How can distributors create an omnichannel supply chain?
Manufacturers need to be aware of the impact of omnichannel on their operations so they can determine what additional functions they'll need in three specific areas.
E-commerce has had a dramatic impact on sales and distribution in virtually every industry and product category. The move to online buying and selling is particularly challenging for manufacturers in traditional B2B markets and those that distribute primarily via the retail supply chain.
These manufacturers have been structured and positioned to ship cases, pallets and containers of products to distribution centers and retail locations. Today, virtually all of these manufacturers must also work toward creating an omnichannel supply chain -- taking orders and shipping products directly to end-user customers -- while simultaneously maintaining the same level of service to bulk-ship distribution resources.
The exponential complications of omnichannel
In an omnichannel supply chain, manufacturers must deal with multiple representatives and agents; stocking distributors and non-stocking distributors; demand types; picking, packing and shipping processes; and billing and collections mechanisms.
Accommodating an omnichannel supply chain
Manufacturers and distributors aren't typically prepared to handle direct-to-consumer or other nontraditional channels. Therefore, virtually all their systems and processes must be extended to accommodate these new requirements.
In particular, manufacturers and distributors need to look for additional tools or functions in the following three areas:
- Order management to handle multiple units of measure, such as a case or pallet with multiple price lists, discounts and
- Pick, pack and ship to accommodate bulk cases and pallets and mixed orders of individual units, which likely require additional pick and pack equipment and facilities, as well as building new relationships with parcel delivery services such as FedEx, UPS and the U.S. Postal Service.
- Planning and inventory to plan, produce and stock enough inventory to meet the various demands. This may be the most challenging requirement. For example, many manufacturers have struggled for years with spare parts inventory availability, and adding multiple channels makes this even more difficult. However, CRM and order management software developers have taken up this challenge and are continuing to improve their systems in this area.
