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White Paper

Rethinking Retail Fulfillment: Driving Omni-Channel Profitability

By Alan Freeman, Senior Manager - Supply Chain Center of Excellence, TCS

 

Customers today expect retailers to know their preferences, provide short lead times and not charge excessive fees. Every omni-channel retailer's vision is to meet all of these customer expectations whilst optimizing profitability. This means dynamically determining the best 'flow path' for every order by considering factors such as costs, service expectations, inventory status, picking capacity and customer preferences. 


Evaluation of fulfillment options in real time
Figure 1: Evaluation of fulfillment options in real time

Achieving dynamic omni-channel fulfillment requires a series of building blocks to be in place, such as enabling a single view of customers, orders and inventory. Existing order management tools have their limitations with respect to dynamic fulfillment of omni-channel demands. There is a need for a solution that evaluates possible flow paths across channels in real time by scoring them, based not only on the cost of the flow path but also other relevant factors such as inventory and capacity.

To drive omni-channel profitability, retailers need to incentivize the customers to encourage him/her to shift the demand fulfillment to the best scored flow path which not only caters to the expectation of the omni-channel customer but also be a profitable one for the retailer. This paper discusses two possible scenarios that illustrate how a retailer can optimize omni-channel profitability by dynamically determining the best flow path for the customer order and incentivizing the customer when a channel-shift is necessitated. Figure 1 illustrates one of the scenarios.

The paper further discusses that a Business Process Management (BPM) software when supplemented with real-time actionable data, can effectively address dynamic omni-channel fulfillment requirements.