The State of Multichannel Fulfillment

The Internet, along with advances in e-commerce, mobile technology, social media and wireless networks, has revolutionized the art of buying and selling.

It wasn’t too long ago that a consumer had to physically drive to a store to purchase an item and have it in hand. With Internet access on a smart phone, today’s consumer can purchase anything, anywhere, anytime and it would then be delivered to him.

This “anything, anytime, anywhere” mentality might be a boon to the consumer, but it has inevitably introduced layers of complexities to order fulfillment operations.

In a recent study sponsored by Honeywell Scanning & Mobility and conducted by Peerless Research Group on behalf of Logistics Management and Supply Chain Management Review, more sophisticated customer demands are pushing today’s logistics and supply chain managers to fulfill more orders faster and at lower costs.

The processing and management of the orders themselves have gotten more complicated as each selling channel produces different order profiles, requiring a variety of channel-specific order picking approaches. Instead of fulfillment for just one channel, managers are adopting multi-channel distribution strategies that may span multiple facilities.

As the number of facilities increase, real-time visibility into inventory becomes even more essential for order fulfillment success.

We surveyed 469 managers of supply chains and distribution operations across a broad range of industries to examine the current state of order fulfillment and distribution and to investigate how multiple market channels are impacting the processing of orders.

Respondents are primarily from manufacturing industries (50%), retail (15%), and high technology (10%). A wide array of business sizes is also well represented: 31% are employed with smaller companies (under $100M in annual revenues), 38% are from mid-sized firms ($100M - $999.9M), and 31% work in larger corporations ($1B or more). Twenty percent of respondents serve primarily end-consumers (B2C), while 40 percent provide B2B products and solutions; and another 40 percent cater to both B2C and B2B.

This study also covers in depth the following segments:

• The state of order fulfillment: Faster and more efficient
• Selling on multiple channels
• Dissecting the multi-channel distribution strategy
• Software and hardware investments in multi-channel distribution
• Benefits and pain points

Using mobile applications on smart phones and tablets, today’s consumers are able to compare prices and read product reviews while on the move.

To service this new omni-channel consumer, retailers are stepping up and flowing product information across multiple channels to capture customers’ attention and make the sale.

Logistics managers must also step up and process more orders more efficiently and at lower costs. Most are adopting multiple order fulfillment and distribution strategies for each selling channel.

Most are employing multiple DCs, each with channel-specific picking subsystems. While they may at times outsource specific tasks for order fulfillment, most are planning to handle order fulfillment and distribution task in-house.

Inventory management and end-to-end visibility of this inventory are both at the forefront of many managers’ concerns as they determine the most cost-effective way to allocate inventory to the proper channels.