28 DC VELOCITY NOVEMBER 2014 www.dcvelocity.com
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in a multiunit retailing network.
Whether this capability is accomplished via purchased or internally
developed software, it is a necessity.
Historically, multiunit retailers
have had separate inventory man-
agement systems and practices,
which for accuracy’s sake are specific
to the channel requirements. For
instance, in the Internet channel,
SKU-level real-time accuracy is an
absolute requirement for fulfilling
a customer order, and systems and
processes have evolved that routine-
ly assure accuracy in excess of 99
percent. Not so in the retail store
environment, where accuracy at the SKU
level is far, far lower.
So, the dilemma comes when a retailer
believes there is inventory available at a
location and it is not—or, just as bad,
thinks there is no inventory and there is.
This is one reason for the renewed interest
in radio-frequency identification (RFID)
technology for retail locations. Retailers
cannot rely on semiannual or annual physical inventories as the assurance of inventory availability in an omnichannel world.
Q Can retail store workers be expected to fill orders with the same degree of
accuracy as distribution center workers?
A I may be a bit of a contrarian here. Those of us in supply chain operations frequently underestimate store
workers’ abilities. Given the proper positioning of the initiative or customer focus,
well-thought-out processes such as scan
and pack validation, incentives, and training, store workers can fulfill orders as
accurately as DC staff—but not necessarily as cost-effectively.
Q What advice would you give a supply chain executive who has been assigned
to set up an omnichannel strategy?
A My advice would be, first and fore- most, to make sure your entire executive leadership is aligned on the importance and necessity of the initiative. Make
sure the initiative has the proper governance. Rigorous and candid project management is a must. Since an omnichannel
program by its very nature touches almost
every functional area of the enterprise,
a senior executive steering committee
is a necessity. The project team must
be built from the “best and brightest”
from your supply chain operation, information technology group, store operations, change management organization,
Internet operations, finance, and supply
chain partners.
Any initiative of this size and scope is
best implemented incrementally, via a
series of pilot projects before full rollout.
It’s always best to validate the business
impacts of these sorts of strategic initiatives, and to confirm and refine plans
based on the real-world impact of how all
the moving parts align.
