The Best Ways to Combat Omnichannel Logistics

 

Summary

The distribution of goods to modern consumers should be convenient, affordable, and offer a variety of payment choices and delivery windows.

Running a seamless and effective omnichannel logistical operation with the aid of contemporary tech tools and systems is the only way to accomplish this.

Omni-Channel Logistics: What is it?

The practice of combining manufacturing, inventory, and distribution across all sales channels, whether conventional offline channels like brick and mortar stores or contemporary online channels like eCommerce sites and social media, could be referred to as omnichannel logistics.

Ecosystems can only achieve seamless omnichannel logistics when all supply-chain participants — including manufacturers, distributors, wholesalers, and retailers — cooperate closely to reach the same end result, which is delivering excellent customer service.

What are some omnichannel logistics challenges?

A paradigm shift in consumer behavior has been brought about by the phenomena of internet purchasing. The modern consumer shops in a variety of ways are always shopping, and buys anything from groceries to furniture, clothing to medicine, and more! Additionally, buyers are always eager and seek out immediate pleasure.

What does all of this mean for businesses, though? It implies that suppliers must be accessible and have ready inventory around-the-clock. Delivery logistics, including the omnichannel setup, must always be on time because delivery time is a key factor in the customer’s consideration set.

As you can expect, this is not a simple process, and logistics managers frequently encounter difficult obstacles and difficulties.

Let’s examine a few:

1. Siloed logistical procedures: In reality, today’s markets are one vast, interconnected ecosystem. For instance, a shipment of an order from a customer in London is made from a storeroom in Singapore using components assembled for manufacture across Asia. It would appear that boundaries don’t exist anymore. The issue with supply chains is that historically, they have tended to operate in silos with no interchange between them; these fragmented systems are the biggest barriers to constructing multichannel logistics.

2) Legacy (manual) inventory systems: Regrettably, a lot of businesses continue to employ manual inventory management systems, making it hard to offer the real-time visibility and transparency that customers today have grown accustomed to. Furthermore, this limits the development of a seamless omnichannel network and leads to problems in erroneous data, delays in order fulfillment, and inaccuracies.

3. New technology: Consumers are increasingly using delivery logistics, such as same-day and 24-hour delivery, to distinguish between you and your competition.

In today’s hectic company environment, which operates around the clock across borders and time zones, it becomes hard to meet consumer needs without implementing new tech-driven systems like dispatch software, cloud-based worldwide systems, etc.

4) Ineffective reverse logistics: Order returns are unavoidable in the world of online shopping — they are the sun’s shadow and its yin.

Customer retention depends heavily on the customer experience, which includes the reverse logistics procedure. Additionally, managing order returns would become virtually impossible without strong omnichannel logistics in place. Remember that a client may return an order owing to a shortcoming of some kind. In addition, if the return process is unpleasant, you may end up with a very furious customer who is unlikely to return. In order for reverse logistics to be useful in your omnichannel network, it must be digitized and made simpler.

5) Poor 3PL selection: The success of the collaboration depends heavily on choosing a 3PL that adheres to your company criteria. However, businesses frequently choose based on the wrong factors, such as pricing and reputation, neglecting important KPIs like competence in their field and familiarity with the routes/locations where they must deliver goods or source materials.

Success in omnichannel logistics depends on five factors.

The success of omnichannel depends on the following five levers:

1) Automation of the warehouse: It’s surprising how many logistics companies still run largely manual facilities. Automation is crucial in a number of other areas, including maintaining cost-efficiency, managing a large number of SKUs driven by e-commerce, multiple touch-points, managing inventory, and supply-chain management, in addition to being increasingly important for meeting the demanding standards of today’s logistics (etc.).

The continual struggle between cost and efficiency can only be won by 3PLs with enough automation in today’s complex logistics environment.

2) Data analytics, APIs, and integration: As was already noted, logistics players must implement modern automation in order to meet current standards. A 3PL system must be agile, flexible, and simple to interface with the many stakeholders it interacts with throughout the supply chain in addition to warehouse automation.

3)Heavy CapEx in a fluctuating eco-system: Having noted the aforementioned, keep in mind that achieving anything is never simple. Automation is expensive and has a long gestation time, just as other capital expenditures (CapEx) like a warehouse, fleet vehicles, etc. However, the demand for 3PL services frequently exhibits notable peaks and dips. For instance, during holiday seasons and other promotional occasions like “Amazon-Day,” demand is frequently two to three times higher. Making the decision between preparing resources for typical vs peak periods is never easy.

It would be a good idea for all parties involved, including contract players, to agree on a practical “Base+ Model” where customers and logistics providers can reach an understanding of a fixed cost that covers their base volumes over a 12-month cycle while taking into account rates and resources needed during peak demand periods.

4) Logistics firms must maintain a healthy client mix: By selling their warehouse space and services and remaining profitably deployed across all channels year-round, 3PLs can accomplish a lucrative year-round operation by maintaining a healthy client mix across industries, and sizes of business, locational preferences, etc.

5) Last-mile delivery: The “culmination” of all other dials is perhaps the most crucial step in mastering omnichannel logistics. Failure will come sooner rather than later for logistics companies that don’t perfect their last-mile deliveries.

Running a strong last-mile delivery operation, on the other hand, will guarantee quick deliveries, effective cost-management, resource efficiency, flexibility, and deep insight produced by powerful data analytics (etc.). All of this eventually results in effective omnichannel management and client retention.

Conclusion: It is clear that it is difficult to master the omnichannel logistics processes of today’s intricate supply-chain networks. It necessitates much planning, commitment, and work. Importantly, success depends on utilizing contemporary tools like last mile delivery software.

Read More: Last Mile Delivery Software