By Scott Fenwick, Manhattan Associates
In today’s complex world of mobile purchasing, e-Commerce and same-day shipping, supply chains are anything but simple. The digital revolution has changed the game for retailers by putting more power in the hands of consumers, allowing them to make purchases from virtually anywhere, and upping their expectation for quick and seamless delivery.
It has also exposed retailers to the phenomenon of “flash demand” —the idea that product demand can be sparked instantly and spread like wildfire over social media and other avenues — which quickly creates a slew of supply chain challenges.
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Flash demand can be created in many ways. Maybe it stems from a celebrity’s appearance with a product, making it a “must-have.” Perhaps it develops following the sudden success of an athlete and a resulting rush for merchandise. Or maybe it’s through an intentional Flash Sale event. No matter its origin, flash demand tasks retailers with the challenge of instantly adapting their supply chains to fulfill a sudden need — certainly no easy feat, and one that requires forward thinking on the behalf of supply chain managers to ensure that their systems are flexible enough to adapt to the unexpected.
Flexibility
The basics of supply chains have changed in recent years. Five years ago the big focus was on distribution centers — once the epicenter of all online and in-store fulfillment. Today, the focus has expanded to include transportation, inventory, stores, and order management. In the new supply chain environment, insight into all these areas is critical to meet the ever-changing demands of a digital world. Flash demand is a great example of how the marketplace can change in an instant, and a responsive, flexible supply chain is necessary to ensure that all challenges can be met.
The focus for retailers must be on getting themselves ready to deliver (no pun intended) no matter the circumstances. For the supply chain, this means being commerce ready: ready to sell and ready to execute any way, any time, anywhere. To achieve this, retailers need a fulfillment execution system that’s flexibly designed at its core, so it contracts and expands automatically — stress-free — as demand requires.
Getting Commerce Ready
A key step to achieving this state of commerce ready nirvana is having complete control over your inventory — which channel you sell through, which segments you sell to, to whom you sell and when. It also means being able to leverage your entire supply chain network when deciding how to fulfill orders. In years past, orders were strictly fulfilled in the distribution center, but in today’s omnichannel environment that’s no longer the case. Retailers now have the power to dynamically offer supply wherever demand may occur. If a store location has a surplus of items, for example, orders from other stores or online can be redirected and fulfilled via that store’s inventory. This flexibility is a huge part of being ready to execute and respond to flash demand. Leveraging all parts of the supply chain in this way will help ensure efficient order fulfillment and happy customers, no matter the circumstances.
Long-Lasting Results
Having the ability to adapt to flash demand means more than simply fulfilling one set of orders. Today’s supply chain is more customer facing than ever before and often influences loyalty and brand perception. In a flash demand scenario, when customers simply must have an item immediately, the ability to execute and meet that demand could result in more than a one-time sale for a retailer. Being able to deliver in this way also benefits a brand’s reputation in the eyes of the consumer and helps build brand loyalty and repeat business in the long run.
There’s no arguing that supply chain challenges have heightened in recent years, as retailers confront myriad new purchasing avenues and exceedingly demanding customer expectations. However, with the right combination of a flexible approach, sophisticated supply chain management technology and strategic planning, retailers can overcome the fulfillment hurdles caused by flash demand, among other supply chain challenges, and continue to prosper in today’s omnichannel world.
Scott Fenwick is Senior Director of Product Strategy at Manhattan Associates.
