Published June 11, 2014
By Jim Tompkins
In my blog post last week, I discussed two types of supply chains in today’s omnichannel world: the titans and the industry leaders. I talked about what makes them successful and what challenges them the most.
As part two in this series, I’d like to shift the spotlight to the other two categories in supply chains: the “players” and the “laggards.”
Let’s first consider the players in omnichannel. While their channels are independent, their work is ongoing to facilitate cross-channel capabilities. Their inventories are separate by channel, but cross-channel transfers are accommodated when allocations are wrong.
The players constantly seek to improve customer satisfaction, but only do so when it can be done without adding significant cost. They do not have an order management system, so orders are filled from the assigned fulfillment center and back orders handled via work-a-rounds.
They are making efforts to improve forecasting and increase inventory turns and product availability. Omnichannel players work hard to control variability to, in turn, improve customer satisfaction.
Then there are the laggards. Their inventories are separated by channel, and each channel is responsible for hitting its forecasts. Omnichannel laggards believe the best way to control costs is to have all inventory of an item warehoused in one building. If customers want faster delivery, it is offered at an increased cost.
The order entry system knows where all inventory is located so that orders for those products are sent to the correct warehouse. Forecasting has not been accurate enough to rely upon, so laggards allow the merchandising organization to predict future demand. Variability is also a challenge, with efforts to have the merchandising organization get better control of it.
Now we have looked at all the different types in omnichannel: the titans, industry leaders, players, and laggards. Which one are you? How can you better improve your omnichannel supply chain? Send me a tweet @jimtompkins or let me know in the comments.