02 Mar 2023

Omni-Channel Supply Chain: Revolutionizing Retail in the Digital Age

An omnichannel supply chain allows a business to be scalable to customers' demands providing an integrated & consistent shopping experience across different channels.

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The more, the merrier.

We have heard this phrase countless times, but its relevancy across many walks of our lives holds true. The more resources, the more efficient the process is, and the less time it takes to complete a task. The same ethos also applies to achieve faster response time for an industrial supply chain functioning. And, to tick off the latency in order fulfillment, organizations are now exploring the possibilities of applying an omni–channel supply chain to improve customer satisfaction and build on its organic reach.

Supporting the order fulfillment process by directly integrating physical stores & online sales vertical, an omnichannel supply chain by its working nullifies the complexities involved in an extensive business logistical procedure. In this write-up, we’ll shed the spotlight on how the omnichannel supply chain process finds its relevancy today & how large-scale industries are adopting the method to their advantage.

Table of Contents

What Is an Omnichannel Supply Chain?

The word ‘omni’ stands for ‘all-inclusive,’ and in the context of logistics, its literal translation means employing multiple-channel strategies & operations to keep up with the scalable demand of a product. Aiding both B2B (business-to-business) & B2C (business-to-consumer) transactions, the titular network capabilities empower informed decision-making across various departments of an organization, from IT to marketing, warehousing, and delivery support. In its working, an omnichannel network relies heavily on coordinated effort amongst the supply chain stakeholders who are well aware of their KPIs.

In a nutshell, the key reason for an omnichannel existence is to enable an enterprise to empower its user base to order from anywhere & be adept at fulfilling the same from anywhere (read: online & offline channels).

How Do Omnichannel Supply Chains Meet Customers’ Demands?

An omni-channel supply chain works towards a singular goal of keeping a balance of inventory availability & meeting the customer’s demand. This astute process ultimately leads to better profit margins, sales opportunities & an increase in user acquisition rates. However, the DNA of its operation relies on how transparent & in sync the processes involved are.

And, to meet a buyer's ever-fluctuating & ever-evolving demands, omnichannel relies on its distribution network. These networks shape the user shopping experience and ensure a seamless order flow from initiation to delivery.

With omnichannel operations catering orders from various channels from an e-commerce platform, social media marketplace, and online ads, it becomes essential for management to prepare for all possible scenarios, including deliveries and returns through every possible channel. An omnichannel distribution gets broadly divided into two systems:

  1. Forward Distribution System: A distribution network designed on the parameters dispatching locations & destinations, this mechanism considers every delivery process.
  2. Backward Distribution System: Network managing product return flows, i.e., reverse shipment from customers to the stores.

In addition, based on the customer's order processing, these distribution networks get categorized into six other ways.

  1. Store Pick-up of an online order: Methodology involving customers placing orders online & picking them up in-store.
  2. Drop request for online order: Mechanism involving online orders with a curated request of product drop on a specified address.
  3. Home delivery of an in-store purchase: Transaction where a customer places the order from the store & gets it delivered to an address, usually their home.
  4. Shipping from store: When a buyer puts in a special request to transfer the ordered goods from brick & a mortar store (physical store) to another location.
  5. Drop-shipping: A scenario where the order fulfillment takes completion from collecting the order from the warehouse & shipping it to a desired drop-off location for a customer.
  6. Online order Return: A simple return mechanism where a user purchases a product online & decides to return it to the physical store & exchange it if possible.
  7. Same-day delivery: Perhaps the most popular delivery method of late, where a user receives an online ordered product on the same day.

Omnichannel vs. Multichannel Supply Chain

While the above terms may sound similar omnichannel & multichannel are two different modus operandi solving slightly unidentical purposes.

A company focuses on one or two marketing channels in a multichannel supply chain. For instance, an enterprise's full attention will be on its physical store & its online presence. In contrast, omnichannel logistics will consider the needs of its customers & will present an all-inclusive approach enabling users to order products from any channel.

While each strategy has its perks & brings a lot of financial clarity, helping a business with its customer experience, an omnichannel supply chain strategy benefits an organization immensely by avoiding non-transparency, more akin to a multichannel distribution approach. With its cornerstone approach on a single channel, a multichannel supply chain finds its stakeholders employing their method concerning their own vertical. This results in a lack of coordination among an organization's various processes.

What Are the Biggest Challenges of Omnichannel Distribution?

Even the most sorted distribution network providing a marquee mapping mechanism might need to catch up to that 'perfect logistical network' tag. An omni-channel supply chain for all its perks has some crucial factors which need a slight reworking. Here are a few significant working challenges for a business implementing omnichannel logistics.

  • Inventory VisibilityWith an omnichannel network providing customers with multiple marketing means to order products – an industry might find itself in a fix to keep a tab on inventory availability. A company might do well to employ an inventory management system helping all the key players, from retailers to warehouses to the end user, know the visibility of stock, aiding them in making a better-informed purchase.
  • Delivery TimelineThis could be a virtue, but managing deliveries of orders influx through more than one avenue can easily be overwhelming for a shipping leg of a logistical network. For efficient management of deliveries timeline under omnichannel distribution, one needs a comprehensive overview inclusive of workable information such as shipping location, type of deliveries (same-day or standard delivery), transit availability, and ETA, among others.
  • Choosing a vetted 3PL partnerWith operations being managed at such a large scale, an omni-channel distribution sometimes requires a 3PL partner sharing fulfillment process load. While it might feel organic onboarding a third-party vendor, an organization has to ensure that they follow all the essential guidelines, measure up to the KPIs & maintain an orderly supply chain mechanism.

Finding the right omnichannel supply chain solutions

Having a thorough omnichannel distribution can help an organization maximize its fulfillment potential. For an enterprise enjoying great footfall on both offline and online engagement, an omnichannel network can ensure that your supply chain can measure up to the scalable requirements of the user & the market simultaneously.

And, with 3SC’s omnichannel supply services, your organization gets an optimized logistical framework supporting the end-to-end order management process with complete visibility & comprehensive accountability of the set performance metrics.

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