how to avoid order fulfillment disasters part 2
TRANSCRIPT
How to Avoid Order Fulfillment Disasters Part 2: Top 5 Omni-Channel Areas to Improve
By Angela Carver
Why Is Order Fulfillment Important?
• For many Big Box retailers and e-commerce businesses omni-channel order fulfillment is a key differentiating factor that captures new business and retains loyal customers.
• Customers are more likely to remember and share negative experiences about your business’ service than they are positive.
• Effectively managing order fulfillment is one way for your supply chain operation to leave retail customers with positive feelings.
What Are You Trying to Avoid?
• Major retailer Best Buy was forced to cancel a large amount of customer orders during the 2014 holiday season due to ineffective inventory management and poor omni-channel retail order fulfillment.
• Customers were livid when they received the short notice cancellations from Best Buy and took to the web to air their grievances. Although company executives attempted to remedy the situation afterwards, customers had already decided to abandon shopping with the top electronics retailer.
• Losing loyal customers is the worst nightmare for any business. Implementing the proper technology to increase supply chain visibility can help to reduce the likelihood of order fulfillment disasters like this.
Don’t let this be you.
http://www.enterrasolutions.com/2012/01/order-fulfillment-potential-source-of-embarrassment.html
Develop Your Omni-channel Retail Sales Channels• As omni-channel retail becomes more prevalent, consumers are being
affected more and more by the growing pains of their favorite Big Box retailers.
• Many retailers are making the mistake of rolling out new omni-channel sales channels before they have been through a vigorous testing program. This leaves consumers to suffer from any existing bugs or deficiencies.
Develop Your Omni-channel Retail Sales Channels• Before your retail operation opens a new omni-channel sales channel it is
important to test the efficiency and effectiveness of that channel, the supporting automated data collection network and supply chain management software.
• Can your suppliers provide real-time inventory counts? • Can they deliver on-time and accurately? • Can they handle an increase in orders from this new channel?
• Do the research and fully develop each sales channel network before making it available to consumers. This new found reliability will help to increase customer satisfaction and loyalty.
Increase Supply Chain Visibility
• Many homegrown, legacy or paper-based inventory management systems do not offer businesses accurate insight into how the supply chain operates and what inventory is currently on-hand, in transit or being returned.
• When performing order fulfillment through multiple interactive sales channels, it is critical to have accurate inventory counts at all times. This was an issue in the Best Buy case.
• Implementing warehouse management software that can provide visibility into inventory at any stage in the fulfillment and storage process can help to improve procurement efforts, reduce out of stock scenarios and optimize reverse logistics.
Analyze Retail Sales Patterns Often
• Increasing supply chain visibility will also give your team better insight into omni-channel retail sales patterns that affect inventory levels and flow through rates throughout your facility.
• Detailed information on cyclical retail sales patterns from your warehouse management system will help your procurement staff to ensure that the proper level of inventory is on-hand. Maintaining a just-in-time (JIT) inventory replenishment model will help to reduce inventory holding costs, savings that can be passed on to your customers.
• Utilizing data on sales patterns also helps to prevent out of stock situations like those experienced by Best Buy.
Evaluate Transportation Vendors & Capabilities• Constantly evaluating transportation vendor compliance plays an
important role in avoiding order fulfillment disasters. As the last mile delivery provider for your supply chain network, your transportation partners have a direct impact on the satisfaction level of your customers.
• Deliveries that are late or damaged not only reflect poorly on the transportation company, but also on your supply chain operation as well. Closely monitor recorded complaints about late or damaged deliveries to see trends in poor service.
Evaluate Transportation Vendors & Capabilities• If transportation partners are not performing to your expectations or are
not capable of meeting your needs it is important to consider using other vendors. Perform evaluations often to help ensure your customer receive the best service possible.
*69% of surveyed participants reported they are less likely to shop with a retailer in the future if deliveries are late by more than 2 days.
http://www.supplychainbrain.com/content/single-article-page/article/customers-unforgiving-when-deliveries-late-incorrect-especially-during-holidays-study-says/
Less Likely to Shop Unaffected
Improve Reverse Logistics
• The ease of item return is also a critical component in the order fulfillment experience. Customers now expect both fast and accurate omni-channel retail fulfillment and easy, budget-conscious returns.
• With a fully integrated warehouse management software system, your warehouse or distribution center can utilize reverse logistics functionality to track shipments back to your facility and unpack and put away those items efficiently. This will help to reduce the hassle for consumers and optimize the returns process.
• Real-time inventory visibility can also provide your customers will access to returns processing information if need. This will help to provide a positive order fulfillment experience for your customers rather than the disasters seen by many.
Conclusion
• Order fulfillment cycle time and accuracy plays a significant role in the complex omni-channel retail buying decision.
• Properly analyzing and identifying retail customer expectations can help your supply chain business to select the proper inventory management technology needed to develop sales channels, improve supply chain visibility, manage inventory levels, select the best transportation vendors and process returns.
• All of these factors affect the buyer experience. When executed properly it can create deeper feelings of customer loyalty, increasing future sales potential.
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