Automating the Retail Value Chain: Step-by-Step

by | Mar 9, 2022 | Automation, Omnichannel, Suppliers

If a supplier’s business could be described in a single word, it would have to be COMPLEX. No matter your company’s size or product type, you need to manage (simply) more. The retail value chain is ripe for automation, but let’s start with a game before we get into that.

Calculating Your Retail Complexity Score

Step 1: Add up the retail channels you serve and the trading partners. Include every retailer, every marketplace, every direct-to-consumer site, catalog, etc.

Step 2: Add up the number of business systems you use. Include your ERP or accounting system, OMS, PIM, TMS, WMS, and any others. (Don’t include any systems already integrated with every channel.)

Step 3: Multiply the totals from Steps 1 and 2 to find your retail complexity score.

Step 4: Grab an energy drink. No matter your retail complexity score in Step 3, it is only going to get worse unless you read on.

When a Retail Value Chain Works in Concert

Most of you likely scored at least 20 points and some of you are likely in the hundreds. The good news is the solution is the same, just at a different scale.

Your systems and channels need to work together seamlessly to deliver the customer experience we all expect. They must become integrated, hands-free and accessible.

Here are a few examples of how a well-orchestrated, connected value chain looks:

  • Available inventory is broadcasted to multiple shipping solutions by you or your 3PL across all locations and updated in real time. You predictably ship any order profitably and fulfill any SLAs or contracted commitments (oops, it looks like we need to add another data source).
    • Shipping solutions, such as ShipStation, have inventory level insight to answer whether you can commit to and fulfill an order
    • Once the product is allocated and leaves on a truck, inventory levels are updated and broadcast to each of your order channels
    • Not every order channel has the same priority. Smart allocation capabilities let you customize available inventory levels
    • The outcome is customer confidence whether that is the end consumer via your eCommerce store or drop-ship model, or a wholesale merchant
  • Any order from any channel updates your accounting or ERP solution for accurate financial reconciliation and billing.
  • Product details and item attributes are digitally managed across all order channels and integrated into an item management system (IMS) when this season’s latest items launch. This information is published to all sales channels, checked for pricing and information compliance, and updated with the broadcasted inventory details.

In a nutshell, there is not a single system or channel that should operate in a silo. Omnichannel retail demands an automated value chain where systems speak to one another and share the data needed to get business done, all without any intervention.

Moving Forward, One Step at a Time

An automated retail value chain is not a unicorn solution that can only be seen in our dreams. It is possible, and companies are chipping away at this utopia by connecting one system and channel at a time.

At SPS, I work with QuickBooks EDI customers and others just starting this journey. Their first step is to connect a handful of retailer customers to their EDI solution and cut data entry. Next, suppliers often consolidate all their channels’ orders into a single solution to avoid vendor portals and have complete visibility to their sales. Next, they usually link to their shipping solution such as ShipStation, their Shopify store, or an inventory service like Fishbowl Online. With each integration, the value chain is getting faster, more accurate and requiring fewer resources. Suppliers see that each step is progress and there are tangible rewards. The key is to get started.

Taming Your Complexity Score

Suppliers can reap great rewards with just a single integration. The result is their retail complexity score starts to decrease! With each automation, the process improves and frees up time to tackle new opportunities. Meanwhile, orders are shipping, bills are paid, and your staff is productive. And automation does not break when your product takes off and orders increase.

Our goal at SPS is to help our customers tackle their biggest hurdles within their value chain. Our solutions and experts know where to deliver value and are flexible, so we work with any tech stack. Let us transform your house of cards (aka, tech stack) from one hanging together by a thread into a future-proof automated value chain.

Reach out to SPS today. We can help you identify how to start, take your next step and define a path to make your retail value chain work best for you.

Cory Mortenson