September 8, 2022
Why your Omnichannel Supply Chain has limitless possibilities
Many major consumer goods brands are adopting strategies to sell directly to their consumers (DTC) and, hence the need for Omni-Channel transformation is urgent. The COVID-19 pandemic has accelerated the pace of transformation and existing technologies, infrastructure, operational processes, and most importantly, human resources have been stretched to the limit.
Post-COVID we are seeing businesses reporting around 40-50% of sales being made on their e-Comm platforms. With customers preferring to shop online, consumers still expect their delivery times to be short (with companies such as Amazon promising 2-day delivery times globally). Consumers want their products to be delivered fast. Meanwhile, brands need to fulfil customer expectations while also managing the costs of their deliveries.
As a supply chain executive, your company has decided to embark on this Omni-Channel transformation, now what?
At ebp Global, we work with our internal Strategic Insights and Analytics team to run your data through our home-grown decision engine to provide you with customized solutions and get you started on the right path:
- Ensuring you have the appropriate long-term, medium-term, and in-market plans around Demand Planning, Merchandise Planning, Sourcing Strategy, and Multi-Node Network Planning.
Guided by the analysis of your data as a foundation, ebp will help you to determine and then segment the appropriate flexibility funnel (planning horizon, frequency, and granularity) for your long-term, medium-term, and in-market plans. This is a crucial first step for any brand to take. Demand Planning must be aligned with your company’s Integrated Business Plan (IBP) and decoupled from the Merchandising Financial Plan to be used as the unconstrained plan to dictate the plan for the rest of your supply chain.
2. Setting up the right inventory level – your first line of defense.
As you embark on your journey to be a true Omni-Channel organization, you will gain better visibility of your consumers’ true demands. These are valuable insights that you can use to determine the kind of products you will need to maintain a higher in-stock level. Losing sales or consumers’ trust is more costly than carrying extra inventory of the right product mix. Once again, guided by your data, ebp will help you determine the right inventory segmentation and in-stock level.
3. Speed in Raw Materials and Manufacturing will provide the next line of your defense to replenish closer to market.
Gone are the days of taking future orders and placing production months ahead. There will still be some product segments in your business that will retain some form of future orders, but they will be for your pinnacle products such as new technologies. For your core products, the key is SPEED to market. Consumers have choices, therefore, having inventory as your first line of defense only, is not enough. You need to ensure you can produce and replenish your core products quickly to maintain or regain market share. Our highly experienced Supply Chain experts at ebp will guide your transformation to a truly speedy organization, from setting up the agile raw material planning to enabling shorter manufacturing lead-times. We have experience in enabling speed for both far and near shore manufacturing locations.
4. Segment your manufacturing capacity to protect your speed programs.
Once you have established your speed programs and the underlying processes, whether you are using third-party manufacturers or your own manufacturing facility, you need to ensure there is enough capacity to support the speed program demand that will come much later in the planning horizon due to their shorter manufacturing lead-time. If you do not reserve the capacity for the speed program, any increase in demand for your longer lead-time products will consume the available capacity and you will not be able to replenish your core products on the speed program. ebp will guide you on how to balance the consumption of the capacity between the various competing demands and programs your organization has most economically.
5. Finally, create your fulfillment flow strategy using a Multi-Node Network
Congratulations, you have successfully manufactured your products speedily and timely. To ensure you can reach your consumers in a timely and relevant manner, you need to position your inventory and have a replenishment strategy for where they are located. Once again, guided by your data, ebp will help to find the optimal flow strategy covering delayed purchase order decisions (postponement strategy), onshore assembly, multi-node network & inventory plans. This is to ensure inventory is positioned and optimized in the most relevant part of your supply chain within fulfillment nodes to maximize sales. For more on this specific topic, please refer to our prior article ‘The new way of supply chain thinking; Inventory segmentation and allocation within a multi-node network’.
So, are you ready to begin your Omni-Channel transformation journey? At ebp Global, we are currently working with clients to help them transform their operation into having an Omni-Channel as their strategic core capability. If your business is interested in learning more about this, or how we can help, please reach out to us at email@example.com.