The exponential growth of e-commerce in 2020 has brought peak-like levels of order volume for many retailers since as early as March. Looking to the quickly approaching actual peak season, volumes are predicted to hit unprecedented levels, and carriers have been warning shippers for months to expect capacity crunches, increased surcharges/fees and other challenges.
Shippers must overcome these challenges without sacrificing customer service, competitive pricing or margins to be successful and satisfy consumers, who still expect free shipping, fast delivery and full transparency. For many, that means getting more agile by expanding fulfillment and customer service capabilities so they can prepare in different ways, better manage partners and contain rising costs without sacrificing performance. How quickly and easily this can be achieved depends largely on how well a shipper’s mission-critical fulfillment technologies have been integrated to work cooperatively.
Preparedness Varies Greatly
Shippers using standalone systems in their supply chains, warehouses and fulfillment efforts will encounter more challenges than their autonomous warehouse and omnichannel competitors. Without connected systems working as one, shippers inevitably incur more costs and need more manual labor to fulfill orders. Lacking the inventory visibility and other controls afforded by integrated systems, these shippers cannot deliver the same level of customer service as their high-functioning and more agile competitors.
On the other end of the spectrum, fully-integrated technologies make it possible for shippers to provide inventory visibility and controls throughout the organization and quickly augment their capabilities with specialty software. Totally autonomous shippers offer a great example of the power of fully-integrated technologies. Often referred to as lights-out (Europe) or black-box (U.S.) fulfillment, these merchants require little or no human involvement to deliver hundreds of thousands of parcels daily from a single distribution center. Omnichannel retailers also make great use of fully-integrated technologies by deploying ship-from-store, buy-online-pick-up-in-store (BOPIS) and other innovative fulfillment strategies.
In each of these examples, merchants rely on a designated system of record functioning as a central nervous system that unites otherwise disparate technologies and shares critical information throughout the organization. With this type of system in place, merchants enjoy big advantages when needs change and new challenges arise. They need not adjust operational processes and resources; instead, they can quickly add new specialty software solutions and technologies to address new requirements.
Easy Tech Integration with Containerization
While different types of technologies can serve as a system of record, each merchant must choose the one that makes the most sense based on its own unique needs, and these systems increasingly embrace containerization to make it easy for shippers to augment their capabilities by quickly adding specialty cloud-based software. Warehouse management systems (WMS), order management systems (OMS) and other types of technologies most commonly designated as a merchant’s “system of record” increasingly come ready to integrate with specialty software to support a wide range of fulfillment capabilities, including:
- Fleet monitoring
- Counting inventory
- Monitoring supply chain workflow
- Category management
- Merchandise operations
- Managing locations
- Multi-carrier rate shopping
- Parcel shipping
- Fulfillment tracking
Consider Interoperability
Whether a shipper already has a system of record in place or needs to work toward this goal, they should keep two considerations top of mind:
- The interoperability of all mission-critical technologies
- The fundamental requirement of transactional data exchange
Shippers with a system of record already in place can quickly augment fulfillment, customer service and other critical capabilities with specialty software, but they should ensure compatibility with their existing system of record whenever possible. Fully autonomous, omnichannel and other merchants with an integrated system of record can keep fulfillment efforts on track without missing a beat as they add specialty software to expand capabilities so long as they ensure interoperability. When maintaining a unified fulfillment operation, ensuring the compatibility of specialty cloud-based software being added saves money and, more importantly with peak season looming, time.
Merchants not yet leveraging a system of record that fully integrates with a wide range of specialty software have a lot to gain by putting the right system of record in place to unify disparate technologies and software to ensure a cohesive and orderly overall approach to order fulfillment and customer service, but the right system of record varies. To select the best system of record to meet its unique needs, each business should weigh the value and consider the pros and cons of all viable options. They can start by answering three questions:
- Which option will best mesh with mission-critical specialty software already in use by the organization?
- Do restrictions or requirements of ownership or parent companies limit the available options?
- How many manual integrations will each potential system of record require to work with all mission-critical specialty software, and what data exchange processes are supported?
Any systems not yet supporting transactional data exchange and still relying on batch data exchange should be eliminated from consideration. Even if they can be leveraged to fully automate a warehouse, systems that rely on batch data sharing leave many benefits unrealized. Insisting on the ability to exchange transactional data in real-time across the organization via fully-integrated systems provides merchants with a wealth of benefits that reach well beyond the warehouse.
Beyond the Warehouse: Other Benefits of Integration
When organizations insist on near-real-time transactional data exchange, they unlock next-level benefits that extend far beyond an automated warehouse. Customer service, financial and inventory management initiatives can all benefit greatly by accessing these integrated systems.
Integrated systems and transactional data allow organizations to deliver superior customer service with less manual intervention and cost. On the self-service front, customers can help themselves to real-time order status updates. When customers contact customer service teams, they too will be better cared for, because customer service teams can access the same real-time information repositories on behalf of customers and offer greater problem resolution strategies.
When payments and other financial details tied to a customer or their orders are available to those with a need to know throughout the organization, this too improves customer service, but financial initiatives and departments also benefit directly from these integrated systems exchanging real-time transactional data. Integrating all mission-critical software that houses financial data into a unified system of record protects cost data, for example, and this can be a huge benefit for shippers sending even thousands of orders/day, let alone hundreds of thousands.
Consider the costs associated with losing financial data tied to just 10,000 shipments. This necessitates a lot of manual work and human intervention. A specialized solution like a transportation management system (TMS) for parcel shipping, when integrated with a WMS, OMS or other system of record, can solve this problem and save thousands of labor hours by mapping all deliveries back to cost center codes, accounting codes, carrier reference data and more if all systems are integrated and sharing data with each other in real time.
Inventory management also benefits from integration and real-time data exchange. Without integration, most of an organization lacks inventory visibility and cannot see what is housed where. This makes it impossible to implement an omnichannel strategy and places customers out of reach. With proper integration and real-time data exchange, merchants can better serve customers with ship-from-store, BOPIS, in-store returns and other omnichannel fulfillment offerings.
Extend Standards throughout the Organization
Merchants should be sure to coordinate technology implementations throughout the entire organization. Whether at use in stores, the warehouse or other distribution centers, shared technology implementation standards reduce chaos and errors and make the many benefits of an integrated system of record possible. Organizations should coordinate with their procurement and purchasing departments to put approval processes in place to help control technology adoption and meet all standards throughout the entire organization.
Totally autonomous shippers, omnichannel retailers and other shippers with a unified system of record can quickly and efficiently augment their fulfillment capabilities with modern specialty cloud-based software to meet rising customer demands and boost profitability. Making careful choices; insisting on real-time information exchange; and requiring reliable, practical, organization-wide standards will simplify the effort and greatly increase the odds of not only automating fulfillment but delivering a wide range of organizational benefits that help merchants meet and exceed customer expectations.
Ken Fleming is president of Logistyx Technologies, the leader in Transportation Management for parcel shipping. Since the mid-1990s, Ken has led successful launches of many new technologies and services, including supply chain management, e-commerce, SaaS, and enterprise software and systems integration solutions. Ken can be reached at ken.fleming@logistyx.com.
