In general, to adapt operations towards omni-channel logistics, the strategy must be customer-centric and linked to other departments such as sales and marketing. But the question is whether omni-channel logistics differs much from other more conventional strategies.

In order to know the ways to manage omnichannel logistics, the following points have to be taken into account:

System digitization

Once an omnichannel strategy is established for the company, it is essential to have a centralized logistics management system to keep all data on inventory, orders and shipments up to date and to receive them in real time. This is known as logistics 4.0.

To do this, it is necessary to look carefully or rely on experts in the field to choose the best solution that connects and keeps all the data updated with the database systems that the company already has. Whether it is an ERP with logistics modules or a more specific solution such as an inventory manager or a WMS, or even, to optimize transport management, a TMS.

Omnichannel order picking

The growing trend of e-commerce and, therefore, omni-channel logistics has marked a turning point in the way orders are prepared. It mainly consists of adapting picking and packing strategies to focus mainly on the preparation of orders to customers without relying on the distribution channel.

For example, boxes have become the packaging of choice for direct shipments and for multi-unit orders, i.e. orders of multiple different items and small quantities. Another important element to consider is the distribution centers or logistics nodes through which orders must be prepared that are closest to the customers, even when reverse logistics must be managed.

Flexibility in shipments

If you decide to apply an omnichannel strategy in both the sale and distribution of orders, you must offer the customer the option of different shipping options. Among these options, the most frequent are the following:

• Home delivery: This is undoubtedly the most popular option of all, both on the part of the customer and on the part of the transport services, but the most expensive in terms of fuel and delivery attempts. Your service can range from standard delivery to express delivery.
• Pick up at physical store: Known as Click & Collect, this is a more economical option in which the physical store of the customer's choice receives the product and it is the customer himself who goes to pick it up. It reduces last mile costs and has the potential to offer a more satisfying shopping experience.
• Convenience points or smart lockers: Similar to physical store pickup, with the difference that third parties outside the store pick up the product and hold it for a period of time until it is picked up. They consist of other stores outside the e-commerce or smart lockers.

The combination of different shipping options aims to offer an omnichannel shopping experience to customers. Apart from that, it has its advantages to leverage both online and offline distribution channels.

Suitable transportation and logistics options

If previously one or two transport companies were used to make deliveries, when implementing an omnichannel strategy, more options of logistics operators are needed to cover the sales channels.

To do this you have to take into account the different ways that direct delivery can be given. It may be that the shipment is made from the distribution center, a store near the customer or opt for a method such as dropshipping and is sent directly from an external supplier.

Monitoring and follow-up

Geolocating shipments and monitoring their current status is essential to ensure that deliveries arrive on time. Particularly when there is an omni-channel strategy and orders are shipped through multiple channels.

This is because omnichannel is customer-centric and the demand demands transparency and knowledge of the status of their shipment 24 hours a day. In addition, tracking provides more agility when it comes to resolving any possible incidents that may arise in the shipment.

Conclusion

As we have seen, effective omni-channel logistics management requires a combination of technology, processes and innovative strategies, just like any other 4.0 logistics strategy. However, it must be kept in mind that all logistics is focused on the customer and meeting their needs.

At Hedyla we adapt the software to any specific use case, providing the necessary tools to both staff and carriers to report and have full control of the transport management.

Meritxell Vázquez

SEO & Inbound Marketing
Video Game Design and Production graduate currently training in Digital Marketing with a focus on SEO and Inbound Marketing.

Creating articles of value and supporting communication to the technology sector.

hedyla.com

So, once it happens... What can you do about it? If you want to know the ways in which you can maintain an optimal availability rate and cope with a stock out, take a look!

Assess breakpoints

Once a stockout has occurred, it is advisable to analyze the points that have led to the depletion of safety stock. The main causes are poor sales forecasts and lack of internal and external communication, but external factors such as delayed shipments from suppliers or difficult-to-prevent changes in market trends also play a part.

To do this, you need to communicate with the rest of the staff to understand what happened. In this way, you will get a clearer picture about the causes of the stockout and can start taking action as soon as possible to avoid being out of stock for a longer period of time. 

Establishing a good replenishment policy

If it has been shown that the current replenishment policy is not sufficient to ensure optimal availability rates, it is best to employ the necessary improvements to start stocking the inventory as soon as possible. The measures to be reviewed to avoid stock-outs are as follows:

Inventory forecast

Undoubtedly, not making a good demand forecast is one of the most common causes that leads to stock-outs, especially if there are sudden peaks in demand, even if they are not seasonal. For this, you should study the inventory distribution data to detect its growth and adjust the stock to it with reliable suppliers.

Define rotation type

Along with demand forecasting, it is necessary to analyze how much time the goods spend in the warehouse until they are shipped, particularly if the product needs to be shipped well in advance. It is classified as high, medium and low.

Calcular plazos de entrega

Los plazos de entrega deben de ser los más cortos posibles para poder cubrir la demanda. Para conseguirlo, se debe mantener una comunicación eficaz con los proveedores, informando cualquier incidente presente y asegurando de que los pedidos lleguen a su destino.

Automate tasks

Today, a wide variety of tasks in logistics departments can be automated thanks to logistics software. To avoid stock-outs, there are 2 major groups of logistics software to consider for implementation: Warehouse and Transportation.

On the one hand, a warehouse management system or WMS can encompass several solutions that streamline and mitigate human errors such as stock management, picking route optimizer, among others. On the other hand, there is the TMS or transportation management system in which its modules can plan loads, carriers and routes in the most efficient way possible to reduce delivery times and costs.

Offering the customer alternatives

One of the most impactful consequences of stock-outs is the loss of customers, whether they are consumers or other companies that will look for another supplier. In this case, if you have an alternative item that meets the same needs, you can offer it to your customers as a possible solution.

However, the characteristics of the alleged replacement, such as its quality and its effect on profitability, must be taken into account. If high priced alternatives are offered, it may deter customers from purchasing it but still make a good profit margin. On the other hand, if a cheaper product is offered, profitability may be reduced and the customer may end up more dissatisfied with an item of lower quality than desired.

En todo caso, es cuestión de analizar bien si es posible ofrecer reemplazos dependiendo del sector en el que se opera, los productos en sí y el tipo de clientes al que va destinada la mercancía. Si bien puede afrontar una rotura de stock de manera casi inmediata, el problema persistirá si no se detectan los errores que causan el agotamiento de existencias.

Conclusion

When a stockout occurs, there are few ways to provide an almost immediate solution, such as offering alternative items to the customer. Otherwise, if you act quickly, you can discover the reasons for the stock-out and start implementing good procurement practices to deal with a stock-out in the future.

At Hedyla, our logistics solutions are customizable, since you can add the modules you want to obtain a tool that will have all the logistics processes under control.

Meritxell Vázquez

SEO & Inbound Marketing
Video Game Design and Production graduate currently training in Digital Marketing with a focus on SEO and Inbound Marketing.

Creating articles of value and supporting communication to the technology sector.

hedyla.com

Lately, there has been a growing trend towards healthy consumption, i.e. fresh and frozen products whose demand requires better planning and management of their distribution. But what is the reason for this rigorous planning and what are the requirements for successful distribution in refrigerated transport?

To do this, we need to take a look at the challenges and risks to the products transported by the cold chain and why so many measures are necessary.

Rigorous temperature maintenance

All goods that are affected by changes in temperature and may even pose a risk for consumption have very strict regulations for storage, handling and transportation. In general, perishable foods, frozen foods and heat-vulnerable medicines are those that are part of the cold chain, i.e. goods that have biological and/or chemical components.

It is known that the ambient temperature (from 15º to 40º) is a breeding ground for bacteria and microorganisms. But, below 15º their growth slows down to 4º - 0º and, between -4º and -7º, their growth stops completely. In addition, the range of 30º and 6º promotes the ethylene hormone, responsible for the ripening of fruits and vegetables. But it is not until -18º that food is prevented from turning brown, which is why it is the standard temperature of the international cold chain.

Without forgetting that, within the challenges of the cold chain in the pharmaceutical sector, certain drugs lose their effectiveness when exposed to room temperature such as vaccines. In the case of others, like food, they can generate bacteria and other microorganisms that would cause the opposite effect of the medicine.

Critical cold chain breakage points

Apart from the fact that these goods must be kept at the right temperature, there are circumstances in which the cold can be altered, known as critical points. It is important to recognize them along the cold chain and study the necessary measures to minimize their impact, as this is one of the most important challenges of the cold chain.

The four critical phases in which cold storage can be affected are loading and unloading, storage, transport and sale. In loading and unloading, it is very important to handle goods quickly to minimize exposure to ambient temperature.

While in storage, transportation and distribution in stores and premises, good machinery, facilities, vehicles and good preventive maintenance must be available to anticipate failures and avoid product deterioration. So training and even technicians and other specialized personnel are required to gain knowledge about the peculiarities of this supply chain.

High maintenance and transportation costs

As we have seen, the fact that temperature-controlled products require a great deal of effort and investment of specialized equipment gives the idea that their budget in supply chain operations is very high. It is even much more than for other essential and perishable products such as hygiene products and dry foods.

Distribution of refrigerated goods is twice as costly as dry food and up to four times more expensive than transporting frozen goods. For this reason, the cold chain seeks to find the most efficient routes for products to arrive in the shortest possible time while maintaining their quality, making route optimizers are indispensable solutions for the cold chain.

Improved product traceability and documentation

One of the points of the cold chain that is not so well known are the hidden costs that such a use case has in logistics. Among them are those caused by delays, due to delays at the time of loading, missing or incomplete documentation. Even the timeliness of orders can be affected by out-of-control actions, such as delays in inspections by the authorities in charge.

Therefore, a type of merchandise where setbacks are more inconvenient, such as temperature maintenance costs, it is essential to implement improvements in traceability in order to document its entire journey: origin, transfer process and destination. This streamlines all picking activities for specific batches.

Conclusion

Maintaining low temperatures on goods involves more expense and effort than other types of goods without this requirement, as a small error can easily lead to product spoilage or higher than expected costs. For this reason, this type of supply chain is one of the most in need of advance planning to minimize delays and employ rigorous maintenance of facilities and equipment, whether refrigerators for an active cold chain or isothermal containers for the passive cold chain.

At Hedyla we adapt our software to any type of supply chain, taking into account all the constraints it usually has along with the option to apply your own for the user.

Meritxell Vázquez

SEO & Inbound Marketing
Video Game Design and Production graduate currently training in Digital Marketing with a focus on SEO and Inbound Marketing.

Creating articles of value and supporting communication to the technology sector.

hedyla.com

One of the rising trends in the retail sector is Click & Collect, an option that has gained prominence in recent years and offers several advantages for both the store and the consumer, including reducing carbon emissions.

If you want to know the advantages of Click and Collect in logistics operations, take a look!

Accorciare l'ultimo miglio

The last mile often has a number of challenges that have arisen in recent times, which are difficult to circumvent and employ good capillarity in delivery. For example, restrictions on the entry of large vehicles into urban centers and difficult access to certain addresses with very narrow streets along with the common challenge of facing the usual traffic congestion of large cities.

With Click & Collect , the final destination is shortened, being its ultimate transport objective that it arrives at the establishment meeting the established objectives. However, it still depends on the location of the premises, which will be easier if it is located in a shopping center on the outskirts with a good platform for unloading goods or just as difficult if it is in a pedestrian area in the heart of the city. Nevertheless, it is still a very economical option for both the logistics operator and the company.

Avoid missed deliveries

One of the biggest inconveniences faced by deliveries to the end customer is that they are not completed successfully. Among its main causes are the absence of the end customer at the home or office, generating more inconvenience for redelivery, which results in more reverse logistics costs. In addition, not all logistics operators can guarantee that the order will arrive in a very specific time slot requested by the customer.

The Click & Collect gives the guarantee of successful delivery of the package and the freedom to pick it up at the store or post office when the customer is available. This is as long as it does not exceed the order booking period (usually about 15 days) and within the business hours of that establishment. Although time restrictions can be eliminated with the option to store them in automatic lockers accessible 24 hours a day.

Improves stock control

It is known that it is crucial to maintain a rigorous inventory control in any company dedicated to offer physical products. This can be a very cumbersome task when the company itself has several warehouses or third parties offer storage systems for them, being very limited its management, especially in the second case.

If you have your own warehouse in the physical store, it is easier to prepare the order because it may already be present at the pick-up point. Or, if you don't, you can order the products themselves and replenish them, updating inventory levels. However, if there is replenishment of inventory from other physical stores, the challenge of maintaining good stock management will be even greater.

Assistance in product placement strategy

As mentioned above, there are certain stores that offer the ability to ship a product from a store out of reach of the customer to a store closer to the customer. While this may be a one-off situation, if it is repeated frequently, it may be an opportunity on the popularity of an item in a particular location.

This, without a doubt, can be very useful for professionals in charge of conducting market research to find the ideal customers for their products. By observing and analyzing their buying habits, they can establish new logistics strategies in which more inventory is collected for the most sought-after establishments, maintaining a good stock rotation and generating profits.

Conclusion

The Click & Collect not only offers advantages and opportunities in terms of business and customer satisfaction, but also facilitates various logistics operations that result in reduced costs and use of resources. And this is one of the main objectives when managing certain logistics processes such as transportation management with a TMS.

Hedyla has worked with customers from various verticals and we offer solutions tailored to a specific sector that requires a set of parameters and modules designed for them.

Meritxell Vázquez

SEO & Inbound Marketing
Video Game Design and Production graduate currently training in Digital Marketing with a focus on SEO and Inbound Marketing.

Creating articles of value and supporting communication to the technology sector.

hedyla.com

To this end, there are two ways to fill inventory in a distribution channel: Push and Pull. Knowing their definitions and their advantages and disadvantages is crucial to choose the right strategy according to the industry you work in and your needs.

If you want to know the differences between Push and Pull distribution, their benefits and drawbacks and for which cases one strategy or the other is intended, read on.

Push Distribution

In a Push distribution system, it is the manufacturer or supplier that decides how many units of product are manufactured and distributed. First, they aggregate all the lower level storage points to historical demand and then perform demand forecasting to determine quantities. Next, replenishment inventory is shipped through the warehouses from the originating supply facilities.

This method makes the first nodes of the supply chain responsible for replenishing the stock, manufacturing the efficient amount of goods to be able to ship them to their distributors and avoid excess inventory.

Push Advantages

One of the advantages of this method is that high inventory levels can be maintained by predicting demand to generate a safe stock level. This is a producer-centric strategy. Therefore, for products that have peaks in demand at specific times of the year or are in high demand throughout the year, such as the food sector, such an approach is effective.

Push Disadvantages

However, one of the most notable drawbacks of Push distribution is that, as this decision is made by the lowest nodes in the supply chain, it is far removed from the actual demand being demanded by current customers. For this reason, it suffers from a notable lack of transparency and visibility into the needs of those customers.

That is why it is difficult to adjust to peaks in demand that are difficult to predict and provide good service, usually causing stock-outs. In addition, it requires good management to maintain a good product flow.

Pull Distribution

In contrast to Push distribution, Pull distribution consists of the lowest node of the supply network, the end customers and retailers, deciding how much stock to order to meet their needs. The factories or manufacturers then receive this order and start producing around a direct demand. 

After the other processes, inventory managers can choose between two techniques: reorder point (ROP) or distribution requirements planning (DRP). The decision to choose a Pull technique depends on how stock moves through the channel and the level of control needed.

This mode of distribution plays between the risk of stock shortages and excess safety stock due to demand variability, so it is essential to maintain a balance between inventory levels.

Advantages Pull

Among the benefits of the Pull distribution strategy, one is that it has limited inventory, as it is produced when a customer places an order, so it is a reactive mode of operation and stands out as a customer-centric methodology. For example, this occurs in cases of customized and higher value products, such as cars with the Just in Time method.

Pull disadvantages

However, this Pull distribution mode has several drawbacks that work against it. For example, if a node in the supply chain makes inventory management errors, this can lead to overstocking and increased operating costs, losing money. It is also possible to cause customer dissatisfaction if there are damages or delays in their order.

Another disadvantage is that picking times will have a big impact on throughput because most of the requests will be very rushed orders with a high level of stress. Therefore, a picking optimizer helps to improve warehouse routes and increase the productivity of the warehouse, as picking is one of the most intensive and costly activities, representing up to 55% of the total expense of the warehouse operation.

Conclusion

There are obvious differences between Push and Pull distribution from which to choose one strategy or the other depending on the sector in which you operate and the type of products you offer. Since each of them has its benefits and drawbacks, the question is to study them well in order to choose the most appropriate and efficient one to have and maintain an optimal inventory management.

At Hedyla, we adapt the solutions according to the strategies and needs of a warehouse, for that reason our WMS (Warehouse Management System) is flexible according to each case. 

Meritxell Vázquez

SEO & Inbound Marketing
Video Game Design and Production graduate currently training in Digital Marketing with a focus on SEO and Inbound Marketing.

Creating articles of value and supporting communication to the technology sector.

hedyla.com