The Benefits of Supply Chain Optimization
Supply chain logistics have always been cost-driven, leading businesses to place a lot of attention on transportation logistics and manufacturing expenses. However, businesses have developed game-changing strategies designed to optimize their supply chain.
You may be wondering how you can optimize your supply chain to gain the most out of it.
You need to identify, meet, and solve the various challenges the supply chain presents to innovate within your industry.
But what are the challenges, and how can you establish a flowing supply chain with maximum ROI?
Looking at the Big Picture Pays Off in the Long Run
Local optimization within a supply chain is like putting blinders on a horse; a problem in part of the supply chain is fixed, but it causes new issues further down the chain. When it comes to running a business, the “here and now” philosophy doesn’t belong if that business wants long-term success. You need peripheral vision of the entire chain, so you can implement global optimization that guarantees future prosperity.
In early 2017, Adidas developed an omni-channel strategy with a click-and-collect test set up for their customers in Moscow. They estimated that only 10–20 orders would be placed per week where customers would buy online and collect their purchase in-store. The result far exceeded their expectations, reaching 1,000 orders in a week, and now makes up 70% of their sales.
Adidas made another change in their supply chain by offering their customers the ship-from-store and endless aisle options. “Ship from store” means customers receive their purchase from a store instead of only from a distribution centre. “Endless aisle” allows Adidas customers to order items that are locally out of stock, but in stock at other stores; the company ships the items from there as an alternative.
The bottom line is these two methods are not focused on reducing costs, but rather concentrated on increasing sales and profits over time.
Broadening the Omni-Channel Leads to More
An omni-channel shopping experience has shown to be a lucrative method to adopt within the supply chain. Remember, an omni-channel is not the same as a multi-channel.
- A multi-channel refers to the use of multiple platforms. Most businesses have chosen this method to gain the most exposure. They create a website that has a blog and they use social media accounts, such as Twitter and Facebook.
- An omni-channel provides customers with an integrated experience, meaning they have access to all platforms on all types of devices. This ensures the business’ messaging, goals, objectives, and design are reaching the broadest audience. The secret ingredient is seamlessness.
You may have heard about the online store Amazon opening physical stores. Typically, this would not be a strange sight, but with the massive store closures of decades-old household names, such as Sears and Indigo/Chapters, it seems counter-productive. This trend is becoming known as “clicks-to-bricks” and is gaining momentum because online stores are seeing the opportunity and potential sales they can amass with this extra channel.
This is where the omni-channel comes in.
Customers can make a purchase:
- by phone
- by email
- online (from a desktop or mobile device)
According to Reid Greenberg, the executive vice president of digital and eCommerce at Kantar Consulting, “Those shopping in more than one channel spend about a third more than they would on that brand otherwise.”
An omni-channel leads to repeat sales, an increase in the average order value, and an increase in the time each customer interacts with the brand.
Achieve a Successful, Data-Driven Supply Chain with Orca Intelligence
When you partner with us, we get you out of the mothballs and into this exciting technological age with software that simplifies supply chain processes. There is so much data involved when it comes to getting a product to a customer that you need the best software in the industry to keep up. Orca Intelligence has cutting-edge technology that delivers accurate information and helps you make better decisions, strengthening your supply chain. The best part? It also saves you money. Contact us today for more details!