In an earlier post, we raised the topic of how ‘non-unified‘ many retailers’ critical functional capabilities are when setting out on a unified commerce strategy; we emphasized how tight collaboration between these functional areas is critical—with the supply chain often being de-prioritized, while the latest digital commerce bells and whistles are implemented.
Let’s discuss how the supply chain is impacted by unified commerce and some of the key challenges that any retailer must address early in the transformation process. The ultimate goal, of course, is to effectively build a unified commerce foundation that addresses important customer needs and differentiates the brand—but moreover, one that sits on an infrastructure positioned to support the new business strategy long term without disruptive operational challenges that impact the program profitability and the total cost to operate.
Supply Chain Network
Quite simply, how do you ensure that your current network can support the new customer demands and the associated supply chain impacts that result? Is the logistics network optimized for multi-channel routing, distribution, and returns management? Since the onset of the omnichannel movement, retailers have seen exponential growth in not just small parcel but less-than-truckload (LTL)—with optimized consolidation demands growing as well. The result is that retailer networks have in some cases doubled in size, type, and reach when you include their proprietary facilities and associated third-party hubs. Parker Avery has found that many networks required assessment or re-engineering and were at risk as many retailers quickly realized they needed more flexible nodes (shipping/receiving/flow-through origins) that could support the click-to-ship demand, while still hitting the same day, next day, or two-day service they promote online or in-store.
Besides identifying how many (and what type of) nodes are needed, leaders must consider if the current, various merchandise planning and operational systems are set up to dynamically manage a constantly changing inventory network. Are the in-house supply chain skillsets prepared for this new operating model, or do the retailers partner with providers or non-compete vendors to solve this? Unified commerce brings with it enormous