Should Micro-Fulfillment Be Part of Your Retail Fulfillment Strategy?
A distributed order management system combined with an inventory management system (with RFID scanning) would enable order fulfillment from stores while also capturing spent inventory (through scans, online orders or POS) providing a real-time view of inventory, regardless of where or when an item is picked.
Agile Inventory Replenishment
There’s no question that balancing inventory levels over potentially hundreds of locations will present more complexity than managing inventory in a single location. For an in-store fulfillment strategy that ensures customer satisfaction while minimizing costs, retailers will need to develop dynamic inventory planning and allocation processes to track sales and closely monitor stock levels.
This would also mean strong collaboration between digital and planning teams to forecast demand by geographic region and ramp up stock if necessary.
Indeed, micro-fulfillment ushers in complexity to retail operations, but the accompanying competitive advantages are substantial. Retailers have the potential to increase overall efficiency, while reducing last mile shipping costs and improving customer satisfaction. That means delivering on brand promise, improving customer loyalty and maintaining profit margins at the same time.
Should retailers introduce micro-fulfillment into the mix? Absolutely. But it’s not just a flick of the switch. Smart planning and implementation are key. In addition to technological investments, retailers will need to delve into business processes to ensure they are cost-effective and resilient to sudden business shifts.
Successfully implementing a micro-fulfillment strategy can make a dramatic impact on the bottom line and opens the door to more omnichannel strategies.
David Mascitto is retail e-commerce supply chain product marketing manager at Tecsys.