While traditional brick and mortar stores have taken an indefinite hit during the Coronavirus pandemic, the market is seeing a surge in E-commerce. With the holiday season approaching, many companies are gearing up for an increase in e-commerce to build out a more robust, cost effective fulfillment strategy than ever before.
Namely, leveraging the use of distributed order management (DOM). This converts a store to be a fulfillment location for an omni-channel retailer and optimizes shipping and delivery times and costs. While this practice is not entirely uncommon in the retail sector, many retailers have struggles to implementing this functionality effectively. Some existing challenges include store bandwidth to fulfill orders assigned, conflict of interest due to store managers losing high demand inventory to online orders, no or low incentive for store fulfilment, and proper brokering of orders in a cost effective way. The Coronavirus pandemic now presents new challenges that this business application is well suited to tackle. While there are many challenges DOM presents, it is a powerful tool if configured correctly.
DOM is traditionally used to reduce shipping costs, decrease order lead time, and prioritize ship-from locations. Physical store and e-commerce platforms, specifically inventory levels, need to be integrated to ensure these capabilities work. With the Microsoft Dynamics DOM, rules are easy to configure and update as fulfillment needs evolve. As the holiday season ramps up, the shipping service level agreements become more and more important and a company’s ability to be flexible with its DOM capabilities can often spell the difference between a successful and disastrous busy season. There are many rules in place to optimize the order brokering process within DOM, but in the holiday season, on-time delivery is king.
Retailers with existing DOM capabilities should be looking at their configurations to streamline their rules and prioritize fulfillment rates. Measures such as lowering safety stock at the stores (due to less in person shoppers), prioritizing lead time over shipping costs (to an extent) and hiring seasonally at stores specifically for order fulfillment are all changes that can be made in and out of DOM to increase fill rate.
- Middle market retailers without DOM capabilities should be looking to this functionality in preparation for an e-commerce spike.
- Retailers with current DOM capabilities should reevaluate their current logic to further prioritize successful fulfillment in anticipation for a historic busy season.
Stay tuned for a case study we’ll be featuring in an upcoming RSM Retail Newsletter! For more information about DOM within Dynamics 365 follow the link below: