all the parts working together for a unified purpose across all channels.
Figure 1: Omni-management
Purpose Drives Platform Design
An Omni-channel solution should be a reflection of purpose—integrating planning, or integrating fulfillment, or integrating service, for example. Though there are many suites (modules sold in bundled deals), purpose-driven platforms are not as readily available, in spite of the market hoopla. Purpose-driven means a clearly defined, well-orchestrated solution with existing roles, workflows, and reporting on the platform out-of-the-box. The purpose must be self-evident.
The concept is that information on the platform in one area or module drives execution in the other. For example, a high concentration of customer-types in one location who have demonstrated demand for certain products may trigger a new inventory strategy for another location. This can be event-driven such as spring break for college students descending on Florida, or more traditional seasonal or episodic demand patterns. The fulfillment system should sense depleting inventory in the channel and be prepared to respond. In concept, this is extending the DC/warehouse into the store (or vice versa).
Let’s compare a few solution platform providers (Figure 2) on the market today and see how they approach their platform plays. Most of these platform players have many more modules than depicted here. However, this chart is demonstrative of areas of strong concentration. (This is not a check off all the boxes/scoring chart.)
Figure 2: Platform Plays
In fact, although different solution providers have certain strengths, no one is equipped to solve the Omni challenge in totality. Domain leaders effectively plug in ecommerce with fulfillment such as LogFire does with NetSuite; or Manhattan with Oracle; or Descartes with NetSuite or SAP; and, of course, with other modules that the solution provider possesses.
Though ERPs promise a cohesive database, they often are not strong in supply chain fulfillment—Warehouse Management Systems (WMS) and Transportation Management Systems (TMS). ERP, as an option, has come a long way in this area, but interestingly, in the last few years, with the acquisitive nature of ERP companies, there is no guarantee that they can deliver a single platform experience out of the box. In other words, although many can, don’t assume that everyone can.
Make no mistake; to create an Omni-channel, response-driven environment from a user/enterprise perspective is a huge challenge, no matter how well the platform supports the process. Old organizational design issues persist. For example in the 90s, organizations’ responses to multiple channels were to build a solution for each one. There were even fewer choices in those days for users to consider when seeking a broad-based, multi-purpose, multi-channel solution. So one technology environment was built for each channel. Unraveling that now is a lot of expensive and painful work.
However, the Customer is King. And for customers to have their day requires flawless fulfillment from the enterprise. They deserve nothing less. Having customers make multiple phone calls to the store, delivery center, the channel rep, etc. is not a way to win repeat business. Without Omni-Management, companies have nightmares; with it there is potential for Nirvana!