At the heart of everything omnichannel is inventory. The customer needs to be able to get the merchandise they want, when they want it, and through their channel of choice. There has to be inventory visibility across channels, so stores, warehouses and distribution centers can see real-time inventory levels as part of the order fulfillment process. And finally, in order to actually fulfill orders in a timely and efficient manner, inventory needs to be shared across channels.
Trenton, New Jersey, isn't the industrial powerhouse it once was, even if the slogan "Trenton Makes, the World Takes," first installed in 1935, still stands in 10-foot-tall letters across a bridge that spans the Delaware River to Pennsylvania. But a few minutes east of town, inside a warehouse belonging to Amazon, there are signs of another industrial transformation.
For many manufacturers and distributors, a seamless supply chain of highly efficient and tightly integrated business processes sharing a single unified source of accurate real-time data seems an unachievable goal. That's not surprising since such organizations are struggling to gain control over their entire supply chain using a mix of disparate systems that fail to fully mesh with one another creating silos of outdated and unreliable information.
Rapid growth in the worldwide market for warehouse automation and control systems is being driven primarily by the global boom in e-commerce, and its profound effects on fulfillment requirements, according to an ARC Advisory Group market study.
Analyst Insight: From humble beginnings at the machine control layer, warehouse systems have matured and expanded to allow visibility and control over what is happening at the machine, parcel, associate and order/wave level. When combined with data from wearables and other Internet of Things technologies, warehouse control software will drive new opportunities for distribution efficiency. – Nikko Pianetto, Group Vice President, Integrated Technology Solutions, Fortna Inc.
Ever-increasing customer expectations are forcing distributors to take a more intelligent approach to putaway, picking and labor management, says Allan Kohl, president and chief executive officer of KOM International.
Managing inventory requires skillfully balancing a variety of complicated and competing objectives. Supply management professionals responsible for inventory have to control inventory holding costs, such as warehousing and financial opportunity costs, while pursuing cost savings that may be obtained with larger purchases. They also simultaneously support ambitious customer service levels for a constantly expanding product portfolio. Of course, supply managers who focus on inventory know these pressures well.