I attended JDA’s 2015 FOCUS Conference recently and was pondering Rethinking the latest rhetoric of “What’s Next?” and the one term that keeps recurring to me is Omni-Channel Fulfillment (OCF). As I watched various demonstrations by customers executing the purchase transaction in a multitude of ways, I was also thinking about my current wrestling match implementing the JDA planning solution at a global manufacturing company. Our challenges are not new- Master Data, and Cross Region Process Rationalization versus some truly unique, regional requirements. Thinking more about this, additional questions came to mind like how does OCF play here? Does the rise of omni-channel mean the end of planning?
Through the course of the next few weeks I’d like to talk through some of the considerations that bubbled to the surface:
- As we explore OCF, what is the scope and time span of the challenge?
- The stunning master and transactional data implications: cross referencing, transactional timeliness, and synchronization across time zones and systems.
- The deliberate, diligent thinking that is required to define the rules of dynamic, optimized order fulfillment.
I really want to challenge some of my foundational, personal supply chain planning beliefs by asking myself some tougher questions like “Is what I’m hearing just a new catch-phrase? Is it a revolution, or the signal that it’s time to a change a few of the bricks in this foundation?”
It seems that some of the chatter with the advent of OCF implies that we don’t need to plan and that all you have to do is place an order and watch the magic happen. Then, the goods are whisked to the customer via drone, who lovingly deposits the package at the customer’s feet by tracking them with the GPS in their phone.
I spend of a lot of time thinking about time. In a previous post I talked about Demand Latency Potential (DLP), which is the duration a customer will wait before choosing another product or vendor, or foregoing the purchase altogether. In these OCF discussions, we are talking about a transaction where the DLP is a few hours or a couple of days. Our Commitment Horizons in the value stream are far longer than these DLPs.
After thinking through some of these initial questions, I came back to explore some of my supply chain planning ideas about the future of planning. The nature of the purchase transaction is changing and Omni-Channel is the ‘sticky’ term that we use to describe it. OCF doesn’t replace planning; it requires innovative planning like we haven’t seen before. Deliberate evaluation of our value streams and strategically crafted supply chain and inventory strategies give us the necessary flexibility to dynamically and profitably fulfill orders. We now have more tools and options for creating this potential – in defining where and in what form we hold inventory and the mechanisms for converting and transferring product to customers.
Time, expressed as inventory, is not linear. Inventory is time. Money is inventory. Money is time. How will you invest your money to collapse time and create the potential you need to meet demand effortlessly and optimally across all channels?