Ian Hobkirk ( ianhobkirk@commonwealth-sca.com) is founder and managing director of Commonwealth Supply Chain Advisors.
to perform distributed order management. It has actually
developed one of the most advanced sets of rules that I have
seen for omnichannel retailing.
Most omnichannel retailers favor using either DC- or
store-based inventory and using distributed order management software to manage the exceptions to those rules.
For example, Cabela’s first seeks to use distribution center
inventory and only goes to the stores as a last resort if the
DC is out of a product. Stage Stores currently chooses to
use store inventory whenever possible and only fulfills an
e-commerce order from the DC if there is no other choice.
But, as Gough Grubbs noted earlier, this strategy is shifting
more toward the DC. Unlike these retailers, Sears uses a
more nuanced approach and calculates the lowest-cost fulfillment path on an order-by-order basis to determine how
to best source that particular order. There is no preference
for either the DC or the stores—simply a preference for the
most efficient fulfillment method.
For the time being, Manhattan Associates seems to be
the dominant player in DOM technology—the only major
player that is actively promoting a (relatively) mature DOM
platform. However, Manhattan can expect to have some
company soon. JDA (formerly RedPrairie) reports that it
will roll out an integrated DOM system with interfaces to
WMS in the fall. [Editor’s note: In November, JDA and IBM
announced a joint initiative that combines components of
supply chain planning and execution with an end-to-end
order management and fulfillment platform.] It wouldn’t
be surprising to see some mid-tier software providers roll
out DOM platforms soon as well, providing a less costly
alternative aimed at mid-market customers.
IN-STORE WMS
Once a decision has been made to fill an order from a retail
store, it becomes critical for retail workers to be able to efficiently and accurately pick, pack, and ship it. Many retailers
are deploying modified versions of warehouse management
software in their stores to make this possible.
Sears is an excellent example. The company has been
quietly building out an omnichannel network leveraging
store inventory and can now serve 81 percent of the U.S.
population via one-day ground delivery service. As part of
this strategy, Sears recently began a pilot program using
HighJump’s WMS as the execution engine for picking these
orders. The company realized that the average retail store
worker represents a different demographic than the average
warehouse worker: probably younger, less experienced with
the concept of picking orders, and more familiar with a different generation of technology. Sears recognized these differences and chose to deploy the in-store HighJump WMS
on iPads, using ring-style bar-code scanners. “The technology, which uses touchscreen user interfaces, is familiar to
the average store worker, which reduces training time and
improves pick speed,” Jeff Starecheski, vice president of
logistics services at Sears Holdings, told me.
The store planogram is loaded into the WMS, and workers are directed to pick orders by department, using a “
cluster pick” methodology more often seen in a warehouse than
in a retail store. During the 2013 holiday season, Sears was
able to process hundreds of orders per day from the store
network and filled greater than 99 percent of those using
two-day ground service.
Other software vendors have reported successfully adapting their WMS for retail store use. Manhattan Associates
released an in-store inventory and fulfillment system module two years ago, drawing heavily on its WMS heritage.
The company now reports more than 4,000 store locations
currently using the software, which features touchscreen
interfaces tailored to younger workers.
Retailers that are developing an omnichannel fulfillment
strategy have no shortage of technology solutions to provide decision-support and execution capabilities. The coming year will likely see additional software vendors enter
the market with offerings, adapting their WMS systems to
support store fulfillment as well as developing distributed
order management capabilities, thus allowing retailers to
take flexibility and service to a new level for consumers.
