WMS: The Key to Success in the Era of Multichannel Distribution
Published on 9 February 2023
At the height of the Covid pandemic, commentators were a dime-a-dozen who argued that the sudden rise of eCommerce signaled a deep and permanent change in how customers would procure goods from now on. To hear some tell of it, brick-and-mortar stores were all but doomed to become a thing of the past, unable to compete with the obvious advantages of online shopping.
Things, however, didn’t exactly turn out like that.
Now that Covid related restrictions are a thing of the past, customers may once again go about their business however they prefer—and their preferences, to be sure, still very much include going to their favorite shops and grocery stores. As a result, statistics now show that, over the last two or three quarters, the rise of eCommerce has been stagnating in almost every sector when it’s not slowly regressing.
As it turns out, it looks like Covid did not make brick-and-mortar stores obsolete after all. That being said, although eCommerce isn’t likely to supplant traditional channels any time soon, its persisting popularity can no longer be ignored by companies striving to grow and solidify their market share.
To lead the competition in this era of multichannel distribution, companies will need solutions that enable them to implement warehouse management best practices. No matter the strategy they opt for, all will need the same key to unlock true omnichannel efficacy: a Warehouse Management System (WMS).
The Challenges of Multi-Channel Fulfillment
Multichannel operations face challenges different from the ones online retailers have to deal with. For instance: A small- or medium-sized eCommerce business with a limited set of SKUs can efficiently manage activities in the warehouse with the use of spreadsheets and its ERP system’s warehousing capabilities. Multichannel operations, on the other hand, don’t have that luxury. Even with a limited set of SKUs, a company that distributes its products across two or three sales channels cannot hope to unlock the efficiencies it requires to compete with paper-based workflows.
Let’s take a look at some of the warehousing management challenges that specifically threaten multichannel operations.
Complex Order Fulfillment Processes
With many sales channels come a variety of order types. Orders destined for brick-and-mortar stores, regional distribution centers, 3PL facilities, and individual consumers greatly differ in number of order lines, item quantities, ordering schedule (D2C orders can come in at any time), packaging & shipping requirements, etc.
The efficient fulfillment of different order types calls for different fulfillment strategies. Picking methods and material handling equipment will differ whether the order comes from a corporate client or is destined for a single household. An operator must have the ability to adapt their processes to their sales channels.
In multichannel operations, order fulfillment efficiency hinges on a company’s capacity to:
- Maintain accurate visibility on inventory in real-time
- Design and implement adapted workflows
- Dynamically assign tasks to workers (e.g.: modify assignments as new D2C orders come in, task interleaving, etc.)
- Closely monitor activities and the movement of goods in the distribution center
- Consistently enforce fulfillment rules across all channels.
Naturally, spreadsheets won’t cut it.
Manage Customer Requirements and Expectations with a WMS
Selling across many channels means having to comply with a larger variety of customer requirements. Different corporate clients can have different labeling, packaging, and shipping requirements. Meanwhile, some individual customers may want expedited shipping while others are willing to wait the extra day or two.
Consider, also, compliance with FDA and/or varying State regulations across a large distribution network (e.g.: labeling requirements for alcoholic beverages). To consistently comply with all those requirements and avoid costly returns, companies have to implement rigorous inventory management processes. This, however, exceeds the capabilities of even the better ERP systems out there.
Meanwhile, companies must also adapt to their customers’ expectations. Today, most consumers—both corporate and private—expect inventory status to be visible online and to receive back-in-stock alerts, all of it in real-time. Short of an integrated software architecture that relies on inventory data updated in real-time, companies will be unable to meet such expectations and risk losing customers.
Leverage a WMS to Master Reverse Logistics
It’s one thing to manage distribution across many sales channels at once, another to efficiently manage reverse logistics across all of them. Failure to do so can lead to inventory shrinkage, encumbered aisles & docks, and other operational penalties that will quickly eat at a company’s margins.
To avoid the operational penalties that come with inadequate return processes, companies must be able to:
- Track all items at every location
- Direct employees as to the proper handling of returned items (from the docks to putaway)
- Immediately adjust inventory levels
WMS: The Key to Omnichannel Efficacy
The aforementioned operational challenges are just a sample of the obstacles that lie in the way to true omnichannel efficacy. Nevertheless, they make it amply clear that manual processes, spreadsheets, and a basic software architecture won’t be enough to run a successful multichannel operation.
Many systems and applications are required to achieve omnichannel efficacy (ERP, LMS, TMS, eCommerce/PoS platform, etc., to which manufacturers will want to add an MES and an MRP). However, none may be as crucial as a WMS. Simply put: short of the right WMS solution at its heart, no software architecture can unlock the efficiencies required to overcome the challenges mentioned above.
Only with the right WMS can companies:
- Maintain accurate and detailed visibility on inventory in real-time
- Design and implement channel-adapted workflows across the distribution center
- Optimize task assignments and efficiently guide workers on the warehouse floor
- Define and consistently enforce rules for customer requirement compliance and well-organized reverse logistics
Through proper integration, a WMS enables a company to rely on accurate data across all systems. This empowers multichannel operations to implement inventory management best practices (e.g.: Available-to-Promise strategies), greatly improve their back-office processes, stay ahead of the demand signal, and satisfy their customers’ expectations by relaying relevant inventory information in real-time.
Learn more about SOLOCHAIN WMS
At Generix Group North America, we provide a series of solutions to create efficiencies across your entire supply chain. Our solutions are in use around the world and our experience is second-to-none.
We invite you to contact us to learn more about our warehouse management solutions.
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