Supply-Chain Management Is Key to Cyber Success
Cyber Monday 2013 yielded record-breaking online sales of nearly $2 billion (an increase of 20 percent from 2012) as shoppers spent Black Friday enjoying Thanksgiving leftovers, bookmarking their favorite shopping sites and preparing their devices for a flurry of cyber-sale activity. Consumers are now accustomed to the convenience of “commerce anywhere,” and expect to be able to make holiday purchases from the comfort of their homes with seamless online and mobile experiences.
While the 2013 rush is over, marketers wishing to improve their omni-channel performance in time for the 2014 holiday season must establish efficient supply-chain management (SCM) systems to ensure that customers’ purchases arrive perfectly gift-wrapped and on-time. This includes five important aspects.
Demand Planning. The SCM process begins with Demand Planning, a process of creating forecasts based on data such as planned orders, customer contracts, and historical sales. Demand Planning software solutions such as Demand Foresight and Predictix can help marketers improve the accuracy of their revenue forecasts, align inventory levels with peaks and troughs in demand, and ultimately, enhance profitability. Shopper impact: Canada Goose utilizes analytics from last year to better align inventory levels with anticipated demand, giving you another opportunity to get that jacket that flew off the shelves in winter 2012.
Procurement. Forecasts from Demand Planning facilitate Procurement, a process of automating sourcing activities to inform retailers’ purchasing. Solutions such as BirchStreet Systems, GEP, and Verian integrate into a platform that buyers and suppliers alike can use to track, benchmark, and analyze spending. Shopper impact: J.Crew tracks cashmere costs and automates material purchases at optimal prices, allowing you to redeem their 30% off promo code for sweaters.
Warehouse Management. Procured products are then shipped to warehouses, where they are organized and stored by Warehouse Management Systems. These systems include Deposco, Logfire, and Softeon, which aim to minimize cost and fulfillment time by seamlessly linking order processing, inventory management, and logistics management. During the holiday season, this is especially important for managing increased inventory turnover. Shopper impact: Apple has proactively stocked adequate iPad Air inventory levels at its warehouses so you can buy one, sparing you the heartbreak of it being out of stock.
Order Fulfillment. Order Fulfillment applications such as Accellos, Bergen Logistics, and ShipStation automate order processing by capturing sales information from online checkout and physical point-of-sale, invoicing customers, determining the location of the items purchased, and fulfilling orders by picking, packing, and shipping items based on inventory organized within Warehouse Management Systems. Shopper impact: From among the many thousands of SKUs in its warehouse, Nespresso selects and packages (in the over-priced gift wrap you tacked on at checkout) the espresso machine matching the exact model, color and size you specified.
Transportation Management. Finally, Transportation Management Systems from companies such as LeanLogistics, Llamasoft, and Pedigree Technologies facilitate transportation from warehouses to end users by defining the most efficient transport methods, executing transportation and providing tracking operations. During the holiday season, these solutions consider factors such as snowstorms and traffic to determine the most efficient shipping routes and allow retailers to provide accurate delivery estimates. Shopper impact: The Nest thermostat you ordered arrives in time for the holidays, within the five-day shipping window you selected at checkout.
The supply chain includes a complex series of events. Should any aspect of the process go wrong, orders might not be received in time for the holiday it was intended to observe. The fate of the customer’s status as favorite uncle or aunt hinges on a fulfillment system’s ability to properly select an Xbox One, instead of one box of crayons, from the warehouse. Similarly, the fate of a brand’s reputation is linked to its ability to make the consumer’s online shopping process as convenient as possible, from purchase to delivery.