Omnichannel Logistics Challenges

Consumers have certain expectations when it comes to shopping and receiving orders. People want instant gratification, which means easy and quick access to products, both in-store and online. Further, customers want orders delivered expeditiously, often the very same day.

Omnichannel logistics and omnichannel supply chain management enable businesses to meet the demands of the modern consumer.

Dartford Littlebrook DC1

What Is Omnichannel Logistics?

Omnichannel logistics synchronizes inventory, logistics and distribution across sales channels to meet consumer demand. Every facet of the supply chain is involved, including the retailer, manufacturer, distributor and wholesaler. With omnichannel logistics, sales and shipments are optimized.

Here’s an example of omnichannel logistics at work: A customer orders a product from your website. Your distribution center is hundreds of miles away, but you have a retail store in the customer’s hometown that stocks the product. Instead shipping the product from the distribution center, it’s packaged and shipped from the nearby store. Your inventory is updated across all channels, and the customer receives the order quickly.

Omnichannel Supply Chain Management Challenges

As effective as omnichannel logistics is at allowing companies to synchronize inventory flow across sales channels, supply chain management presents some challenges:

  •  Lack of inventory visibility: When product is blowing out the doors (as it often does during the holidays), it’s difficult to track inventory spread across multiple distribution centers and retail locations. If your site promises next-day delivery, it needs an efficient order-fulfillment system and accurate inventory visibility. The right metrics need to be employed to track efficiency and cost effectiveness as product flows through the distribution network.
  • Lack of inventory transit visibility: When a shipment leaves a distribution center, the shipper often can’t track its progress from the center to the customer until it ends up at the post office or on the customer’s doorstep. Supply chain visibility is critical. From improving data and communication exchange to using machine learning to improve predictive capabilities, good omnichannel logistics help predict accurate delivery times.
  • Disconnected supply chain processes: Like a real chain, every link in the supply chain needs to be connected for the whole string to be strong. When different warehouses and distribution centers operate on different systems, communication breaks down and weakens the chain.
  • Inefficient order processing: When promising next-day delivery, it’s critical to deliver on time, which means the order fulfillment process needs to be reliable and efficient. Source: (https://proagrica.com/news/what-can-automated-order-processing-do-for-your-business/)
  • The wrong shipping solution: Multiple shipping options deliver products to customers, but they’re not the same. Instead of relying on just one shipping solution, it’s important to use the right one for the right customer.
  • Inefficient return logistics: If a business can’t provide easy returns, it is likely to lose future orders. In an omnichannel landscape, customers should be able to return orders bought online to brick-and-mortar stores.
  • Manual inventory management processes: Manual paper-based processes tend to be more mistake-prone than automated processes. Instead of risking human error, focusing on automated inventory management solutions—such as RFID tags, barcode scanning and other advanced systems—is required.
  • The wrong 3PL: Partnering with the right third-party logistics provider is especially valuable when it comes to inventory optimization and omnichannel fulfillment, so it’s easy to see how using the wrong third party can lead to devastating results. A competent 3PL understands which metrics to use and how to measure them to drive continuous improvement. It can also be an essential part of a successful and smooth-flowing supply chain. 

Solutions to Improve the Customer Experience

Good omnichannel supply chain management and logistics are designed to provide consumers with a seamless and positive shopping experience in situations where a company runs both a brick-and-mortar store and an e-commerce distribution center. Partnering with the right 3PL provider and taking advantage of what technology allows in terms of accuracy, speed and convenience plays heavily into obtaining good results and avoiding the challenges listed above.