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Sponsored by:
Omni-ChannelFu l f i llment in a
Changing
Retai l WorldPresented by:
Dave Lodwig
System Manager
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In omni-channel fulfillment, all the resources of the supply chain are
focused on transparently serving a single shopper who has placed a
single order. Traditional warehouses are not designed to handle the
omni-channel consumers orders. To meet the challenges of omni-
channel fulfillment, retailers must redesign their distribution processes
and add automation equipment to their DCs.
Key Takeaways
* How to meet the challenges of omni-channel fulfillment
* Automation needed to meet omni-channel fulfillment requirements
What You Will Learn
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Agenda
What is Omni Channel distribution and how
is it different from traditional retail
distribution? Order types and shipping channels
What do you need to do Omni Channel
efficiently?
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Omni Channel Retailing
Omni-Channel Retailing is the evolution of multi-channel
retailing, but is concentrated more on a seamless approach
to the consumer experience through all available shopping
channels, i.e. mobile internet devices, computers, bricks-
and-mortar, television, radio, direct mail, catalog and so on.
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Retail Supply Chain Evolution
Retail Orders
1970s-1990sSingleMulti
Cross
Omni
Seamless?
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1990s - 2010Single
MultiCross
Omni
Seamless?
Retail Supply Chain Evolution
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Retail Supply Chain Evolution
2010 - 2012Single
Multi
CrossOmni
Seamless?
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2010 - 2012Single
Multi
Cross
OmniSeamless?
Retail Supply Chain Evolution
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Retail Supply Chain Evolution
Complexity
20151995 2000 2005 2010
11
31
51
6978
Internetusers
per100
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Omni Channel Impacts on
Retail Distribution
Pick any type of order from one inventory and ship
it through any channel
Order Types
Retail Consumer
Wholesale
Shipping Channels Retail (TL, LTL, and Parcel)
Consumer (Parcel)
Wholesale (TL, LTL, or customers carrier)
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Order TypesRetail
LowMedium no. of orders
MediumHigh no. of lines/order
LowMedium no. of units/line
Consumer MediumHigh no. of orders
Low no. of lines/order
Low no. of units/line
Wholesale
LowMedium no. of orders High no. of lines/order
High no. of units/line
Omni Channel Impacts on Retail
Distribution
Shipping ChannelsRetail
Parcel
LTL
Truck load
Consumer Parcel
Wholesale
LTL
Truck load
Pick up
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The Co$t Of TheComplexity
Omni-channel distributioncreates Omni-Processes
Complexity creates more
challenges
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Key Performance Issues
Service levels and on-time shipment Orders received by 12 PM or later shipped same day
Inventory accuracy and order fill rate
98+% accuracy Fill rates need to be as high as inventory
Order accuracy 99+% every time
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Operational Changes
Inventory/Customer
visibility
Real time inventory: Do
you have it in stock?
Location of inventory:
Where do you have it? When can the customer
get the product?
Service levels
Reduced time to ship
orders
Easy returns
Order Picking & Packing
Less time to complete
orders
100% accuracy every time
Forces smaller batches
More Value Added Services
Shipping
Provide more real time info
Carrier management
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Visibility
Information systems are omni-channel:
Inventory Distribution center inventory
Retail store inventory (need to react to eCommerce orders real time)
Order completion time When will the order be completed (sometimes time is dictated by consumer)
Order completion time
Delivery Pick up time and date
Carrier tracking information
Whenever Wherever Whatever
I want i t and I want i t now !
Where is my stuf f?
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Inventory
Your inventory in all channels must be merged into one Distribution center and retail inventories are not mutually exclusive anymore
Is it available on-line?
What retail stores have the product closest to the consumer
Retailers can leverage their retail store presence and inventory You have to be 100% accurate or consumer will be lost
If you manage the inventory right and communicate with the consumer you may be able to hold less
inventory
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Service Levels
Todays consumers want product from any one of yourchannels as fast as possible
The amount of time that you have to pick, pack, and ship an order
will only become less over time Today you only have approximately 4 hours to pick, pack, and ship an order
Same day delivery will shorten the window more
You have more channels to send it through Consumer orders can be sent to your or other retail locations
Today they can be sent via parcel carriers, but cost will eventually force these
orders to be merged with retail store shipments
Returns
Need to be dealt with quickly and efficiently Consumer wants credit and or new merchandise right away
Resellable product should be returned to stock ASAP
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Order Picking
Less time to complete orders Can force smaller batches/waves
Makes batching more difficult and time consuming
(relatively)
100% accuracy every time
Errors are inevitable, so you need to account for and manage
them efficiently
Forces smaller batches
Waveless or dynamic wave transition
Could a manual operation be efficient enough?
Packing
Personalization and gift wrap
Brand specific boxes and collateral
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Shipping
Order Picking & Packing
Less time to complete orders
100% accuracy every time
Forces smaller batches
More Value Added Services
Shipping
Provide more real time info Shipment time stamp
Specific carrier and tracking info
Multiple accounts (drop shipping with a another companys carrier account)
More carriers UPS, FedEx+, USPS, USPS servicers,
Regional carriers and couriers
Cost reduction Pressure to reduce costs due to free shipping
Same day shipping
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Automation Efficiencies
Inventory
Warehouse Control System provides real time up dates Heartbeat of the automated systems: Manages all the data downloaded
from Host/WMS
Runs all the people and automation to fulfill orders
It can provide more granular detail during the fulfillment process
The information needs to be given to the Host/WMS for determining consumerinformation
Automated storage and retrieval allows faster access to inventory Shorten time to inventory
Service Levels
Shorter order cycle times can help shorten response times
Benefits smaller batch environments Easier to prioritize orders and send the most important to the front of
the line No physical management required
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Automation Efficiencies
Order Picking
Shortens order cycle times
More accurate
Frees up labor for manual tasks
Easier to manage
Can be integrated with packing automation to create large labor savings
Shipping
More flexible and productive
Handles the complexities of 3rdparty billing easily
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Increase the speed of discrete order picking
RF, Voice, Pick-To-Light,
Batch picking
Pick the units for many orders at one time Requires a second step to sort them out into discrete orders (consolidation)
The secondary sort can done manually
(assisted with automation) or with a unit sorter
Put System Used when many orders contain the same SKU(s)
Feed the system with full cases or pallets
Order Picking Automation
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Consolidation ConsolidationConsolidation
Order Picking Automation
Batch Picking Areas
Medium
Movers
Slow
Movers
ManualPacking
Semi-Automated
Packing
Fast
Movers
AutomatedPacking
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Shipping Automation
Productive
Easily handles 3,0005,000
packages per hour
Handles almost any type of
product Cartons, bags, envelopes
Shipping software integration Fully automate the rate shopping and
manifesting function
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Automation
Route
Sort
BalanceOptimize
Link
Link
Connect
ExchangeSync
Operation
Plan
Predict
ManageControl
Business
Dashboard
Report
Statistics
Receive
Put-away
ReplenLocate
Pick
Pack
Ship
Move
Warehouse Control System
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For More Info rmation :
Speaker email: [email protected]
Website: www.whsystems.com
Or visit MODEX 2014 Booth 4726