Omni channel fulfillment requires a hybrid collaboration platform

Details: 30 January 2015; | Written by Rob van Ipenburg

Inventory visibility and cost effective order fulfillment are key to success. Why are some companies struggling to pull together their bricks and clicks strategy while others in the same business or vertical thrive and expand both their sales and margins? Of course there are many marketing and circumstantial reasons for each case in point but from a supply chain perspective the main differentiator is versatility in process execution. Sorry, does that sounds too abstract? Let's make it tangible:

Typical bricks retailers have relied on Point of Sale, Order Management and Procurement systems and processes with well-known logistic distribution networks.
Online retailers have a low entry barrier because web shops are easy to build and there is much out of the box plug and play software like payment modules or parcel delivery modules managed by 3PL's that make it look like e-commerce is an easy business model.

When it comes to true performance however, transparency on prices and availability of products for consumers ruthlessly weeds out poor performers on both end of the spectrum: Consumers take their smart phones into stores and web shoppers compare offerings in a race towards the bottom and this is where it becomes interesting...

So, how will a hybrid collaboration platform make the difference and what is it in the first place?

A collaboration platform is all about information: any time, anywhere, with anyone and in any way.

Looking at inventory for a start will probably get the point across on these 4 things: Inventory can be everywhere: In a shop, in a warehouse, in a container on the ocean or at the supplier to name a few. This information however typically sits in the IT systems and under ownership of different parties: Manufacturer, Logistic Service Provider, Distributor, Retailer, franchiser etc. Now look at the buyer: He or she would typically need to tap into any or many of these silo's to find the product or get attracted to it as a fun shopper in the street or on-line.

Now let's go to a real world: Example A: You think you like this DAB radio and you have read 7 customer reviews amongst which 7 of them sound suspect but in fact you would really like to understand how the sound compares to your iPhone speaker set or hifi stereo. Example B: You think you like this bag but wonder how big it really is and what the touch and feel is.

This is where the hybrid part comes in: Where is the nearest store that has this DAB radio so I can listen to it? Am I going to order this bag from Zalando and return it if I don't like it? In the store I'm visiting they have the right size and it fits nicely, but it's not my colour. Can I get it shipped to my house directly so I don't need to come back? As a retailer I attracted the customer's attention and convinced him to buy from me but how can I have my supplier ship it direct while maintaining my customer intimacy?

This is where the business network part comes in: All systems must be connected to answer the question correctly and come up with a cost effective response involving input from at least 2 or 3 other actors. If I'm not fully vertically integrated, the cost of that information is prohibitive to build all the integration or takes too long to get the answer I need within the attention span of the shopper.

All the platforms need to be connected as well: Mobile apps should facilitate transfer of a product from one "brick" store to a Parcel Delivery service that will bring it to the home of the consumer in a store that just ran out of the size or model or from a webshop while making the sale now and preserving the margin.

Now think business: What if Zalando needs to get real on profitability and can't grow themselves out of the problem any more? What if Docdata cost for my e-fulfillment either prices me out of the market or erodes my margin? What if I have less capital to pile 'em high and sell 'em cheap in my store but must leverage my direct contact with the consumer to do the transaction?

This is where the supply chain business network guys come in: Not the disguised sellers of the next Docdata or Parcel Delivery service fulfillment solution but the ones that have no vested interest, commission or transaction fee in the products or services being sold but just focus on simplifying collaboration: Collecting the data from all the different IT systems of all parties involved, making them available via EDI, web portals and mobile devices to anyone involved on a need-to-know basis with strict security.