The need for transparency in retail supply chains is becoming more critical than ever. The continued growth of the retail eCommerce sector requires brick and mortar retailers to compete with the pure eCommerce sites through their own eCommerce sites and stores. It is the ability to know sooner, so that action can be taken as quickly as possible to correct, mitigate or even capitalize upon the situation that exists. Transparency begins before an order is ever taken and begins with the evaluation and determination of the anticipated customer demand, and where it’s expected to be seen. For retailers this demand statement must consider all channel options and go beyond the traditional store-level fulfillment to encompass all options for ordering anywhere and fulfilling from anywhere that the business endorses. For this reason, transparency in the retail supply chain must also extend beyond the four walls of the organization in order to provide greater visibility into customer plans, supplier and trading partner activities. Collaboration is the key!1

All organizations work with third party providers in the area of logistics, even when companies have their own fleets. Due to omni-channel demands, parcel shipments have increased for brick and mortar retailers as they have been challenged to support multiple order/shipment combinations rather than just from their own DC (distribution center) to their stores. Any shift from bulk to parcel is an increase in rates of 3x-5x as an order of magnitude. As a result, managing the outbound orchestration for omni-channel fulfillment now plays an even more critical role in the process of managing costs.

Outbound Omni-Channel Orchestration involves managing the outbound movement of goods to the store or direct to the customer as the last step in fulfilling a customer order or making the product available to sell through a store. Basic visibility to outbound in-transit information is the minimum requirement to provide order/product/shipment movement across the organization. Figure 1 indicates the core functionality needed to orchestrate the outbound flow of goods. The Best-in-Class show a significant advantage in the adoption of these capabilities – in some cases by a factor of 2x as likely.

Figure 1: Outbound Omni-Channel Orchestration


Source: Aberdeen Group, March 2016

Having the visibility is a must-have capability in order to have access to key supply chain information needed for decision making. For outbound movement, status by order is now a necessity and is required by customers who are tracking their direct shipment or “pick up in store” orders. For retailers, it may be necessary to reroute product from one store to the next in order satisfy demand. Those decisions can be made on the fly when there is transparency in the outbound orchestration process, rather than waiting until goods are received and inventories are updated.

Time is the critical factor in meeting customer expectations, and having the technology to improve efficiency is critical to transparency. Being able to have all order and labeling in place ahead of time for direct customer shipments may enable same day shipment rather than efficiency killing handoffs between systems that increase process latency. Being able to see the capacity constraints with transparent partner collaboration can facilitate rebalancing of loads and help to avoid bottlenecks, rather than finding out “after the fact” on shipments.

All of these orchestration capabilities must be supported by performance measurements in order to know whether processes are effective or not and to establish baselines from which improvement can be measured, thus providing transparency in performance. Outbound omni-channel orchestration processes depend on upstream processes working in seamless orchestration with the execution and fulfillment in a closed-loop manner. The Best-in-Class have a significant advantage in all outbound orchestration capabilities and as seen from our recent research, Creating Transparency in Your Retail Supply Chain, their performance warrants consideration by all companies regarding the strategies and capabilities that they have in place.


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