Whether it is a global apparel brand or a small, single-inventory high fashion brand, the consensus is that the supply chain is ever-changing. Today’s consumers have added to the increased fluctuating nature of the supply chain. Consumers are no longer dedicated to a particular brand; their interests and needs can change at the drop of a dime. Consumers want to shop the same products across channels—brand retail, departmental retail, ecommerce, internet, mobile, and subscription. Such changes have affected suppliers. Now they need to account for inventory that may be critical and in high demand in one channel, but too expensive and slow moving for stocking in another channel.
It is also the same reason that more and more brands are choosing virtual warehousing and omnichannel planning to meet the challenge of a constantly evolving product demand.
The internet has enabled a society of instant gratification and rapid delivery. Customers want to receive their orders as soon as possible. They will choose the business that can ship to them first, and they have proven that they are willing to pay for it. Just look at the success of virtual supply giants eBay and Amazon. The suppliers that are winning are those that have optimized their supply chains and systems to meet such consumer demand.
In fact, more brands are choosing virtual warehousing coupled with a strong omnichannel supply chain system, no longer as an option but, as an imperative if they plan to compete in the current marketplace.
Virtual Warehousing
So, what is virtual warehousing? Virtual warehousing allows for inventory to be physically housed anywhere—including a distribution center, a temporary facility or the back room of a store—and distributed on an as-needed basis for orders emanating from any of the channels.
With virtual warehousing, all of a given brand’s supply chains work as a network, and this network is then considered for fulfillment. Therefore, when an order arrives, the network is consulted, irrespective of where the product is stored, to identify the best possible way to fulfill the order as quickly as possible.
Omnichannel Planning for Virtual Warehouse Management
Of course, with any divergent system, there are challenges. With virtual warehousing, big-brands face choosing the right system configuration to manage stock virtually. This allows the brand to address the sudden cost of sporadic inventory transfers between channels and/or the possibility of losing money and customers when the product is not readily available at specific channels.
However, with the right omnichannel planning and enterprise resource planning (ERP) integration, big retailers can segregate inventory; provide transparent financial ownership and tracking; secure inventory availability per channel; and even share warehouse shelf space.
ERP for Efficiency and Tracking
Omnichannel planning coupled with ERP, allows apparel businesses to manage and automate back office functions through integrated applications such as sales order capture, electronic data interchange (EDI), API-based retailer, ecommerce, and production integration, purchasing, logistics, and warehousing, fulfillment, among others. Choosing the right apparel ERP solution for a brand can be one of the most important decisions a business will make.
Omnichannel planning and ERP solutions provide powerful category and style level planning capabilities and historical data analysis tools to manage individual plans independently, or a company can merge it into a single, multichannel plan. These customizable options both provide accurate forecasting, which effectively improves revenue, reduces stock-outs and markdowns, and significantly improves demand optimization.
Competing in the Virtual Warehousing Landscape
If you are considering how best to compete in today’s fast-moving technology landscape, review virtual warehousing options. Success depends on having in place the right technologies, such as omnichannel planning, and the right ERP integrations for inventory visibility. Look for solutions that are customizable to your needs to ensure your brand can fully participate and compete in the virtual inventory process.
Ajay Chidrawar
VP Global Product Management & Customer Success
CGS
200 Vesey Street, Brookfield Place
New York, NY 10281
212-408-3800
info@cgsinc.com
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