ProMat 2013: How to Avoid Multichannel Out-of-Stocks

Jan. 22, 2013
How can you manage demand for your products when you don't know exactly what that demand is going to be?

When it comes to buzzwords, there are two types of people: Those who like to be so far ahead of the curve that they know all about the “Next Big Thing” even before the latest technology debuts in the marketplace; and those who, upon hearing what the “latest and greatest” is this week, decide it’s a gimmick and refuse to take it seriously.

I don’t know whether multichannel distribution is all the rage it’s been made out to be, but I certainly don’t think it’s just a passing fad either. One thing is for sure, though: Multichannel (or as it’s sometimes known, omnichannel) distribution is the hottest thing going at ProMat 2013, at least based on the evidence of Day One.

I heard the same concept from hardware companies (Dematic), software companies (Manhattan Associates) and wireless companies (Motorola), who were all introducing products in response to the same basic trend: Distribution centers need to be flexible enough to accommodate numerous channels, such as retailers, distributors, catalog sales and online. These channels can be physical, digital and sometimes both. And one of the biggest challenges comes in transitioning your operation from batch to on-demand because, as Mike Khodl, VP of Dematic’s solution development group, explains, “You no longer know exactly what your demand is going to be.”

This trend has been hastened along by a convergence of heightened customer expectations (consumers have been trained to expect immediate acknowledgment of their orders along with a delivery date) and wider availability of affordable automation technology that can offer the kind of visibility customers are demanding and suppliers are requiring. One of the keys to making this whole idea work, though, is ensuring the manpower is in place to fulfill all of these multichannel orders. No matter how sophisticated a big-box retailer’s technology might be, that still doesn’t guarantee that the shelves will be stocked with the product you’re looking for when you arrive at the store.

To that end, Manhattan Associates is teaming up with Kronos, a provider of workforce management solutions, to help retailers execute on their multichannel strategies. As Eric Lamphier, senior director at Manhattan, points out, retailers need to get better at freeing up the inventory in their stores. By leveraging Kronos’s technology, retailers can get better at determining if there are enough workers in the stores and distribution centers to physically replenish the shelves? And no matter whether the shelves are in a brick-or-mortar building or in a DC serviced by a 3PL on behalf of an online storefront, out-of-stocks are still a retailer’s worst nightmare.

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