Distribution Centre & Demand-Driven Supply Chain

Content By | RIS News

Omnichannel retail is well known for its disruptive forces and tremendous opportunities. On the disruptive side of things, the rise of e-commerce has driven huge changes in the way of retail products must be distributed to the end consumer – not just through stores anymore but also straight to the shopper’s home. The operational challenges to adapt and compete have been immense. However, that transformation has come with the opportunity for double-digit e-commerce sales growth for many brands and merchants, plus the chance to establish even closer consumer relationships.

Adjusting the supply chain to meet omnichannel demand is not easy, and there are unique complexities facing every part of the chain, including product development, merchandising, sourcing, and fulfillment. This post will discuss some challenges and opportunities specifically related to the final links in the chain, from receiving goods at the distribution center (DC) to responding to orders.

The Efficiency-Expediency Balancing Act

The modern retail DC is a hive of multifaceted activities, all centered on moving product inventory where it needs to go as quickly, accurately and cost-effectively as possible. Traditional wave-based fulfillment processes have emphasized efficiency when it comes to picking, packing and shipping large batches of the same items. All hands on deck, so to speak, would focus on moving the batch from one process to another until it went out the door and onto the truck. There were buffers between processes and if all of the hands, from pickers to packers to loaders, were full of work. the whole wave would need to slow down or stop for a while until they were caught up and could let more of the batch’s items into the flow. But the work usually got one in an efficient manner because the facility was built from the ground up to support this type of flow.

Today’s e-commerce orders complicate things. Getting an online order out the door requires more of an assembly mentality and process flow. So how does a retailer coordinate all of those same “hands” to do all of the same processes when the “batch” is now a single unit or maybe two to three units? “They may as well be from different ends of the earth.” That’s how one seasoned distribution executive summed up the vast difference between the efficiency needed to handle traditional retail store fulfillment and the expediency so critical to filling e-commerce orders. The former requires workforce skills, systems, machinery, processes and infrastructure to move large quantities of items, in bulk. For example, a DC might process orders of thousands of items each multiple times daily, sending them off in large truckloads to stores. On the other end of the spectrum, expedient fulfillment also requires specialized processes, equipment, and technology, but this time focused on picking, packing and shipping thousands of orders of one or two items, each heading to a different destination.

Polar opposites indeed. It’s no wonder many retailers initially opted for separate e-commerce fulfillment centers. However, it’s now widely considered to be best practice to co-locate fulfillment operations for stores (retail) and e-commerce (online), with all their yin-yang differences, into DCs that can literally do it all. But to do it well, warehouse technology hs to let inventory flow efficiently or expediently when need be.

Like many leading fashion retailers, Gap Inc. has been investing in its warehouse management and fulfillment infrastructure to evolve with today’s omnichannel demand. In particular, the retailer has gotten away from having silos of distribution for different channels. It’s distribution network services the entire Gap Inc. family of brands, across both online and in-store channels. “Like our customer, we think about the omnichannel experience,” says Kevin Releford, regional director, global supply chain and product operations, Gap Inc. “Previously, Gap Inc. operated retail and online distribution centers separate channel operations, but our capacity and workforce have allowed us to flex to the growing shift toward omnichannel shopping by combining both channels into single facilities. This increases our efficiency to deliver inventory to our customers by having a more effective regional network.”

Strategies for the Demand-Driven Supply Chain

Warehouse execution systems (WES) are designed to organize, sequence and synchronize a DC’s resources, including people and machines, to adjust to real-time demand conditions and reprioritize work accordingly. They serve as a sort of connective tissue between order/inventory systems of record (WMS and ERP) and warehouse control systems (WCS) that drive material-handling equipment (automatic storage and retrieval systems, conveyors, sorters, and, increasingly, robots).

Retailers can leverage WES automation to prioritize the day’s shipping volume with minimal staff intervention, freeing DC management and team members to focus on making sure everything gets packed properly and out the door on time. They do not need to be concerned with scheduling the next batch wave or determining when DC resources will be able to handle time-sensitive e-commerce orders. When it makes sense to do so, batches of orders can still flow through the facility, but these batched do not prevent other orders from being introduced into the flow. Work on each order starts and finishes independently from the work on all other orders. In this way, the WES enables a blend of wave and waveless processing to provide more dynamic order fulfillment and to prioritize the most important orders at a given time.

Sometimes, this means identifying synergies among multiple e-commerce orders so that they can be processed with batch-like efficiencies – just in time to make the last truck pickup of the day. The WES knows exactly which orders are in the queue and how long it will take to process them from the time they are released until they exit the DC.

The latest warehouse technologies are leveraging artificial intelligence (AI) to analyze customer orders as well as the productivity of associates and material handling equipment, says Steven DeNunzio, a senior lecturer and director of the Master of Business Logistics Engineering Program at The Ohio State University’s Fisher College of Business. “More and more solutions in the WMS/WES/ERP space are moving toward the concept of lean fulfillment and away from traditional batch waves,” he says. “All of this is in response to an increasingly sophisticated and difficult-to-predict customer and the need to remain agile and adaptive.” “It’s not always about speed,” says DeNunzio. “I think the buzzword today is ‘precision’. Do we meet the omer’s expectations? That may include speed. Today, it usually does. But it also includes things like getting it to them precisely when they want it, or packaged exactly the way want it, or delivered on the other side of their garage or front door.”

DeNunzio offers an example of Amazon Day. Amazon customers select a day that’s most convenient for them to have their Amazon purchases delivered. “Unless you specify otherwise, everything’s delivered on that day. This concedes that while a customer wants something fast, they don’t want to be peppered with deliveries every day. That may not be their definition of ‘service’. They also need delivery convenience,” he says.

Gap Inc.’s investment in warehouse-related software and automation is helping the retailer respond better to quickly changing fashion trends. This includes fulfilling the demand from its expansive store network and individual consumers’ online orders. “Knowing that we must serve both channels (retail and online) seamlessly, the tools we use need to be flexible and focus on speed and scale. That allows us to react quickly to demand and keep our service levels high,” says Releford. “At Gap Inc., we are always looking to serve our customers better and will continue to invest in automation that allows our teams to move faster and remove friction.”

Finally, there is a trend among retailers towards using regional satellite DCs to better respond to localized demand. Such smaller urban and pop-up DCs will continue to become more common, says DeNunzio, who also expects to see the repurposing of unprofitable retail stores into points-of-presence for distribution. This might include part of an unprofitable store or the entire store. “This is just the continued evolution of true omnichannel/unified retail,” he says, as retailers focus on “finding better ways to shorten the last mile and improve service levels to customers.”

Conclusions

The time is ripe for retailers to leverage technology to fulfill orders, regardless of channel, from a common inventory pool within the same DCs, rather than trying to manage separate stockpiles and DCs for their e-commerce orders. By doing so, they optimize warehouse capacity, machinery, and labor and can often respond more quickly and cost-effectively to consumer demand.

It’s true that fulfillment requirements for these different channels – shipping in bulk to stores vs. shipping one or two items to individual consumers – can seem at odds with each other. But the technology exists today to efficiently – and expediently when necessary – flow both types of orders through the same facility. It’s not magic, but WES technology advances can make it seem as if the right products are making it to the shelf or to the consumer’s doorstep “automagically.”

Check out LS Central, an ERP system designed for retailers. Along with Dynamics 365 Business Central, all your warehousing, inventory, and distribution needs will be taken care of. If you would like to speak to a consultant please call allonline365 on  +27 (21) 205 3650 or email us on info@allonline365.com. 

LS eCommerce Magento – Take your business online

LS eCommerce Magento

Introducing LS eCommerce Magento

Th importance of omni-channel retail has never been more prevalent than it is now. LS Retail and allonline365 now bring you the opportunity to take your business online. LS eCommerce Magento is a mid-market out-of-the-box eCommerce solution that can get your online business up and running fast. This easy to use end-to-end solution ensures all items, prices, discounts, order fulfillment etc. are maintained in the robust LS Central management system and seamlessly integrates with your eCommerce platform.

An end-to-end retail solution

It is critical to have the same customer experience regardless of which sales channel your customers use to purchase your products. Businesses are able to quickly and easily get their eCommerce platform up and running, but their problems start when their eCommerce platform does not integrate with their order fulfillment and finance systems usually supported by their ERP system. With two separate systems you don’t have visibility across your entire operation to track stock, view sales across all channels, store and warehouse inventory, manage loyalty and discounts etc. effectively between the two separate systems. This results in separate data and information that must be reconciled in order to gain a holistic view of how your business is performing. With LS Central and LS eCommerce Magento, all your business processes, stock, and sales information is recorded in one end-to-end solution.

Putting your customers first

Using a unified commerce system ensures all your business data is consistent across all your channels. From pricing, to items to product availability, your eCommerce system is in sync with your ERP solution with updated information in real-time. Having access to real-time data ensures you are always offering your customers stock items and promotions that are current and accessible. The Click and Collect option allows customers to choose if they would like their items delivered directly to their homes, or pick them up at their nearest store location. Once an order has been placed online for collection at a store, the staff at the store will be notified to put the item aside, and the order will be recorded in the centralized ERP system.

If you are interested in learning more about our LS eCommerce Magento solution, or would like to see a demo, please contact us at info@allonline365.com or call  +27 (21) 205 3650

Partnered with LS Retail

allonline365 – LS Retail Gold Partner 2020

LS Retail Gold Partner

allonline365 LS Retail Gold Partner 2020


allonline365 is pleased to announce that we have been named as an LS Retail Gold Partner for 2020. The Gold Partner level is a significant achievement and this honor is limited to companies who displayed extra dedication to the LS Retail solutions and drove notable sales success during the previous year.

We at allonline365 take pride in helping our customers digitally transform their businesses with our ERP, CRM, and BI solutions. One of the verticals we focus on is the retail industry and it is with great pleasure that we can assist our customers with cutting edge technology, such as LS Central, to grow their businesses. We will continue to service our existing customers and educate prospects across Southern Africa on the latest enhancements for the retail sector.

“At LS Retail we are incredibly proud of our partners’ business results and honored by their consistent commitment to the LS Retail products and solutions,” says Sigrun Dora Saevinsdottir, Chief Operating Officer at LS Retail. “Congratulations to all of this year’s Partner Awards winners, and a sincere ‘thank you’ to each and every one of our partners. We are proud to recognize and honor allonline365 as LS Retail Gold partner for the special performance over the past year. Through the years, our partner community has shown levels of resilience, collaboration, and dedication that are, I believe, unique in our industry. Our channel is our strength, and as our partners are there for us, we are always there to support them, through the tough times to the sunny days ahead,” says Saevinsdottir.

About allonline365

We are a well-established software solution and consultancy business with years of experience in assisting businesses to adopt systems to help transform their companies. We are partnered with some of the world’s leading software providers to ensure our clients have access to world-class solutions. We operate across many different industries and continue to adopt best practice solutions to take businesses to the next level.

About LS Retail

The LS Retail software solutions are sold and implemented worldwide through a large network of certified partner companies. The LS Retail partner ecosystem has grown steadily over the years and today counts over 380 companies in 88 countries. To become an LS Retail partner, companies need to satisfy a specific set of requirements, including passing official training in the LS Retail solutions.

Certified LS Retail partners are experts in retail and hospitality, as well as in the LS Retail products and solutions. They know the local requirements and legislation of the countries where they operate and offer ad hoc services such as customizations, localizations, project management, and technical support.

Thanks to vast industry knowledge and experience, LS Retail is able to offer solutions to manage the complex operational requirements of organizations within areas such as fashion, electronics, furniture, duty-free, restaurants, coffee shops, forecourt, c-stores and many more.

For additional information, please contact allonline365 via email on info@allonline365.com.