Omnichannel retailing gives you more touchpoints to reach customers. But at a cost of greater complexity, more returns handling and a host of other logistics dilemmas. Here are 5 ways you can profitably navigate the omnichannel puzzle, satisfying customers however they order.
Using a bricks to clicks to swipe shopping approach offers companies more ways to reach and connect with consumers, and more ways to differentiate in an ever-more commoditized world. According to the Harvard Business Review (1), omnichannel provides… “a seamless shopping experience in brick-and-mortar stores and through a variety of digital channels that not only differentiates retailers from their peers, but also gives them a competitive edge over online-only retailers by leveraging their store assets.”
But what are the consequences on logistics management? And how can we best adapt warehouse strategies to optimize flows, manage returns and keep costs from rising? Here are 5 ways to do it:
1. Make the most of your warehouse
Omnichannel adds complexity by adding delivery of single items to individual consumers along with the traditional challenge of moving big boxes and pallets. By working with product data, dimensions, and frequencies you can utilize storage in the best possible way. Make sure you have right number of “right-sized” locations for your items – ones that take usage (pick or buffer), item size/dimensions and the frequency of location visit into account. Maybe some items should be stored in pick area only (i.e. not buffer). The most efficient way is to not store at all. Perhaps some of your items could be cross-docked from receiving directly to shipping.
2. Concentrate on inbound flows
Many warehouse managers neglect the savings that can be made from inbound flows. Small quantities enable companies to stock and sell a much wider product range, compounded by some 30% of articles ordered online are likely to be returned. Look to make savings on the equipment you use to handle these smaller goods quantities in and out. For instance, equipment that could be used for receiving and put-away, ensuring a flow-process from inbound trailer to storage location. Work with your suppliers to get an ASN in advance. Also work with statistical models for inbound audits to learn which suppliers need extra attention.
3. Take another look at picking
By definition, handling an increased numbers of articles adds to the cost of picking. In the first instance the answer may simply be adding an extra shift. Look particularly at how to pick smaller and larger items. Should they be in the same location? Or separated? And how can you minimize travel times, to keep pick areas as dense as possible. As labour costs increase, start to look at automation and semi-automatic picking solutions.
4. Properly analyze buying patterns.
All the information you need regarding who buys what and when, the effects of campaigns, fluctuations, etc., is available, especially from a smart WMS. Use those resources to effectively plan and forecast. Using the right tools can help you reach up to 95% forecasting accuracy. Combine historical data and calendar data such as holidays and school terms. This will give you additional insight how to plan your resources in the best possible way.
5. Make the complex simple with a smart WMS
Implementing the right WMS simplifies all the above activities. Astro WMS from Consafe Logistics is designed to improve efficiency through faster processes, greater inventory reliability, error reduction and a better returns process. The result is greater internal efficiency, improved traceability and a lot more simplicity for everyone concerned in the logistics process.
Be personal in customer communication. Instead of just sending standard track-and-trace messages like “Your order is now shipped”. Why not include a pdf with a signature by the operator at the pack-station and a more personal message that your order is ready?
Following these five points will go a long way to improving profitability while giving customers an excellent buying experience – key in making them come back for more.
Mikael Brorsson is Product Manager for Consafe Logistics Astro WMS