With the rise of e-commerce, more and more retailers need to implement an effective omni-channel strategy. The challenge: stand out from Pure Players competition by leveraging their network of stores to offer a wider range of services while remaining profitable. For Yves Dallery, Partner of DIAGMA, the Supply Chain Department has a key role to play in developing and implementing these winning strategies around six key points.
Omnichannel transformation projects highlight the need for a coordinated strategy between supply (in the sense of products / services from the act of purchase to the return flow) and the supply chain response. Hence the essential role of Supply Chains directions in the implementation of an omnichannel strategy. DIAGMA is increasingly asked to support this digital transformation on the supply chain dimension.
6 Key Issues in Omnichannel Transformation Projects
6 key issues are found in the omnichannel strategy missions that we conduct in our consulting firm specializing in SCM:
1. Co-construction of the strategy:
The omnichannel context is the typical case where the product / service and supply chain strategies can only be built in a coordinated way. Promoting delivery on D + 1, for example, involves rethinking the logistics network and adapting order pick-offs in warehouses and transport schemes.
2. Comprehensive and integrated design:
The Supply Chain response must simultaneously cover all dimensions impacting the final performance: logistics network, logistics sites, role of stores, transport, flow / inventory management, information system, governance … Flow management must therefore integrate all available information on the state of inventories in the network, current supplies and current and forecast customer needs in order to best allocate the available products. provide the most appropriate rules.
3. Consistent global solution:
Although the needs are heterogeneous in terms of offers / services, it is necessary to ensure that the overall solution remains consistent and is not the sum of atomized Supply Chain responses. Here again, the Integrated Supply Chain vision must help build a comprehensive supply and a consistent response to deliver the best service to customers while controlling costs.
4. Agility of the target solutions:
The offers / services expected by customers in the future and the projections of associated activities are very difficult to predict. It is therefore better to focus on the agility of the target solutions. Indeed, if a competitor begins to want to deliver a wide range of electric bikes under 1h, for example, we must quickly be able to do as well, or better if we did not anticipate, so as not to lose market share.
5. Collaborative approach:
The complexity induced by a wider and more demanding omnichannel products / services offer can only be apprehended by the implementation of a collaborative construction approach involving all the actors and the relevant teams of the client. . To converge and to adhere is a necessity to carry such a project of transformation. It is also necessary that the KPIs on which the various actors are judged are virtuous. For example, assigning the revenue generated on the net to the store where the user is a customer is a good way to make him aware that the web is not a competing but complementary channel.
6. Appropriate technologies and IS:
Particular attention must also be paid to technologies and information systems to be introduced: the visibility of stocks throughout the network in real time (by means of a OMS, Order Management System) , inventory accuracy via RFID (Radio Frequency Identification), delivery tracking which assumes integration between the front-office, the TMS (Transportation Management System) and the I.S. of carriers …
The example of DECATHLON
DECATHLON, who had already called on DIAGMA about ten years ago and was satisfied with its collaboration, was once again supported in 2017 in its omnichannel transformation master plan. Its goal ? Coconce collaboratively sees a shared vision of the omnichannel product / service offer to offer to athletes in 3-5 years, as well as Supply Chain solutions adapted to meet these new customer promises.
The iterative approach consisted in putting the various strategic players (retail, brands, Supply Chain & Logistics, finance, real estate and IT) around the table to define the common vision of the new omnichannel offer through four main strategic axes: typology of products / uses, delivery time and cut-off, geographical area by period and meeting point with athletes. Other axes dealing with ordering, delivery, returns, even customization to complete the target vision. For example: to be able to display product availability on the entire network, to deliver on Sundays, to pick up an old device, to manage returns in an omni-channel way … Simultaneously the supply chains were developed to effectively support this omnichannel offer, taking into account the aspects of logistics network, product location strategy, the role of stores, information systems, replenishment flows, inventory allocation and allocation rules, return flow management.
The project culminated in a strategic plan to turn the original DECATHLON model into a true omnichannel retailer that successfully competes with Pure Players. This transformation plan has been implemented since 2018 with the continued support of DIAGMA.
To learn more about DECATHLON’s Project : Thibault VANDENBERGHE DECATHLON Video