Transformation of the Supply Chain around retail, omnichannel and unified trade

23 December 2020

In recent years, the advent of digital technology and changing consumer trends have led the Supply Chain to undergo profound changes. Before this transformation, we could observe two sales models, with multi-channel retailers on one side and pure e-commerce players on the other. Today, these two models are also undergoing a transformation: they are blending together to create a brand new model, the omnichannel model. Multichannel retailers are becoming omnichannel, and pure e-commerce players are expanding their product lines by partnering with marketplaces. The goal of combining these two sales models is to win over more and more customers, while placing them at the heart of their strategy (customer centric) by offering them reduced order processing and delivery times. These promises create greater logistical complexity, forcing the Supply Chain to adapt by transforming itself into a multi-channel model.

Preparing its omnicanal transformation

Preparing its omnicanal transformation implies understanding that one must involve one's company as a whole so that the change can be carried out in an optimal way. You cannot carry out an omnichannel transformation in only one part of your company, because they will all be impacted by this change. If a service turns out not to be ready, your transformation will not be successful and may even serve you.

You need to perform your multi-channel transformation guided by three questions around customer centric:

  • What kind of customer experience do you want to offer? You will need to redesign your customer experience to put your customer even more at the heart of this process. You will then have to help you with their consumption habits, but also with their environment, which can influence their tastes and the way they consume,
  • What services will you offer? The omnichannel transformation is characterized by the implementation of an ever more personalized customer experience. The services you will offer your customers will have to be as close as possible to their expectations in order to provide them with optimal satisfaction,
  • What relationship do you want to develop with your customers? When you develop new sales channels, you offer a new experience to your customers that will change your relationship with them. You will have more tools at your disposal to reach your target, but the multiplicity of these tools could create a distance between you and your customers. You will then have to think about the right strategy to adopt in order to reach your customer relationship objectives.

Before making your omnichannel transformation, you will need to start by auditing your current model:

  • Map the channels your company currently uses: you will have to decide whether to keep them or not, depending on the profit or loss they generate,
  • Revisit your back office: it will allow you to manage your purchasing paths. It is necessary to start by unifying all your back office processes, in order to be able to manage all the purchasing processes of your different channels, for a simpler use, without the risk of creating duplicates,
  • Identify the financial stakes: the deployment of new sales channels leads to the appearance of new expenditure items for your company, generated both by the implementation of these new channels and by the behavior of your customers,
  • Check the power of your computer system: setting up several sales channels involves more data to be processed. You will therefore need to have a powerful enough IT system to manage both the infrastructure of your new sales channels and all the data generated by your customers.

The most important process of your omnichannel transformation is to transform both your supply chain and your logistics. You will have to lead a physical and organizational evolution of your flows, while remaining vigilant because it is a complex transformation to lead. This development will have to start with a geographic redistribution of your sites. Indeed, with the establishment of multiple sales channels, your inventory and order management will be upset by the changes. It will therefore be strategic to set up a central site, piloting your other sites, specialized by sales channel. This will allow you to better manage the influx of orders on your different platforms, optimize order processing and group shipments. The reorganization of your Supply Chain and your logistics chain will have to be carried out according to criteria that you will have defined, corresponding to the objectives and needs of your company.

Putting the warehouse at the heart of its global strategy

When implementing an omnichannel strategy, the warehouse becomes a strategic location, just as important - if not more - as the store. You will now carry out logistics operations previously carried out only in stores. Your warehouse is no longer just a storage place for your products to supply your stores, you now prepare your customers' orders, manage parcel returns, etc.

It is important to reorganize the space in order to make it operational for the various agents who will be responsible for preparing the packages for your customers. To improve their productivity, you can use automation, mechanization and robotization tools. Your best ally will prove to be a complete inventory management software allowing you to manage the stocks of your different products, replenishments, but also the customer order process (preparation, shipping, etc.).

The management of returns is an important point of your omnichannel strategy, you will be able to observe an upsurge in product returns, which your agents will have to manage. Your objective will then be to have a good management of these returns, but you must first of all identify the problem at its source, in order to reduce this quantity of returned products. Thus, your agents will be able to fully devote themselves to order preparation, and you will significantly increase the level of customer satisfaction while retaining your new customers.

Equip yourself with tools for unified commerce

As mentioned previously, to succeed in your omnichannel transformation, you will need to rely on intelligent tools to manage your Supply Chain in a unified commerce context. Indeed, the value of your business from the point of view of your customers lies in your supply chain, the main factors of satisfaction being a preparation and a fast and error-free delivery to the desired place. You will therefore need to use the data at your disposal in order to offer your customers a solution adapted to their needs.

For this, you will need to use information systems capable of managing a lot of data, in order to be able to analyze and adapt your Supply Chain to unified commerce:

  • OMS (Order Management System) software: this order processing software gives you a complete view of all your products and orders from entry into stock to dispatch to your customers,
  • The concept "End-to-end Supply Chain visibility": this concept involves the connection of your Supply Chain with your carriers in order to have total visibility on all your operations and thus facilitate the collection of information to optimize delivery rounds ,
  • Warehouse Management System (WMS) software: Warehouse management software, or inventory management software, allows you to automate your processes. Connected to robotic tools and thanks to digital learning, they allow your warehouse operators to use their tools more easily and be more efficient and faster on their sites,
  • Predictive analysis: thanks to the data collected by your information systems, you have the possibility of better forecasting order volumes, in order to optimize your Supply Chain to always better respond to demand,
  • LMS (Labor Management System) software: this software allows you to improve the management of your agents by automating the scheduling and by reallocating the human and material resources of your warehouse to the positions that require the most attention.
  • TMS software (Transport Management System): TMS software allows you to manage your transport, providing you with traceability over the entire process. You will be able to manage your deliveries from dispatch to receipt of the order by the customer including the transfer of responsibility and the contractual discount. This allows you to optimize your deliveries by fully controlling the processes, and saves you considerable time.
  • Many software will allow you to manage your deliveries from your point of sale, especially if you carry out click and collect or even ship from store.
  • For your home deliveries, digital solutions exist to help you manage your urban hubs, and optimize your routes in urban areas. In particular, they will allow you to manage reverse logistics and the return to warehouse of logistics units.

Transformation of the Supply Chain around retail, omnichannel and unified trade

The plan to transform your business towards an omnichannel model must therefore be carried out across all your logistics and supply chain processes, in order to optimize all your sites and processes. Using smart process automation tools and smart inventory or order management software is essential if you want to achieve this transformation in the short and long term. It will indeed be necessary to equip yourself with a Smart Supply solution to have a global approach to your Supply Chain.

You want to know more : Contact the Monstock team

Sign up for our newsletter today