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W&H Systems presents Omni Channel fulfillment. In omni-channel fulfillment, all the resources of the supply chain are focused on transparently serving a single shopper who has placed a single order. Traditional warehouses are not designed to handle the omni-channel consumer’s orders. To meet the challenges of omnichannel fulfillment, retailers must redesign their distribution processes and add automation equipment to their DCs.
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© 2014 MHI®
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Sponsored by:
Omni-Channel
Fulfillment in a
Changing
Retail World
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Presented by:
Dave Lodwig
System Manager
In omni-channel fulfillment, all the resources of the supply chain are
focused on transparently serving a single shopper who has placed a
single order. Traditional warehouses are not designed to handle the
omni-channel consumer’s orders. To meet the challenges of omni-
channel fulfillment, retailers must redesign their distribution processes
and add automation equipment to their DCs.
Key Takeaways
* How to meet the challenges of omni-channel fulfillment
* Automation needed to meet omni-channel fulfillment requirements
What You Will Learn …
Agenda
• What is Omni Channel distribution and how
is it different from traditional retail
distribution?
• Order types and shipping channels
• What do you need to do Omni Channel
efficiently?
Omni Channel Retailing
“Omni-Channel Retailing is the evolution of multi-channel
retailing, but is concentrated more on a seamless approach
to the consumer experience through all available shopping
channels, i.e. mobile internet devices, computers, bricks-
and-mortar, television, radio, direct mail, catalog and so on.”
Retail Supply Chain Evolution
Retail Orders
1970’s-1990’s
Single Multi
Cross
Omni
Seamless?
1990’s - 2010 Single
Multi Cross
Omni
Seamless?
Retail Supply Chain Evolution
Retail Supply Chain Evolution
2010 - 2012 Single
Multi
Cross Omni
Seamless?
2010 - 2012
Single
Multi
Cross
Omni Seamless?
Retail Supply Chain Evolution
Retail Supply Chain Evolution
Complexity
2015 1995 2000 2005 2010
11
31
51
69 78
Inte
rnet users
per
100
Omni Channel Impacts on
Retail Distribution
Pick any type of order from one inventory and ship
it through any channel
• Order Types ─ Retail
─ Consumer
─ Wholesale
• Shipping Channels ─ Retail (TL, LTL, and Parcel)
─ Consumer (Parcel)
─ Wholesale (TL, LTL, or customer’s carrier)
Order Types Retail
• Low – Medium no. of orders
• Medium – High no. of lines/order
• Low – Medium no. of units/line
Consumer
• Medium – High no. of orders
• Low no. of lines/order
• Low no. of units/line
Wholesale
• Low – Medium no. of orders
• High no. of lines/order
• High no. of units/line
Omni Channel Impacts on Retail
Distribution Shipping Channels
Retail
• Parcel
• LTL
• Truck load
Consumer
• Parcel
Wholesale
• LTL
• Truck load
• Pick up
The Co$t Of The
Complexity
• Omni-channel distribution
creates Omni-Processes
• Complexity creates more
challenges
Key Performance Issues
• Service levels and on-time shipment – Orders received by 12 PM or later shipped same day
• Inventory accuracy and order fill rate – 98+% accuracy
– Fill rates need to be as high as inventory
• Order accuracy – 99+% every time
Operational Changes
Inventory/Customer
visibility
– Real time inventory: Do
you have it in stock?
– Location of inventory:
Where do you have it?
– When can the customer
get the product?
Service levels
– Reduced time to ship
orders
– Easy returns
Order Picking & Packing
– Less time to complete
orders
– 100% accuracy every time
– Forces smaller batches
– More Value Added Services
Shipping
– Provide more real time info
– Carrier management
Visibility
Information systems are omni-channel:
– Inventory • Distribution center inventory
• Retail store inventory (need to react to eCommerce orders real time)
– Order completion time • When will the order be completed (sometimes time is dictated by consumer)
• Order completion time
– Delivery • Pick up time and date
• Carrier tracking information
Whenever Wherever Whatever
I want it and I want it now!
Where is my stuff?
Inventory
Your inventory in all channels must be merged into one
– Distribution center and retail inventories are not mutually exclusive anymore • Is it available on-line?
• What retail stores have the product closest to the consumer
– Retailers can leverage their retail store presence and inventory • You have to be 100% accurate or consumer will be lost
• If you manage the inventory right and communicate with the consumer you may be able to hold less
inventory
Service Levels
Today’s consumers want product from any one of your
channels as fast as possible
– The amount of time that you have to pick, pack, and ship an order
will only become less over time • Today you only have approximately 4 hours to pick, pack, and ship an order
• Same day delivery will shorten the window more
– You have more channels to send it through • Consumer orders can be sent to your or other retail locations
• Today they can be sent via parcel carriers, but cost will eventually force these
orders to be merged with retail store shipments
Returns
– Need to be dealt with quickly and efficiently • Consumer wants credit and or new merchandise right away
• Resellable product should be returned to stock ASAP
Order Picking
– Less time to complete orders
• Can force smaller batches/waves
• Makes “batching” more difficult and time consuming
(relatively)
– 100% accuracy every time
• Errors are inevitable, so you need to account for and manage
them efficiently
– Forces smaller batches
• Waveless or dynamic wave transition
• Could a manual operation be efficient enough?
– Packing
• Personalization and gift wrap
• Brand specific boxes and collateral
Shipping
Order Picking & Packing
– Less time to complete orders
– 100% accuracy every time
– Forces smaller batches
– More Value Added Services
Shipping
– Provide more real time info • Shipment time stamp
• Specific carrier and tracking info
• Multiple accounts (drop shipping with a another company’s carrier account)
– More carriers • UPS, FedEx+, USPS, USPS servicers,
• Regional carriers and couriers
– Cost reduction • Pressure to reduce costs due to “free” shipping
– Same day shipping
Automation Efficiencies
Inventory
– Warehouse Control System provides real time up dates • Heartbeat of the automated systems: Manages all the data downloaded
from Host/WMS
• Runs all the people and automation to fulfill orders
• It can provide more granular detail during the fulfillment process
• The information needs to be given to the Host/WMS for determining consumer
information
– Automated storage and retrieval allows faster access to inventory • Shorten time to inventory
Service Levels
– Shorter order cycle times can help shorten response times • Benefits smaller batch environments
– Easier to prioritize orders and send the most important to the front of
the line • No physical management required
Automation Efficiencies
Order Picking
– Shortens order cycle times
– More accurate
– Frees up labor for manual tasks
– Easier to manage
– Can be integrated with packing automation to create large labor savings
Shipping
– More flexible and productive
– Handles the complexities of 3rd party billing easily
Increase the speed of discrete order picking
– RF, Voice, Pick-To-Light,
Batch picking
– Pick the units for many orders at one time
– Requires a second step to sort them out into discrete orders (consolidation)
– The secondary sort can done manually
(assisted with automation) or with a unit sorter
– Put System • Used when many orders contain the same SKU(s)
• Feed the system with full cases or pallets
Order Picking Automation
Consolidation Consolidation Consolidation
Order Picking Automation
Batch Picking Areas
Medium
Movers
Slow
Movers
Manual
Packing
Semi-
Automated
Packing
Fast
Movers
Automated
Packing
Shipping Automation
Productive
– Easily handles 3,000 – 5,000
packages per hour
– Handles almost any type of
product • Cartons, bags, envelopes
– Shipping software integration • Fully automate the rate shopping and
manifesting function
Automation
Route
Sort
Balance
Optimize
Link
Link
Connect
Exchange
Sync
Operation
Plan
Predict
Manage
Control
Business
Dashboard
Report
Statistics
Receive
Put-away
Replen
Locate
Pick
Pack
Ship
Move
Warehouse Control System
For More Information:
Speaker email: [email protected]
Website: www.whsystems.com
Or visit MODEX 2014 Booth 4726
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speaker’s email address/home page, the Exhibiting Member Company’s name,
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