Omni Channel shopping, purchasing and delivery requires inventory management to be extended across channels to support the entire range of options required to support omni channel retail.  The inventory visibility and extension across all potential shopping, purchasing and delivery channels provides the foundation and framework to support a true omni channel environment.  Retailers must open this foundation to the shopping and purchasing services whether they are from a retail store, online or blended.  The channel for retailers is to provide the inventory framework that opens availability across all channels and allows purchase across all channels.  In order to survive retailers must extend their inventory capabilities and not differentiate between channel or delivery method.

 

Retailers should not be fooled by the increase in Internet sales to believe that they can simply provide consumers the option to shop and order products from the Internet.  Most retailers speak of an omni channel experience and then their execution is still separated by channel, in other words multi-channel.  Each channel provides services that are distinct to the channel.  While retailers may have developed and blended inventory visibility at the distribution center level this visibility disappears when the inventory is shipped to the retail store channel.  This practice does not provide the necessary visibility to easily fill online sales from the retail stores.  Consumers expect now the option to shop and purchase as they desire and from any channel, this means that retailers must change their inventory management practices to extend across all channels and all times.

 

This is a dramatic change for the large legacy retailers and requires they define each of the retail stores as a warehouse in their inventory systems to provide the visibility to the inventory.  Then in addition this also requires a robust order routing and management system to allow for the efficient inventory consumption and replenishment across all locations and to any delivery point.  This is needless to say a dramatic change to the retailer inventory management practices and requires a change in systems and the operating management practices supporting sales. 

 

In my experience this can be extremely difficult for retailers because the legacy systems are not flexible and conducive to quickly change the management and visibility capabilities.  In addition to the systems there is also a physical process and procedures revisions that is probably more difficult to implement because of the preparation and implementation requirements, this includes the revisions required to support heightened inventory management and control procedures required to support efficient omni channel capabilities.  These requirements are now baseline to the consumer expectations though and must be supported by the retailer practices.

 

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?