What is Omnichannel Logistics

3 mn read

Purchasing items online has never been more popular. With so many customers using multiple channels to buy products from a single company, utilizing omnichannel logistics is key to the success of any business. But what is omnichannel logistics exactly? Well the process allows businesses to tailor how their products are purchased and delivered to meet the needs of the modern customer. Consumers expect to find the products they want both in-store and online and use technology to make purchases quickly and effectively delivered right to their doorstep. If the company is utilizing this process properly, the consumer will get their product the very next day making them satisfied and allowing the company to deliver more orders. The expectation consumers project towards companies offering next day delivery has made businesses better understand their supply chain to ensure cost-effective on-time delivery. This is where omnichannel logistics comes into play.

An omnichannel logistics strategy seeks to synchronize inventory, logistics and distribution functions across all sales channels to meet customer demands. A successful logistics strategy enables supply chain professionals to synchronize inventory flow across all sales channels. However, there are still challenges that these strategies face. Below I’ve outlined some of the main challenges an omnichannel logistics strategy faces.

Challenges for Omnichannel Logistics

1.     Inventory Visibility

In the fast-paced world we live in, it’s important for companies to know the status of their inventory and whether it’s at a distribution center or retail location. Not being able to follow through on a next-day delivery can be tragic for a company especially if they fall behind through the holiday seasons. Businesses must develop an efficient order fulfillment process by using a warehouse management system. A warehouse management system (WMS) is a software solution that offers visibility into a business’ entire inventory and manages supply chain fulfillment operations from the distribution center to the store shelf. It’s important to track inventory related metrics in order to indicate a supply chains efficiency and cost-efficiency as products flow through distribution to retail locations, distributors and wholesalers, until finally reaching the consumer.

2.     Transit/Transportation

Generally, major companies have poor visibility into inventory when in transit, increasing demand for real-time freight visibility solutions. These solutions not only enable visibility into shipments and trucks, but also into orders. These solutions also optimize communication between trading partners and the company enabling the exchange of data and information. Machine learning capabilities have begun to be used with these solutions getting a broader set of data sources to enable predictive capabilities and determine more accurate arrival times.

Understanding these solutions is one challenge, the next is transportation efficiency. There are multiple ways for a product to go from a storefront or a distribution centre to the customer. The challenge here is to find the most effective and efficient transportation solution with the least amount of travel time and costs. Selecting the right shipping method when transporting products will keep customers satisfied.

3.     3PL Strategies

Third-party logistics (3PL), is a variety of services and processes that are provided to a business by an external company. 3PL helps with reducing costs, improving efficiencies and expand capabilities. A successful 3PL is an operations manager, a strategic consultant and an IT provider all in one. All of these skills make inventory optimization and omnichannel fulfillments much easier to attain. Omnichannel logistics provides the consumer with a seamless shopping experience. The right 3PL partner can use its retail and shipping industry knowledge and supply chain experience to address the challenges of omnichannel logistics.

The Importance of Omnichannel Logistics

Strategies for omnichannel logistics need to synchronize inventory, logistics and distribution functions across all sales channels to meet customer demands. A successful omnichannel logistics strategy will manage inventory and transportation efficiently and use 3PL to help reduce costs, improve efficiencies and expand the capabilities of a company.

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