5 Reasons Total Supply Chain Visibility Will Rule in 2024

Customer expectations have gone through a number of changes in a short few years. Everyone was chasing the ability to offer two-day shipping, but the need for speed is trending down, with 85 percent of customers not opening their packages on the first day. We’ve seen a creative resurgence in retail offerings, blurring the barrier between virtual and physical offerings.

However, a blurred barrier is still a barrier.  

Customers just want to buy things. They've shown increasing willingness to abandon any technology or process that makes buying from you harder. They want a frictionless experience that places all your product — regardless of source — in front of them.  

As we begin 2024, your order management system alongside your ability to predict uncertainty and maintain control will be the differentiating factors for brands that dabble in the marketplace vs. those that are dominating it.  

Value 1: Everything, Everywhere, Add to Cart

Inventory is the largest line item on a retailer’s balance sheet, only rivaled by its real estate. For most firms, the keep-drop-add process is an annual exercise in identifying what will and will not drive revenue. Aging and obsolete inventory reports are the litmus test of how this process went for you each year. Poor add decisions could tie up working capital for years or, worse, end in a write-off.

What if it didn’t have to be that way?

Marketplaces have come to dominate the e-commerce landscape, but their full power is rarely leveraged. Often the focus is on presenting procured goods to the customer, but it doesn’t have to be in YOUR warehouse.  

Order management software and DOM (distributed order management) only need to consider available inventory. No one said you have to warehouse it — or even own it. You just have to have certainty about it.

Available-to-promise (ATP) could be your inventory, your vendors’ inventory, or another retailer in your trade network. You're only concerned with accuracy and regularly updated quantities. With the right tools, you can offer an enormous catalog of goods without the feast or famine of owning everything to find out if your customers want it.

Value 2: It’s in the 'Where-House'

Not so long ago, geofencing and channel protections on inventory were the next big thing. Each channel was run in isolation and had an internal team tracked and commissioned off turf defense.  

Technology was needed to guard inventory from being purchased the “wrong way.”  

Re-read that sentence. If it causes you to scratch your head, then you're a modern shopper. Why don’t you want to sell me something? Does it really matter to the CUSTOMER if you sell it online or in-store?  

They want convenience and price parity. They actively oppose and flee friction.

It’s critical to your revenue and inventory turns to show your true available-to-promise. The customer only cares that you have it. They're insensitive to ship-from-fulfillment center, store, third party, or vendor. They want to purchase.

Order Management and DOM Re-Imagines Things

Modern order management and DOM does the heavy lifting in the background. Take the order and let the system compute the ideal location for fulfillment. The DOM does the hard work of tracking sellable inventory, modes and cost of fulfillment, and whether the service-level agreement (SLA) is satisfied. No manual calculations; only customer satisfaction.  

You have product to move. 

Value 3: Slow it Down, Reap the Benefits

As The Wall Street Journal pointed out, online shopping’s fast delivery race is slowing down. Customers are prioritizing the cost of procurement over the speed of delivery. If you aren’t going to use it immediately, why pay for overnight? It’s not better because I got it faster; it just costs more.

Savvy customers also realize that if they aren’t paying for the shipping directly, it’s buried in the price or service fees. This all plays into how they're considering price and service when choosing to purchase or not. 

SaaS OMS software has a unique advantage in that it's not reliant on static lead times or annual rate table updates when optimizing the process. The customer receives the best cost-to-serve in line with the service expected.

On the inventory side, consistency and predictability removes variance and noise from forecasts. If you have more time to fill an order, you can reduce safety stock and better tune your average order quantities to reflect the amount that will be consumed in the lead-time window. This is difficult, if not impossible, when the SLA drives the execution time well below the replenishment lead time.  

An added benefit is that all of this information can be shared with your vendors and network collaborators, moving the operation closer to JIT, removing waste, and freeing working capital along the way.

Value 4: Let the Customer Choose

What’s better than decisions made for you? Ones you make for yourself. For that to work, options must be presented — and in a highly efficient way so you don’t lose the sale.

So much of decision making has been removed from the customer in recent years for the sake of simplifying business operations. If you’ve dealt with anyone over the age of three, you know the more control is taken away, the more it’s craved and appreciated.  

Optionality is King!

While you may assume consumers want orders fast, cheap, or both, that might not be the goal. Maybe they want it in three weeks when the rest of their project materials arrive? Maybe they need it overnight? Maybe it needs to be picked up in an alternative and more convenient location? As important as "what the customer wants" are "when and how they need it."

If you provide a variety of SLAs — and their associated costs — you give the customer an underappreciated service offering: choice.  

Order management and DOM aren’t just for routing orders; they can intelligently delay processing based on the desired delivery date as well. Delayed order processing to the date the customer truly needs it, paired with customers not opening their overnight packages, means that less money must be spent expediting packages that weren’t needed expeditiously.  

From an operations perspective, this means that you can start creating very accurate forecasts of labor and shift needs, as well as looking at pairing the inbound cadence to outbound commitments. Choice becomes a customer service that smooths out execution at the same time.

Value 5: Better Information, Best Decisions

The combination of the previous threads is simple. The best customer service requires presenting timely and transparent information to your customers. It starts with the purchasing process and flows through to execution.  

While not every customer wants to physically pick up their purchase, there is a segment who will browse online, see the option and prefer in-store pickup.  

Knowing where inventory is, in real time, is a valuable insight when a customer is making their decision. Will they shop online? Can they pick it up in-store? What does that experience look like?

Studies have found that the buy online, pick up in-store (BOPIS) option almost always results in additional revenue, as the customer makes impulse decisions about products they see in-store.  

Update Me Like They Do My Pizza

Any modern pizza place can provide task-based updates as your order is processed. Customers want the same from any company they give business to online.  

Consistency, certainty and confidence have displaced speed as the most important considerations when customers award their business. They want to see the order was accepted, processed, handed off to the carrier, and out for delivery.

Tomorrow’s Expectations, Today

While supply chain visibility is poised to move from "would be nice" to "price to play" in 2024, that’s on the business side. Customers are driving the pressure for merchants to adopt transparency, both in process and information. Complexity in fulfillment options is increasing at the same pace that customer loyalty has been falling off. 

Bob McFarland is president and COO at Deposco. Deposco’s omnichannel fulfilment supply chain applications help companies rapidly scale their warehouse management and order management operations.