Supply chains fit for e-commerce growth
The rise of multichannel selling is also placing new demands on retail supply chains, according to supply chain specialist Markus Schmücker
Markus Schmücker, managing director of supply chain solutions at supply chain outsourcing partner arvato UK & Ireland, explores the sophisticated techniques retailers are employing to meet raised customer expectations.
“The
option of hopping between multiple web shops and ordering on the go from a
mobile phone has made online shopping effortless,” he said.
“Consumers
want the same flexibility and immediacy they experience when they shop to
follow through to delivery. The upshot is this has dramatically raised
expectations for fulfilment and placed unprecedented pressure on the supply
chain.”
Sophisticated
supply chain demand
What
this means for retailers is the need to establish a joined-up and very
responsive supply chain that can account for individual preferences and offers
right first time delivery.
Schmücker
explained: “Choice has become king. Providing a broad range of delivery options
– including instore pick up and city centre collection points as well as
traditional home delivery – is becoming standard. To be effective this needs to
be backed by efficient order tracking and clear communications. That’s why
we’re seeing more and more retailers form partnerships with distributors who
have links to a wide range of carriers.”
He
said heightened consumer expectations are undeniably having an impact in the
warehouse too, pointing out that, with a large numbers of disparate orders to
deal with, end-to-end visibility of the inventory has become key.
“The
trend now is for retailers to hold larger pools of centralised stock – rather
than multiple, smaller locations - and to integrate all warehouse management
processes through a single inventory,” Schmücker said. “When used with
innovative IT, such as voice picking technology, which calculates the best
route for the picker and confirms if the items were selected correctly, this is
helping to streamline the whole order to invoice process, through to pick, pack
and despatch. The result is quicker turnaround times, immediate quality checks,
increased accuracy and ultimately better customer service.”
But
delivery is only half the battle in trading online. The supply chain expert
warned that the same pressures exist with reverse logistics.
Streamlining
returns processes
“With
returns there’s a similar story, due a greater number of channels and wider
regional and geographical distribution,” he said. “Again, intelligent
infrastructure that unifies the process will help better manage returns.
“What
we’re seeing from forward-thinking suppliers is the introduction of technology
to all carriers that can scan the product code to bring up a picture of the
item and corresponding instructions to determine subsequent handling. Depending
on their condition, products can then be returned to sale stock, refurbished
and transferred to online outlet sales, or returned to the manufacturer, and
refunds can be made to the customer in a timely and accurate manner.”
Schmücker
believes that where many retailers are failing is in not making the most of the
valuable data generated at the point of return.
“Data gathered from returns presents a major opportunity to better inform distribution decisions,” he concluded. “Capturing intelligence from returns slips or online questionnaires enables processing errors to be quickly identified and corrected, and decisions to be taken as to whether different delivery services might be more appropriate, to encourage repeat sales.”