Dive into the potential of an omnichannel strategy with the right shipping software solutions
In today’s rapidly evolving landscape, retailers, manufacturers, and third-party logistics (3PL) providers face a constant challenge of optimizing their order sourcing and shipping operations to minimize costs and maximize the customer experience (CX). Many top brands are utilizing omnichannel strategies in combination with advanced supply chain technology like Multi-Carrier Shipping Software (MCSS) to streamline the shipping process.
While this shipping software solution has a wide range of cost and time efficiency capabilities, it must be understood that MCSS is not an Order Management System (OMS), the software that sources the execution of product after the customer places an order. Shipping software doesn’t know about inventory, holding charges, or the labor to have an associate follow the steps it takes to execute an order, such as pick and pack. Within order processing, there are specific actions, like advise and enforce, that are better served by particular pieces of the Enterprise Software Stack (ESS). The purpose of the MCSS is revealed at the “advise” point of an order, which makes recommendations for cost and time efficient shipment execution based on information provided by other parts of the ESS. We will dive into the world of multi-origin optimization, to understand how combining an OMS and MCSS can revolutionize your supply chain operations.
Bridging the Gap: OMS and MCSS Integration
To effectively optimize your shipping operations, it's essential to connect your OMS to a robust yet flexible MCSS. Each software plays an important yet complementary role in streamlining your supply chain processes, so it is key to ensure they are properly integrated.
The OMS handles order sourcing and distribution and can track inventory, including tasks like order fulfillment processing, managing stock, and storing customer data. In addition, the OMS provides insight into valuable customer-related information such as customer history and preferences.
The MCSS brings in the necessary expertise to handle the complexities that come up with enterprise-level shipping such as business rule automations and carrier rate shopping. By seamlessly integrating the two systems, you can gain a comprehensive view of your execution costs, to make more informed decisions which are based on accurate data like the order details, inventory management, and carrier information. This connection also enables the effective tracking of shipments in real time and the ability to anticipate and address issues that come up during the shipping process.
A reliable MCSS offers an advantage by its ability to handle complex routing data without overwhelming the shipper with questions for each and every origin. Instead, the MCSS can gather and combine information to ask a single question that applies to multiple origins. This efficient approach helps save valuable time and resources while ensuring orders are executed accurately. [Want to learn more about how shipping software connects to the other pieces of the Enterprise Software Stack?]
From Advisement to Decision-Making: MCSS's Role
Once your OMS narrows down the options for executing an order, the MCSS directs the next steps for the order. The main role of an MCSS is to advise on the costs associated with different fulfillment options from carrier and service options, equipping the OMS with the necessary information to make decisions based on the most important factors.
While cost is a significant consideration, combining both solutions provides a more comprehensive evaluation. The MCSS and OMS together can consider other important variables like inventory, personnel expenses, and the ever-important shipping cost.
Because the OMS can see inventory levels across different locations, whether that is a store, DC, or 3PL, the OMS can decide on the most efficient sourcing option to capitalize on stock levels. Personnel and labor expenses play a pivotal role in the overall cost of order fulfillment and because the OMS (or sometimes the WMS) can look at labor requirements, like the pick and pack steps previously mentioned, the shipper can identify the most cost-effective order fulfillment option while maintaining operational efficiencies. The advanced functionalities available with a MCSS, like rate shopping, are a critical part of optimizing shipping rates as well. The use of local and regional carriers can provide advantageous costs not available at all origins. Carrier rate shopping can consider rates, services, time in transit, and the king of rate shopping, Advanced Date Shopping, which includes planning for delivery by a specific target date.
Expanding Profit Margins: Sourcing Fulfillment with Precision
Multi-origin shipping optimization goes beyond just considering costs and speed. A well-designed OMS and advanced MCSS solution empower you to strategically source the fulfillment of each order, leading to increased profitability.
Let's consider a real-life example: a clothing retailer. Imagine you’ve received an order for a blue t-shirt. You can source the tee either from a physical store at its full price of $30.00 or from a warehouse where it will be offered at the discounted price of $20.00 next week. By utilizing the insights provided by the MCSS, you can make a calculated decision that maximizes your profit margin. In this example, the MCSS advises the most profitable sourcing option by analyzing a multitude of factors, like current inventory levels in stores vs warehouses, the expected discount at the warehouse, and the likelihood of selling the item at full price from the store before the discount starts.
By leveraging MCSS’s advice, you can select the fulfillment option that offers the highest profit margin. Sourcing the item from the store at its full price makes more money on each item sold, rather than settling for a lower profit margin sourcing it from the discounted warehouse.
The Proof is in the Pudding: Omnichannel Strategy Revealed
When you connect your OMS with an industry-leading MCSS, you unlock the full potential of an omnichannel solution. Seamlessly utilizing all available resources and optimizing the inventory allocation, you achieve efficiency in your operations by leveraging multiple inventory sources, such as stores, warehouses, DC’s, and 3PLs to fulfill orders. This efficiency translates into multiple benefits for your organization including cost savings, improved customer service, and a competitive advantage in today's demanding and evolving market.
Cost savings are achieved with this streamlined approach reducing unnecessary costs associated with excess inventory, expedited shipping options, and underutilized facilities. This enhanced efficiency has a direct impact on customer satisfaction. Streamlining order processes enables faster order processing, accurate tracking information, and timely delivery. The ability to fulfill orders from the most efficient location also allows for faster shipping times, reducing transit times and improving the overall CX. Finally, by delivering shipments faster and at a lower cost, you can gain a competitive advantage, not only attracting new customers but cultivating loyalty among current customers.
In the dynamic world of shipment optimizations, facilitating a multi-origin strategy that’s optimized is the key to unmatched efficiency and cost savings. By integrating your OMS with a reliable yet flexible MCSS, you can make well-informed decisions, leverage complex routing data, account for local and regional carriers, and strategically source the fulfillment of orders. This comprehensive approach not only minimizes costs and maximizes profits, but it ensures a positive CX.
Take the first step towards unlocking the power of multi-origin shipping optimization to propel your business to new heights of success by contacting the shipping experts at ProShip.