When Good Fulfillment Ideas Go Wrong

Published : February 27, 2015

frustrated-businessmanIn the rush to "get on board" with an emerging business innovation or philosophy, it's easy to miss a few things along the way. Unfortunately, in the case of a fundamental business process like distribution, these rough spots aren't just inconveniences— they have the potential to derail whole sections of your business. Here are some cautionary tales to keep in mind if you're planning on jumping into the omni-channel gold rush.

Split-Second Decisions Moving Too Slowly

David Anderson of SalesWarp points to the seemingly small, quick decisions made every day in an omni-channel business as a potential trouble area. If a customer is physically closer to one warehouse, but another has a better chance of filling the entire order, what should you do? Without a clear decision flowchart or order placement hierarchy, it's easy for your staff— especially if it's comprised of mostly new hires in the wake of expansion— to get tangled up in the details.

Multiply these small, difficult decisions by each order that comes in and you have backlogged orders and an inefficient system weighing down your progress.

Big Ideas, Small Budget

Large chains have a decided advantage over smaller counterparts breaking into the omni-channel field. With substantial resources and a steady existing cash flow to support a "wait and see" approach, they can afford to learn from mistakes that would be business-wrecking for a smaller manufacturer. As CNBC's Krystina Gustafson notes, if a company decides to aggressively pursue an untested feature, such as same day delivery, midmarket businesses have far more to lose. In a bid to differentiate themselves in a crowded concept like omni-channel fulfillment, it's all too easy for an eager company to bite off more than they can chew.

How Close Should You Keep Your Cards?

Outsourcing is like the proverbial potato chip— once you convert one aspect of the business, converting others seems like an attractive prospect. Given all the moving parts of omni-channel distribution, it's almost a foregone conclusion that some type of outsourced fulfillment services will be necessary in time.

In fact, Capgemini's Charles Trimarco highlights the decision to outsource your fulfillment— either partially or wholly— as a very important consideration in omni-channel adoption. It’s critical that your operation finds a balance between internal and external resources, lest you see the benefits of omni-channel expansion quickly become liabilities as one partner is found to be underperforming and another inexperienced in-house team is packaging items poorly and increasing return rates.

What Do You Really Have On Hand?

With orders flowing in from multiple channels, pinning down exactly how much you have of a given sku can be challenging. Unfortunately, there isn't a master switch to throw when you begin your path toward omni-channel that gives you the capability to have a handful of sources perform inventory at once.

Even if you start a category count, there's no guarantee you'll be able to finish it before your warehouse staff must start the gears grinding again. If you've chosen to outsource your fulfillment, the problem can be even further compounded if your partner’s IT system is unable to support features like real time stock numbers.

As Maria Haggerty explains on LinkedIn, cycle counting is currently considered best practice in an omni-channel workflow, but it is certainly not the best way to ensure the total, up-to-the-minute visibility that keeps omni-channel distribution running smoothly.

Here’s the Bottom Line

While omni-channel shouldn't be an impossible goal that's always hovering on the horizon, companies looking to embrace it must do so carefully and thoughtfully to ensure long-term viability. Multi-channel distribution plans have much to offer companies looking to test the waters, both in growth opportunities and hard-won lessons. If the uncomfortable, difficult obstacles are tackled with planning before they emerge as in-the-moment emergencies, unpleasant fulfillment surprises can be curtailed more efficiently.

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Topics: Supply Chain Logistics

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