In the ever-evolving retail landscape where consumers seek a seamless shopping experience across diverse channels, omnichannel fulfillment has emerged as a strategic imperative. Yet, the path to successful omnichannel operations is not without its hurdles. As operations embark on this transformative journey, they must be prepared to navigate a series of challenges. In this post, we dive into top challenges and tap into the insights of industry experts to shed light on the complexities and possible solutions.
The Diverse Technological Landscape: Unveiling Common Challenges
Technology serves as the backbone of operational success, yet its implementation is far from uniform. Tailoring technology to the unique complexity and business requirements of each operation is crucial. Still, within the realm of omnichannel fulfillment, several shared challenges persist. These challenges include inventory management, space utilization, picking complexity, and labor shortages.
Inventory Management Complexity
Vikas Aron, Chief Product Officer at Bricz says “Brands must plan, allocate and sell across retail, wholesale, and digital channels. They are looking to stock inventory across different channels in a single location to improve inventory efficiency and margins amidst demand and distribution volatility. However, with very different order profiles, service level agreements, picking and packing processes, the benefits of keeping inventory together can often result in higher operating costs. Managing this balance between operating costs and inventory efficiency is one of the top challenges omnichannel retailers face.”
Space Utilization and Warehouse Optimization
James Goldman, CEO, and Managing Partner at JGA believes warehouse optimization and space utilization is a challenge for companies implementing omnichannel fulfillment. “With multiple channels, the warehouse’s layout needs to be optimized, and the picking and packing process needs to be streamlined to ensure timely and accurate order fulfillment. The challenge also arises in managing inventory storage and handling procedures to keep the inventory safe and secure.”
Picking Complexity and Labor Shortages
Steve Hopper, Founder and Principal at Inviscid Consulting states that as a wider variety of order types becomes normal, the need to handle multiple units of measure (UOM) can complicate things. “Since omnichannel warehouses are shipping ‘ones and tons’ concurrently, the same SKU is often available at multiple UOMs. These might include a full pallet load, a full case, an inner pack, and/or an each. And the most efficient way to pick and ship orders typically involves picking the same SKU at all UOMs, depending on the quantity.”
This in turn leads to increased picking complexities, as Jason Gryszkowiec, Senior Managing Director at St. Onge cautions. “Increases in e-commerce volume and more frequent smaller deliveries to service store replenishment drive up break case volume, increasing picking complexity and labor needs while creating new order pack and finishing task requirements. Plus, increasing SKUs stresses resources within the facility as they expand to service multiple challenges.”
Staffing Challenges and Fluctuating Demand
Staffing challenges are a common thread across all warehouse environments. Steve Pullo, President at Blue Label Systems, shares that “scaling the workforce during peak periods is a serious challenge” in omnichannel environments. This is because some retail businesses can go from shipping 5k orders a day to 50k orders a day almost overnight once peak season hits.
Overcoming Challenges with the Right Warehouse Management System
The experts unanimously agree that a robust Warehouse Management System (WMS) tailored to the unique requirements of omnichannel operations is essential to overcoming these challenges. A WMS serves as the backbone of operations, orchestrating inventory, orders, and fulfillment across various channels. This modern solution not only enhances operational efficiency but also improves customer satisfaction by delivering seamless shopping experiences.
Conclusion
Omnichannel fulfillment has tremendous potential, but also poses challenges. By acknowledging and addressing issues such as inventory management, space optimization, picking intricacies, and labor shortages, operations can forge a path to success. Armed with a purpose-built WMS, operations are primed to transform challenges into opportunities, ensuring efficient operations and resonating with the demands of consumers who seek seamless shopping journeys across diverse channels.
For more details on transforming your supply chains to deliver omnichannel excellence, check out our new white paper: Navigating the Omnichannel Frontier: Success Stories and Strategies for Seamless Shopping Experiences.
