The word omnichannel fulfillment has been an up-and-coming term recently. But what exactly does it mean?
Omnichannel fulfillment is an order fulfillment strategy that centralizes and enables businesses to facilitate and streamline the various shopping methods available to consumers. It is a multichannel approach to sales. This seamless approach to order fulfillment ultimately provides consumers with a uniform, consistent shopping experience whether they shop online, on social networks, or in brick-and-mortar stores.
Businesses can do omnichannel fulfillment on their own, however, it can get expensive and paperwork heavy. Utilizing an order fulfillment company or 3PL (third-party logistics) with omnichannel fulfillment capabilities can make it easy for the business.
The Fulfillment Company
In the order fulfillment company, omnichannel is the strategy and process that treats inventory as available to all channels (e-commerce, store replenishment, and wholesale) from one location. While the internal fulfillment process may diverge to optimize the operations, the outbound process only diverges at the point of pack out and shipping.
Omnichannel fulfillment allows fulfillment companies to deliver goods to multiple channels using a single facility with a single workforce, delivering from a single inventory. The channel dictates the order size, delivery requirements, packaging, shipment method, and rules for handling shortages.
The order fulfillment company can provide a business with optimized omnichannel fulfillment, but only if the back-end technology is highly reliable and efficient. Your fulfillment company must be poised and ready to support your back-end fulfillment model for all types of consumer goods and products.
This often means the 3PL will need to have expertise in B2C (DTC) and B2B order fulfillment. Many 3PLs have limited B2B capabilities and client restrictions. Some 3PLs may only take on clients for omnichannel order fulfillment if the B2B portion of the business is less than 20%.
So, what does a business do if they have more than 20% of its orders are B2B or its current 3PL cannot handle omnichannel fulfillment?
Convoluted Simplicity or Simply Convoluted?
Omnichannel solutions can operate differently depending on the order fulfillment company. Many 3PLs run orders that could be grouped into waves, batches, or single orders, as is common for most pick-n-pack operations.
Thus, customer orders or product demand is entered into the worker’s pick list as soon as the client transmits the order via a shopping cart integration. These shopping cart integrations are entered for processing at the distribution center almost immediately. This streamlined process promotes both fulfillment flexibility and processing speed.
In such operations, associates doing the picking don’t know whether they are picking for multiple marketplaces such as an online order or a store order. Depending on the 3PLs warehouse management system, associates pick orders with the least amount of steps possible. This is achieved through increased automation and quality controls to ensure accuracy.
B2B or wholesale orders have more variety. They can be multi-box or palletized. Multi-box orders often include a variety of SKUs and are shipped to a brick-and-mortar store. Palletized orders contain several boxes (either multi-box or single box) and are destined for distribution centers or brick-and-mortar stores.
The process flow for picking these orders varies from the B2C order fulfillment. A 3PL needs to have experience processing and shipping these orders as they often have some lengthy paperwork associated with the orders such as Bills of Lading.
Warehouse Management Systems (WMS)
The warehouse management system (WMS) is designed so that items can be selected simultaneously for any channel requirements. WMS Software is what makes warehouse and inventory management possible throughout the omnichannel order fulfillment process. The software needs to be able to handle various order types while finding the most cost-efficient way to sort SKUs based on physical characteristics, SKU velocity, and order profiles. It must be able to service multiple channels and allocate proper levels of inventory based on the demand and forecasting of each channel.
In some cases, omnichannel fulfillment methods can reduce repetitive activities for different distribution channels. 3PLs with a robust WMS ensure products are allocated correctly for all the channels equally or as demand warrants.
A WMS provides the ability to move around product quantities to channels that may have higher demand or are running low. This is the flexibility required for a successful Omnichannel supply chain operation. AMS is one of the leaders in providing this with its software sophistication and years of experience working within a multi-channel distribution and fulfillment environment.
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