TMS-Enabled Omnichannel Supply Chains Gearing Up for the Peak Season Challenge
By on Oct 26, 2016
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The 2016 holiday shopping season is expected to deliver increased sales volumes—and new challenges for retailers as they continue to develop omnichannel supply chain models in response to changing consumer buying patterns.
Transportation management system (TMS) technology is playing a key role. Competing in a multichannel environment requires a number of critical capabilities—such as a 360-degree view of fulfillment operations—that TMS solutions are uniquely equipped to support.
Essential tool
The National Retail Federation expects retail sales in November and December, excluding autos, gas, and restaurant sales, to increase a solid 3.6% to reach $655.8 billion—significantly above the seven-year average of 3.4% since 2009. NRF also is forecasting non-store sales to increase between 7 – 10% to as much as $117 billion. Retail analyst RetailNext Inc. expects a 3.2% year-over-year lift in sales over the forthcoming holiday period. This performance will be driven partly by a 14.9% year-over-year increase in sales through digital channels, according to the firm.
As these figures underline, today’s consumers expect to complete purchases via bricks-and-mortar and online channels at their convenience. And they demand superb service at the lowest cost.
Omnichannel supply chain models must manage freight flows to meet these demands—which is why TMS technology has become an indispensable component of omnichannel operations.
As the TMC white paper Improve Multichannel Supply Chain Management with TMS Technology explains, “optimizing cross-channel freight flows across scores of nodes—and delivering product unerringly to end consumers globally—requires a strategic mix of capabilities. It requires deep TMS expertise and the flexibility to develop new functionality to meet fast-changing multichannel demands.”
For example, proactive event management and on-time delivery performance are extremely important in the omnichannel world. Given the sheer number of events that have to be managed as freight moves between channels, and the volume of information generated, it is essential that shippers can link milestones to automated activity tracking and quickly flag exceptions.
TMS solutions helps shippers meet demands like these in four important ways.
Defining, capturing, and measuring milestones customized to each channel. Multichannel shippers can ship directly from their suppliers and contract manufacturers to end customers, to standard retail distribution channels, or to brick-and-mortar stores. Alternatively, they can choose a hybrid solution based on these options. A TMS adds value by defining the milestones in each channel, and capturing them in any region across multiple service providers.
Focusing on exceptions—not every event. A TMS automatically pinpoints important anomalies, relieving the shipper of the need to evaluate every event and related piece of information.
Delivering the right information. Another way in which TMS technology lightens the information management burden is by disseminating targeted facts and figures to relevant recipients.
Capturing a complete view. Rather than trying to piece together the logistics picture from disparate sources—and there many in a multichannel operation—a TMS generates a holistic view of the supply chain. TMS with integrated business intelligent tools highlight trends and opportunities from multiple channels. This holistic view promotes faster, more accurate decision-making.
Learning from experience
Omnichannel supply chains have come a long way over the last several years, but this year’s peak shopping season will provide a stern test for retailers and logistics service providers. The lessons learned will help companies refine their omnichannel platforms—and the TMS solutions that have become an integral part of this new retailing model.
For additional information on how a TMS can address challenges of multichannel operations and drive better results, download our white paper “Improve Multichannel Supply Chain Management with TMS Technology.”