The following guest article has been written by Craig Summers, Managing Director UK at Manhattan Associates. Manhattan Associates is a technology leader in supply chain and omnichannel commerce and designs, builds and delivers leading edge cloud and on-premises solutions so that across the store, through the network or from a fulfilment centre, retailers are ready to reap the rewards of the omnichannel marketplace.
An effective omnichannel strategy is not just about the front-end experience for the consumer; it’s about the seamless back-end processes that retailers use to navigate inventory, customers and returns through the entire infrastructure. Retailers may have invested disproportionately in optimising their front-end operations, particularly their ecommerce offering, in the last 10 to 15 years, but many are now turning their attention to their back-end processes, as they seek to harmonise and optimise their omnichannel operations. And the warehouse, a key component of a retailer’s ‘back-end processes,’ is an essential piece of this omnichannel puzzle. The need for improved speed, efficiency, visibility and accountability in today’s omnichannel environment is reverberating throughout the supply chain and influencing warehouse operations significantly.
First of all, we need to take a little trip back in time. Initially, every bricks and mortar high street store set up operations with a storefront and supporting distribution centre (DC) to replenish stock. Disruption has hit these traditional retailers hard because they have kept the existing replenishment methods but have overlaid infrastructure on top to process singles as well as bulk, whereas the new pure plays have been able to set up shop with a streamlined, dedicated ecommerce infrastructure.
The current mindset of a majority of retailers is damaging the way the warehouse is working. When the supply chain needs upgrading, the warehouse is nearly always the last consideration, because it works. Surely if it isn’t broken, don’t fix it? Well, if the warehouse is based on legacy system infrastructure and outdated processes that accommodated customer requirements from a decade ago, it’s probably high time that processes were redefined and systems upgraded. Warehouses need to work for the here and now, as well as being adaptable for the future.
In order to increase efficiency, retailers have done one of two things. They have either disrupted their current supply chain and placed ecommerce at the centre of it; or they have a parallel warehouse which is only used for ecommerce. Neither of these is particularly efficient because silos remain.
As the world of ecommerce has accelerated and retailers have invested heavily in the customer experience, it seems like they have been afraid of applying the same updates to the warehouse. If this approach carries on, the reality is that their front-end experience could crumble if the back-end is not up-to-date. You cannot build a house to stand the test of time if the foundations are unstable; the customer experience should start in the warehouse to ensure survival.
A warehouse should be efficient, scalable, agile, and be able to synchronise workloads. The ideal environment for this is the cloud, which provides the agility and scalability that retailers need and allows for innovation which is crucial as retail continues to evolve at a fast pace. In the modern warehouse, retailers should be able to do everything in one place, be it prioritising picking, processing orders or allocating workloads. Cloud is an essential platform for this as it allows retailers to manage all operations seamlessly and deal with peaks in demand without compromising ongoing operations.
As retailers look to update warehouse operations, they are likely also considering automation. “The robots are coming” might conjure up images of a fully automated warehouse with no staff, but some of the most efficient warehouses have both. Automation is key to increasing efficiency, but a good Warehouse Management System (WMS) should be able to manage manual workloads as well as creating an efficient harmony between machines and people. Automation shouldn’t be a replacement for people, it should be an addition which enables a more efficient modern workforce.
This efficiency and ability to prioritise is essential during busy periods. It is becoming a realisation for many retailers that peak is no longer limited to the run up to Christmas; peaks in sales throughout the year can be influenced by anything from World Cup fever, to uncharacteristic summers, so retailers must be prepared to deal with unpredictable highs. An efficiently built warehouse with an agile cloud system in place enables retailers to scale up their operations to accommodate these peaks without compromising the ability to fulfil orders.
It is time to stop viewing the warehouse as simply the back-end, and instead see it as the foundation for the entire customer journey. By continuing to only update the customer facing aspect of omnichannel, retailers have created inefficient silos that are costing them money. It is only by changing this mindset that the warehouse can become an agile and efficient environment where customers’ expectations are met, and that truly seamless omnichannel becomes a reality.