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Op-Ed: 5 Ways to Get Your Supply Chain Omnichannel Ready

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Retailers, brands and manufacturers have spent the past decade focusing on getting their products to market faster, and for the most part they have succeeded. But today’s selling environment has become significantly different than what it was ten years ago, with great pressure to offer an omnichannel experience which fuels an ever-more complex sourcing market.

Add the known challenges like demand volatility, a sped-up innovation timeline, increasing internationalization on one hand and regional differentiation on the other, and most will struggle with siloed systems and processes to tackle these issues. There is also the expectation on the part of consumers that production is both environmentally friendly and socially responsible. Rising production and freight costs, fluctuating raw materials, as well as the emergence of new sourcing markets, each with its own set of risks, only intensifies these initiatives. Be aware, none of these issues can be seen independently and to make this a reality, one needs to take a broader holistic view that addresses not only selling in an omnichannel environment, but also empowers the fulfillment process which relies on a robust supply chain.

“22 percent of North American retailers have merged cross-channel efforts into a single organizational structure instead of separate silos.”?

       2014 Supply Chain Benchmark Study, Boston Retail Partners

It is a reality today that most consumers are always connected, know what they want and believe they should get it immediately from any channel. Retailers have paid a lot of attention to the front-end consumer-facing solutions to find and deliver product to satisfy demand no matter where it is, but they do not always have the inventory. A seamless front-end experience will allow consumers to shop when and how they want. A robust supply chain which includes not only logistics, but also the entire process from plan to pay, means sourcing and delivering goods at the right time and anticipating what consumers want early in the supply chain to have the right inventory to meet the consumer demand at the right price. In addition to the ability to forecast and plan, a retail organization needs to ensure it can execute and fulfill against those plans to protect gross margins.

Omnichannel Requires a Highly Collaborative Supply Chain

Few retailers are able to offer a truly seamless omnichannel experience today and historically the back-end has not been talked about, but it has now come to the forefront. Planning, sourcing and ordering the right product mix at the right time and at the right cost to meet consumer demands and gross margin goals is a must. This requires real-time collaboration with suppliers, trading partners and third party agents and partners throughout the product life cycle to ensure an omnichannel experience.

Collaboration provides a platform to simplify the sourcing process and enables real-time visibility, which is imperative in aligning the omnichannel experience with the supply chain. In turn, sourcing has become a strategic advantage to many retailers as they look at the importance of real-time collaboration with the trading partners and factories to ensure that the inventory mix and levels are in place to meet the consumer demands for their omnichannel initiatives.

A highly collaborative sourcing process can react to an issue in delivery or manufacturing instantaneously to keep delivery dates intact; merchants can view the status of orders with time to delivery to make allocation decisions to fulfill need across the selling channels and make faster decisions based on consumer demand when “in the know.” Together, they can deliver the final inventory into the right channels based on real-time data. Singularly, this is an impossible task at hand. When this collaboration is in place, there is complete alignment on how to deliver the right product at the right time at the right price and always in a profitable way.

The Cloud enables scalability, visibility and real-time management across the globe through the power of the Internet. True collaboration includes all collaborators in the extended supply chain, providing visibility to the goals and milestones across the entire product life cycle to deliver against the consumer demands.

Top 5 Things a Retailer/Brand Needs to Do Now

Going forward, retailers and brands will need to ensure that their design, merchandising, logistics and suppliers are more integrated, process-wise, than ever before, in order to respond quickly to increasingly unpredictable consumer demands and complex markets with targeted product development and sourcing decisions. They will need a carefully selected stable of sourcing regions as well as supplier partnerships setup to provide them with a high degree of control, agility and visibility into the end-to-end supply chain. In order to simplify global sourcing, retailers need to transform by adopting collaboration and becoming more social throughout the enterprise. This will result in a fast friction-free supply chain. The supply chain business processes from plan to pay should be streamlined and integrated on one intelligent collaboration platform in the Cloud.

Below are five key areas that a social enterprise should be empowered to do:

1. Real-time Vendor Management in the Cloud

Retailers need to be able to manage all parties involved in the extended supply chain in real-time, from agents to vendors to factories to raw material providers. Also, from social compliance and technical audits to documentation and certification, all of which needs to be centrally administered through an online vendor portal, providing complete visibility and control over the entire process.

With the ability to collaborate, friction is removed from the vendor and supplier relationships and real-time visibility is provided across the extended supply chain. Sharing relevant data and working closely together will provide the agility and decision making to improve the supply chain deliverables earlier and consistently in the business processes.

A highly collaborative vendor management process will be proactive rather than reactive in working with the parties engaged to create a network of collaborators working on the same set of goals and metrics.

2. Product Management from concept to end of life

It is imperative to create and maintain a centralized and consistent repository of all product data, including detailed specifications down to the material or component level. The product information contained must be up to date.

A collaborative product management repository will provide the ability to find a product and its details quickly, whether for reuse, adaptation or crisis management. It is important that this repository can not only record product information, but track the evolution of the product through its life cycle, from initial concept and planning to adoption and end-of-life state. This occurs by utilizing line lists, product catalogs, and linking related and substitute products together. Designers and product developers will be able to quickly share and streamline their work, eliminating the need to start from the beginning each time.

Being able to have a collaborative approach to product management will enable a single view of all products across the supply chain. This will save time and resources providing greater operational efficiencies.

3. Critical Path Management for total milestone tracking across the extended global supply chain

Complexity breeds planning and execution alignment issues. In expanded assortments and unrelenting customer demands, the enterprise is challenged with keeping track of key milestones to ensure the supply chain delivers.

To succeed, it is important that every collaborator shares the same, complete visibility of the critical path for each product and/or line across the extended supply chain around the globe and across all channels. Complete visibility ensures nothing slips through the cracks with a shared view of critical dates and milestones for the full enterprise – internally and externally. Visibility is required across the extended supply chain from concept to delivery to allow everyone to be “in the know” and to quickly identify issues in meeting deadlines and delivery dates, making informed business decisions and managing by exception. The ability for sourcing and production to assign key milestones and dates for accountability and manage the assigned resources to those dates ensures key milestones are met.

An effective collaborative Critical Path Management tool is contextually sensitive to those participating in the sourcing process and proactively alerts stakeholders with relevant to-do actions and notifications, which enables them to take action proactively to meet on-time deliveries.

4. Contingency plan to react to product issues and compliance

Every company needs a contingency plan in place to deal with procurement, compliance and manufacturing risks, which are out of the control of the retailers in today’s volatile environment. A collaborative platform enables the enterprise to be proactive and able to anticipate these issues before they become a major problem.

The first step is making visible all the collaborators engaged in the business process and ensuring they are in-sync with the critical data or information they need to make real-time decisions. It is of paramount importance that a step or a collaborator is not left out as the entire process is like a chain where no link can break. Reacting to an issue in a timely manner will save time and human error, providing a decision path to resolve the issue and put an alternative process in place. Embedding compliance, testing rules and regulations and monitoring these across the extended supply chain removes the ambiguities and provides assurances that when the product arrives it will neither be held up by customs nor rejected by the end consumer.

Properly laying out the decision owners and escalation processes and alerting all involved in the process in real-time is critical to a company offering a true omnichannel experience.

“Eight in ten retailers mentioned concerns over international operations risks, like managing a dispersed workforce and complying with international laws and regulations.”

      2014 Retail Risk Factor Report

5. Dashboard & Business Analytics

Retail executives need to be able to manage the business with Key Performance Indicators (KPI), exception reporting and analytics through a real-time sourcing management platform.

A collaborative dashboard and analytics platform which provides the ability to track what is most important and relevant for their job/role with actionable visibility and real-time tracking is critical. Use of exception-based reporting will provide the ability to focus only on what is required to move forward saving valuable time; enabling the organization to compress cycle times and reduce inefficiencies. Relevance of the information being provided and context in terms of insight into the business value being derived is a prerequisite to effective decision-making.

Cloud collaboration solutions enable real-time business intelligence, providing access to the data throughout the extended supply time through scalability and agility across the global enterprise.

As consumers adopt new technologies and channels to guide their purchases, retailers and brands will have to implement new processes and technologies to survive and thrive. Maintaining a sustainable competitive advantage and mastering omnichannel will not be easy, with an ever-changing vendor landscape, new quality controls and regulations and constantly shifting consumer expectations in engagement. The winners will be those progressive retailers and brands that establish collaboration throughout their extended supply chain and enable the most integrated, efficient and effective processes. The processes and supporting tools will need to support multiple product categories, brands, channels and lines of business, and all collaborators throughout the critical path will need to be equipped to deliver an omnichannel fulfillment strategy. The ability to collaborate in a single, real-time and responsive way can only be delivered with a Cloud based solution.

 

About the author:

Nicholas Tsiroyiannis leads CBX Software’s Product Management team. In this multifaceted role, Nicholas is charged with shaping CBX by taking into account user feedback, industry research, analyst insight and CBX’s strategic vision for Total Sourcing Management. An electronic engineer and computer scientist by training, his professional background is in implementing and designing enterprise grade supply chain management and PLM solutions. 

About CBX Software:

CBX Software has simplified the business of global sourcing; transforming traditional methodologies into fast, friction free supply chains through our real-time cloud based Total Sourcing Management Platform (TSM).  We help retailers, brands and manufacturers manage and empower the supply chain from plan to pay – one intelligent collaboration solution for an enterprise to plan, spec, source, assure quality, order, make, inspect, ship and pay. Over 20,000 users in more than 30 countries rely on CBX including: Target, Safeway, Kmart and others. Visit us at cbxsoftware.com, follow us on Twitter at @cbxsoftware, like us on Facebook and visit our LinkedIn page.

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