Blog Posts Omnichannel Operations Require Sophisticated Systems, Study Shows

Omnichannel Operations Require Sophisticated Systems, Study Shows

An overwhelming 78 percent of America’s e-retailers are planning to increase tech spending in 2018, more than a third of which will boost spending by 15% of more, according to Internet Retailer’s “2018 Guide to E-Commerce Technology.”

Clearly, these companies see the writing on the wall. Robust technology is at the heart of effective omnichannel operations. In our recent omnichannel fulfillment and distribution survey, we asked manufacturers, retailers, and ecommerce companies about their use of technology. Responses revealed that there’s room for improvement.

Following is an excerpt from Ready or Not: Omnichannel Fulfillment & Distribution

The role of technology

For optimal effectiveness, today’s omnichannel supply chains require sophisticated technology in order to provide real-time information, optimize inventory, ensure seamless service and offer a variety of delivery options.

Companies use a range of technology solutions to support their order fulfillment operations – from forecasting/demand planning (60.5 percent) to inventory management solutions (55.6 percent) to order management systems (45.7 percent).

Even with these systems in place, 27.8 percent of respondents say that “technology limitations” are one of their top challenges related to order management, fulfillment and distribution.

When asked to cite specific challenges, one respondent reported being challenged with the “ability for one system to manage inventory across the network (DC, retail).” Another said, “Shuttle systems will be required to meet growing need, but ROI is very tough due to excessive cost.” Yet another said they need “tailor-made solutions both mechanically and with software to handle our growth in e-commerce order fulfillment and inventory storage.”

Clearly, there’s opportunity for improvement. Historically, the logistics industry has been slow to adopt to new technologies, but incorporating sophisticated systems is critical to help companies move their omnichannel operations forward.

“A robust omnichannel technology solution can help to address many of the problem areas identified in our survey,” Belcastro says. “Visibility, inventory management across multiple locations, order-processing speed, reporting and analysis, seamless services… all of these challenges are rooted in technology.

It is a sticking point, however, as many companies are reluctant to make the required overhead investment or lack time or internal expertise to manage and stay abreast of ever-changing technology. In this case, Belcastro recommends seeking a third-party partner to shoulder the burden.

To learn more about the current state of the omnichannel supply chain, industry trends, the use of outsourcing and more, read the whitepaper.