MHI Solutions

Global Trends

Omni-channel—Not Just for Retail Anymore

How the amazon effect is transforming B2B supply chains.

By Mary Lou Jay

Amazon’s emergence as a retail powerhouse has transformed the entire consumer shopping industry and its supply chain. Omni-channel has become the rule; no matter how consumers shop for their goods—online, in store, by phone, at home or on the move—they expect visibility and a consistent experience throughout the entire shopping, ordering and delivery process.

Now retail customers are bringing their expectations for that omni-channel, Amazon-quality experience to their workplace. The millennial generation in particular has grown up in a world where they can find information about products whenever they want, can order those products wherever they happen to be and get those products delivered to them or pick them up within 24 hours or less. They don’t understand why they should accept any less when it comes to business-to-business transactions.

B2B distribution networks are likely to see the biggest impact from the move to omni-channel. A white paper from the faculty at the University of Tennessee, Knoxville, Haslam College of Business Supply Chain Management, identified the replacement of multiple distribution network strategies by an omni-channel approach as one of the megatrends of the next decade.

In “Transportation 2025 Megatrend and Current Best Practices,” the authors noted that the rise of e-commerce is leading companies to develop a unified omni-channel strategy that will create and deliver value in a digital marketplace. In this scenario, “a new emphasis is excellence in execution; the ability to deliver to the customer what they want, at a competitive price.”

This requires a rethinking of supply chain operations. Many retailers made the mistake of building silos around compensation structures and where goods were purchased. “Now they are having to merge those channels to have one view to the customer, to have consistency,” said Kevin Reader, director, business development and marketing at MHI member KNAPP Logistics Automation Inc.

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According to the recently released 2018 MHI Annual Industry Report, “Overcoming Barriers to NextGen Supply Chain Adoption,” eight out of ten survey respondents believe these supply chains will be the predominant model within just five years. However, the report found that the adoption of some of these technologies was slower than originally reported when MHI started the annual report in 2014. The report cites three top barriers to adoption of these technologies: 1. Making the business case for NextGen supply chain investments. 2. Tackling the supply chain skills gap and workforce shortage. 3. Building trust and security in digital, always-on supply chains. This issue of MHI Solutions focuses on the adoption of these digital solutions, from best practices in robotics and artificial intelligence to blockchain and innovations in last mile delivery.

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