In this session we will start talking about how to build a consistent Omnichannel Supply Chain Logistics & Distribution Setup.
Conventional Supply Chain Logistics & Distribution are coming under considerable pressure.
The demand for ‘anytime, anywhere, from any device’ (it means more frequent redefinition of the requirements) service and use of new technologies extend the range and breadth of consumer choice.
In the table below you can see an example of the evolution of Supply Chain Logistics & Distribution Setup I have experienced during last years of my professional career.
Basic Logistic Setup
I have started from a basic approach where the core of the operations was the centralised distribution centre.
In this set-up all production orders were incoming on a bi-weekly basis.
That was a traditional PUSH SYSTEM.
The goods were distributed to stores, regional distribution centres and wholesale clients based on plans or purchase orders.
Integrated Logistic Setup
The further step was to build the setup in order to support the actual needs from stores to govern the goods flow.
In this second approach the Distribution is no more based on plans but on actual inventory needs at store level.
The setup was moving towards a PULL SYSTEM. It was an integrated approach with all the elements of the infrastructure to be connected and aligned.
eCommerce / Omnichannel Supply Chain Logistics & Distribution Setup
The last step of the infrastructure evolution is the eCommerce and Omnichannel approach.
In this environment, the client liaises directly with all the elements of the logistics infrastructure.
In case of eCommerce the end consumer places orders based on inventory sitting in the local organisation, receiving ordered goods from the closest warehouse and returning if eventual products are not needed or failed.
The setup is evolving from pure offline towards online retail.
The stores are fully involved in the distribution towards the final client. Also their inventory is part of the stock the final client can have access and order.
A further evolving approach, Omnichannel Supply Chain Logistics & Distribution Set-up is becoming a key requirement for the future.
By the way, cCommerce Distribution is not only a first level of Omnichannel, but a mandatory requirement for further evolution.
Technology trends already on the Supply Chain agenda include data analytics, Internet-of-Things (IoT), and automation. As organisations move towards Omnichannel, they can leverage these new capabilities.
Companies must rethink existing Supply Chain Logistics & Distribution Setup and, infrastructures and network strategies.
The Goal is to adopt a far more active role in managing and delivering the consumer promise.
In the next session we will see how to design a successful Omnichannel Supply Chain Logistics & Distribution Setup, detailing all most relevant key elements.