How to Compete with Walmart’s Incredible Shrinking Operations Times
Walmart recently announced it wants to cut the time required to process in-store returns of online purchases down to 35 seconds. Amazon has set up deals for Kohl’s and Whole Foods to accept online purchase returns, as well as piloting its own delivery service to lower costs even further.
With more competition coming from all channels, an agile business model is no longer optional for many retailers. UK fast-fashion retailer Asos, for example, now offers one-day delivery to differentiate itself from competitors Zara and H&M.
But without process optimization, retail operations risk becoming less efficient, more costly and ultimately less profitable. Operational excellence offers retailers a way to ensure they deliver on their brand promises, on time and cost effectively. And today’s retail management software comes with options every retailer can use.
What is Operational Excellence?
Operational excellence can be difficult to define because it can be applied to many different service and industry sectors. But essentially, it is about defining an optimal workflow, designed to maximize throughput and profitability.
The goal of operational excellence is to establish a detailed, replicable process for the entire, end-to-end workflow, and if something goes wrong, have an established process for fixing it. Put another way, every employee should have a good idea of what the company wants to achieve and understand what their role is, what to do and when to do it.
Since the 1960s, Operational Excellence has been used to optimize the flow of information and goods across the supply chain. As digital technology became more sophisticated, so has the software used to manage information and perform not only more complex operations, but with increasing speed and efficiency.
How does operational excellence apply to omnichannel?
Omnichannel retailers are expected to provide an end-to-end shopping experience for customers, whether they’re in the store, on the website or on a mobile device. Thriving in an omnichannel-retail environment requires retailers to effectively manage dynamic, multidirectional workflows and fulfillment capabilities.
Retailers have been redefining operational excellence in order to deliver on their brand promises driven by omnichannel capabilities. Some of these capabilities include the ability to:
- Capture, analyze, and apply data to understand and respond to customer needs
- Manage inventory levels and minimize losses
- Optimize warehouse operations, management, and transport
With operational excellence in their omnichannel operations, retailers can reduce errors, costs, and delays at every stage of the shopping journey. Agile supply chains can quickly match inventory supply with changing demand and control inventory to create a balance between undersupply and markdowns.
The Importance of Software
Today’s retail software offers indispensible tools for integrating the data, operations, and technology needed to operate successfully in an omnichannel environment.
Some tools include adaptive forecasting, smart inventory planning, dynamic sourcing and replenishment, and stock, space, staff, and transport optimization.
Retailers willing to stake their reputation on the operational excellence of their omnichannel capabilities will succeed in further closing the gap between online and offline retailing.
If you are interested in finding out more on how software can help retailers achieve operational excellence in omnichannel operations, you may download Openbravo’s recent presentation, Achieving Operational Excellence in Omnichannel Retail