Expert Column: Adapting the Supply Chain to Meet Consumers' Omnichannel Needs

Grocery supply chains are stretched. In the face of increased competitive disruptions and new trends in consumer behavior, grocers are seeing more strain in their supply chains. Disruptors like AmazonFresh are delivering directly to the home, and other big box chains are fighting to gain ground in grocery. With the rise in omnichannel in other retail sectors, consumers are demanding new concepts, greater variety and new options in delivery and pick-up from grocers.

The concept is simple: customers should be able to go to a store, see something they like, and order it for home delivery. Or order the item online and pick it up at a store.

Today’s grocery supply chains must be more nimble and agile in order to deliver these experiences. Achieving success in this new paradigm is dependent upon having a sound distribution and logistics infrastructure in place, yet the importance of a good transportation management system (TMS) is surprisingly misunderstood.

As we’ve seen in other retail sectors, this new variety of consumer options creates extreme complexity that requires supply chains to be both flexible and dynamic. In essence, it doesn’t matter when, where or how the customer wants the product — retailers must be able to deliver. 

Grocery supply chains change dramatically over the course of a year.  From summer produce to high-peak holiday volumes in November and December, knowing how and when your supply chain needs to flex is what makes today’s grocery supply chain needs so extreme.

Supply Chain Commerce Solutions

Supply Chain Commerce solutions are available to help grocers get commerce ready and dramatically increase flexibility in their supply chains. For today’s grocer, TMS is central to ensuring that supply chains are ready to sell and ready to execute.

A TMS solution can help grocery chains lower costs and reduce complexity across these omnichannel fulfillment paths. The benefits of a robust TMS solution as a critical component of the omnichannel technology stack include:

• Probabilistic modeling functionality performs a variety of “what-if” scenarios, such as determining optimal freight term assignment. Unlike traditional modeling tools, probabilistic modeling accounts for variability, which can provide more accurate results than simply using averages. This capability can help grocery chains be more agile and respond faster when supply chain disruptions occur, such as winter storms. It also helps provide fresh insight into the business ramifications of expanding into new territories, opening up a new distribution center and addressing other supply chain changes.
• Transportation planning helps provide greater visibility into the capacity for shipments across multiple modes and locations as well as common motor carriers or private fleets. This can identify the best transportation management scenarios to meet logistics requirements for quality, cost and speed and can reduce empty miles, improve on-time performance and pinpoint anomalies that impact the supply chain.
• Yard Management maximizes yard and warehouse efficiency by managing the flow of inbound and outbound goods, which enables organizations to plan, execute, track and audit loads based on characteristics like shipment type, load configuration and labor requirements.

Grocery chains most effectively take advantage of these next-generation productivity and efficiency capabilities through a single-platform approach where TMS is integrated with other solutions, such as warehouse management. Having complete, uninterrupted visibility into operations offers a single version of the truth in this complex and dynamic age.

Those in the food and beverage sector that truly want to differentiate themselves based on service and profits should consider TMS a critical component to a successful, overall omnichannel strategy.