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04/08/2014

The Good Old Days Weren't That Great: How a WMS Drives Efficiency in Today's Complex Omnichannel Supply Chains

Remember the good old days when your warehouse was just a warehouse? The merchandise arrived, your team documented it and then shipped out the items as orders came in.

Today, customers want to order your merchandise however they want, whenever they want, and have it delivered wherever they want: online, in-store, mobile, phone and more. This omnichannel marketplace, combined with changing trends, innumerable SKUs, varying return processes and seasonal considerations – not to mention your razor-thin profit margins – are quickly changing how apparel companies approach warehouse operations.

But the changing face of retail is not a bad thing. Rather, the opportunity to optimize your warehouse for this new model will lead to greater operational efficiencies, a broader visibility of your supply chain and ultimately a superior customer experience.

The backbone of omnichannel operations
A warehouse management system (WMS) is the backbone of any omnichannel retail operation: It bridges the online and in-store consumer experience to optimize the shopper's time and serves as the primary integration point between the online and in-store activities, as well as between the retail store and warehouse environment. But regardless of the channel, one thing is consistent across all of them: the need for accurate and efficient fulfillment.

At the desired moment of purchase, the retailer must know what is available and the best way to fulfill the order. The key is maintaining accurate inventory counts at every stocking location from which fulfillment can occur, as well as understanding what inventory is on its way into those locations and when it will arrive. The right WMS can be the central component to inventory management and overall visibility.

A typical retail apparel warehouse must handle all kinds of order fulfillment, including many different units of measurement, flexible value-added services, e-commerce and shipping systems that support multi-carrier parcel, LTL and full-truck shipments. The flow-through capability of a WMS and its ability to integrate with material handling equipment provide significant optimization benefits for most retailers, such as being the ultimate master database of all transactions affecting inventory—the hub for improving overall supply chain execution and providing a great omnichannel experience.

Managing the warehouse beyond the four walls
To meet the needs of omnichannel apparel companies, WMS functionalities have expanded out to a store's back office, onto the retail floor and even integrated with POS systems. This enables real-time control and greater visibility of all inventory, giving retailers the ability to better track items in the event of a recall or quickly react to product shortages for replenishment to minimize stock-out surprises.

In an omnichannel environment, this visibility allows you to source products from non-traditional locations, such as from your brick-and-mortar store, and deliver it to the customer faster. Some manufacturers even have a vendor portal for their WMS, which provides you with greater visibility into their merchandise supply chain and better planning for labor activity and outbound activity to stores.

A number of retailers are experimenting with flash retailing, which is the opening of a short-term sales space. This event requires extremely high accuracy and real-time feedback to web store-fronts to assure e-commerce customers of product availability and delivery. The key is maintaining accurate inventory counts at every possible stocking location from which fulfillment can occur, as well as understanding what inventory is on its way into those locations and when it will arrive. With this information readily available, retailers can quickly tell the consumer what is in stock and when they can receive it. Or in cases where an item is not in stock, but available in another fulfillment location, the retailer can still capture the order and commit to a timely delivery.

Consumer demands are changing and the expectation of being able to buy, fulfill and return anywhere means that you have to be creative and proactive with your warehouse strategies. For those omnichannel retailers with a flexible warehouse management system, the integration of in-store activities with varying order sources will not only optimize warehouse activities but also improve the entire supply chain.

Managing the warehouse from the cloud
You have to be flexible in an omnichannel environment and you should expect the same from your WMS. This need for flexibility and scalability is driving more retailers to choose cloud-based WMS software that can be dialed up or down depending on business needs throughout the year.

With a cloud-based WMS, your vendor hosts the software application and hardware infrastructure for you as an on-demand, scalable service. It shifts the burden of technology administration to the technology experts; there is no hardware to purchase or maintain, patches and upgrades are done automatically, implementation is dramatically simplified and no capital expenditure is required. You access the WMS via a Web browser and gain all of its functional benefits without the up-front costs and drain on your IT team. And because the cloud is elastic, you can access more power when you need it for seasonal changes or demand spikes.

A tool for today and into the future
A WMS is the critical foundation for tracking inventory in real-time in an omnichannel retail environment. It is the key point for managing all activities and equipment within a warehouse, and can extend its reach into the field to better optimize what happens within the warehouse and outside of it. With a system that can accomplish all of this while helping you run more efficiently, giving you greater supply chain visibility and providing better customer service, suddenly the "good old days" may not seem so great anymore.  


Gary Nemmers is the senior vice president and general manager, supply chain execution group, at HighJump Software. He is responsible for all operations pertaining to the supply chain solutions group, including strategy, general management, sales, professional services and marketing. His role encompasses growing and servicing the supply chain management offering through direct and indirect channels worldwide.