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The Supply Chain Meets the Omnichannel

Piyush Sampat, principal with Deloitte Consulting LLP, charts the maturity of retailers' efforts to adapt to the omnichannel. Integration of online and store fulfillment remains a challenge, he says.

The Supply Chain Meets the Omnichannel

Retailers are making many changes in response to the emergence of the omnichannel, says Sampat. “More and more, customers are expecting retailers to be able to serve them in a seamless manner.”

In response, retailers are focusing on three fundamental areas: inventory productivity, flexible fulfillment and the ability to adapt to the unknown, caused by shifting customer demand.

Inventories must be integrated across the supply chain if retailers are to fulfill orders placed online, as well as items purchased at brick-and-mortar stores. They need to avoid situations in which product is sitting in one sales channel while it’s out of stock in another.

Retailers are in the early stages of their journey toward omnichannel fulfillment. They’re still figuring out how to make inventory available across the supply chain. Some are turning their stores into fulfillment hubs, while others are transforming traditional distribution centers into operations that can serve e-commerce purchases.

The result is a blurring of the lines between store and e-commerce activity. “The term ‘omnichannel’ has been used a lot,” says Sampat, “but it’s really the retailing of the future.”

New investments are being targeted at boosting inventory productivity. Retailers need an accurate picture of where product resides, and how much is there. At the same time, they’re working to build “agile, flexible and scalable” supply chains from end to end.

“You start breaking down organizational behaviors, systems and processes to form a single supply chain,” regardless of sales channel, Sampat says.

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