LTD Management
Logistics & Supply Chain Management Consulting Global Solutions That Work

E-COMMERCE AND IN-STORE FULFILLMENT —A Supply Chain Management Perspective—

In-store fulfillment for e-commerce has gotten stories done about it Details as to what is done and how are sketchy. They are written about retailers and from the retailer point of view. They are not written about from the supply chain management perspective. What is missing too is the cost-to-serve and order-delivery performance metric.

Some discussion points and to create comments for supply chain management side:

It would be good to understand the analyses used by retailers as to cost and order performance for stores versus warehouses. How does it compare to the maximum two-day order delivery? What about an updated warehouse network built around omnichannel, not stores, with strong inventory positioning?

Also, the real issue is the total supply chain, not just one part, fulfillment. How does forcing this at the end of the supply chain affect the total chain. What changes were required upstream? Or are there hidden problems if this is to be more than a Christmas time service?

Design the new supply chain's warehouse/fulfillment recognizing the different service requirements of the channels. The solution may be a combination of approaches. One way may not answer all needs, both cost and service. That may require data analytics, such as regression analysis, to understand order size, number of SKUs per order, which products are likely to be ordered together, and other questions.

With that, construct the network for what is the best way to meet customer demands—warehouses—how many, located where, size; or warehouses of different sizes depending on order volume; or a mix of warehouses and stores. Segment based on common supply chain or other significant issues. The monolithic purpose, one-size-fits-all supply chain is counterproductive to creating velocity.