Monday, August 3, 2015

INVENTORY -- HIDDEN ISSUE OF E-COMMERCE IMMEDIACY & MULTICHANNEL / OMNICHANNEL

E-commerce Immediacy is sweeping across the globe. It has become a selling and supply chain paradigm.  Delivering customer orders within 48 hours of placement is a megatrend.
E-commerce is the beginning.  But it does not stop there.  Immediacy will move across channels, markets, and industries.
Additional inventory -- aka, additional working capital or reduced liquidity-- is an underlying factor.  Many companies incorrectly focus on it.  They deal with--
  • Urge to increase inventory because of additional channels
  • Allocating inventory by channel which is really an arbitrary action and does not deal with the dynamics and speed of online sales
  • “Optimizing” inventory which means not recognizing that inventory "optimization" struggles in the reality of multichannel sales.
These do not really work.
The better approach--as part of the New Supply Chain/the Blue Ocean Supply Chain is to:
  1. Accelerate inventory velocity to inventoryvelocity2
  2. Compress time
  3. Integrate the upstream supply chain for key suppliers as determined by supply chain segmentation
  4. Elevate the integration of process and the integration of technology to advanced levels
  5. Define the facility network that meets customer expectations and delivers the customer experience