Multi-channel distribution, also called omni-channel distribution, seems to be the new gold ring of distribution for retrial pharma and apparel. Why is that? Well there are several benefits in cost savings if your company can master multi-channel distribution.
First what is multi-channel distribution? It is the ability to supply direct market (consumer orders), wholesale outlets and your own retail outlets , or any combination thereof,all from one distribution center.
Let’s explore the cost savings or watch the video
First you have a reduction in duplicate inventory. If you have a distribution center that is dedicated to retail, one that is for direct market, and one that is for wholesale you have much more inventory then you actually need. In addition you may have some inventory for direct market in different packaging than you would if it was for wholesale or retail distribution. this in turn creates even more SKUs and inventory. in the last year carrying cost for inventory has increased over 4%.
On top of that inventory carrying cost you have the cost of the building, the cost of employees, the cost of real estate, because the power, etc. if you can eliminate a distribution center in all its cost you can save your company quite a bit of money.
Even if you don’t have dedicated distribution centers for each channel, you still have to deal with how to pick for 1 to 2 line customer orders while also picking for 250 line retail or wholesale orders.
So what is the solution?
The solution for multi-channel distribution is careful analysis of your data in order profiles as well as some clever engineering. abco automation has helped a number of clients with their omni-channel challenges. With the application of our unique way of analyzing data combined with modern software, your pickers can fulfill orders for direct market and retail and wholesale and never know the difference.
Want to get started down the road towards a distribution center that is a competitive advantage? Call abco automation today and let’s talk.