Touch practically any flat, glass surface these days, and it’ll probably light up and ask you for your Facebook login information. Digital devices are becoming more common and more useful all the time, giving today’s consumers an unprecedented power to buy. Whether online, at a brick-and-mortar store, or over the phone, demand is coming from every conceivable channel. For the supplier, it means weaving those disparate, often unconnected channels into a coherent, functioning system is an art unto itself.
If you’ve been reading any of the thought pieces coming out of our buzzword-obsessed business culture, you’ve probably guessed by now that I’m talking about omnichannel. It’s a word that gets tossed around a lot in the supply chain logistics industry, and more often than not, the effect is to exclude people from the discussion instead of involving them in it. Rather than really inform people, many writers prefer to keep their readers at arm’s length, using vague but urgent language to shroud themselves in an air of mystery.
But the need for omnichannel really is urgent. It’s not another trend; it’s a vital tool for retailers who need to meet the demands of a consumer base that’s becoming more and more difficult to please. So let’s start with the very basics: what do we mean by omnichannel?
For the average American consumer, there are practically countless ways to buy the exact same thing. For example, if you’re looking to buy a particular hat, you can walk to the store and purchase it there. You could also order that same hat online by pulling out your laptop, desktop, tablet or smartphone, you could purchase that hat on an endless variety of screen sizes and resolutions, and you could probably have it on your head by the next day.
For the consumer, this is a world of limitless opportunity and discovery. For the retailer, it can be a nightmare.
That’s because no matter how the hat is ordered, it eventually has to get from Point A to Point B. If a customer picks up the hat in-store, that’s no problem: you have a certain amount of hats in stock, and the customer takes one of them. The math is simple enough. But if a customer orders the hat online and wants to pick it up later at the store, that’s another equation altogether.
If the hat ordered online isn’t already part of the store’s inventory, the supply system must communicate with the distributor so that it knows to deliver the hat to the store in a timely fashion, all while managing other existing orders. This already-complicated action begs more questions: was the truck already going to deliver hats? Does this hat that was ordered online “count” as part of this outstanding order, or is it a separate transaction? If people are buying hats, should we order more hats? How many more?
What if the distributor is out of that particular kind of hat, but another nearby store does have it? Well, that store now has to function as a distributor, so can you get a truck to deliver the hat to another store without wasting resources? Perhaps the customer is dissatisfied with the item and returns it. But from where? Do they ship it? Do you provide mailing labels? Does that hat count as new inventory? How is all this information shared between separate systems? It all starts to sound like an endless, worst case scenario math problem on a high school test.
To put it as simply as possible, omnichannel is the art of making all of those employees, locations, and systems automatically work together.
That means taking mobile, in-store, catalogue, supplier, delivery center, inventory, truck (owned and rented) and mail carrier, and presenting them as a single, integrated solution.
Network of Networks
Just for kicks, let’s add one more layer to the supply chain mix. You may have heard of the “Internet of Things.” Suppliers normally use a lot of inanimate things in their daily operations: trucks, freezers, phones, rooms, boxes, lights, and desks. But now, all those things can talk to each other, thanks to embedded sensors and computers.
At every stage of the supply process, these “smart” items are churning out a vast encyclopedia of garbled data. Every piece of information, from the temperature of a freezer, to the speed of a truck, to the location of one particular forklift within an almost endless warehouse, is digitized and catalogued. The ability to codify and make sense of all that raw data is what now separates the major players from everyone else.
Will finding the most efficient route for a forklift to travel through a warehouse really make a difference? If you have a sense of the scale of logistics (and the time over which they operate), you know exactly how important details like these are especially when they start adding up.
Finding the Thread
But taking these disparate data streams and transforming them into a single, comprehensive and workable system – one that the average employee can learn in a week – seems practically impossible. It will undoubtedly take more than one person: a whole fleet of interchangeable, diversified and modular pieces must come together to make a workable whole.
This kind of detailed coordination is what separates omnichannel from simply changing how your orders, warehouses and transportation operations are managed. Rather than simply trying to coordinate the supply chain in the most efficient manner possible, omnichannel is about ensuring that these interacting systems manage one another.
There’s a pronounced operational (and financial) difference. In no uncertain terms, omnichannel is revolutionizing the end-to-end supply chain process, vastly improving your bottom line. People like to think of technology as just a button to push – but more than anybody, supply chain operators understand the blood, sweat, and tears that go into making those systems work.
The real trick is partnership. To leverage truly omnichannel operations, suppliers will have to work with leaders in the evolving world of digital transportation to become the proactive, nimble, and fluid companies that will dominate their industries in the coming century. Whether or not you think your operations are this sophisticated, it’s what your customers have come to expect.
Bill Ashburn is the Chief Marketing Officer of HighJump, Inc. where he has led company-wide messaging, branding and strategic marketing architecture, to establish and refine HighJump’s market-facing profile following their merger with Accellos, Inc. in 2014. He has defined HighJump’s image as an emerging industry leader as the company has continued to grow globally.
Bill spent 30 years in the Transportation & Logistics Industries as the co-founder of Prophesy Transportation Solutions, (now a HighJump product). He joined HighJump in 2008 as Senior Vice President of the Transportation Management product line. Under his guidance the Prophesy product line has provided industry leading transportation software solutions to the Supply Chain Industry since 1986. Today, more than 10,000 SMB and mid-market transportation companies have implemented a HighJump solution to successfully manage and grow their businesses.