Putting the AI in Availability: 5 Keys to Bridging the Wholesale Supply and Demand Gap
Putting the AI in Availability 2
Tammy Kulesa, 1 minute read
The wholesale distribution and manufacturing (WD&M) landscape is entering a new era. Business-to-business (B2B) customers increasingly expect a commerce-like experience. Self-service and flexible, omni-channel fulfillment are the new gold standards. Erosion of regional restrictions means whoever has the product on hand gets the deal, and e-commerce distributors and marketplaces are muscling in. Margins are under unprecedented pressure.
The industry landscape is more demanding and fast-paced than ever. WD&M companies face an existential moment, when the usual workarounds to address legacy challenges are no longer viable in the face of cascading, unprecedented threats.
Accurate inventory and order management: A make-or-break capability
One of the main challenges faced by WD&M enterprises is transforming from legacy approaches to digital inventory processing and order orchestration, as well as moving toward solutions primed to handle omni-channel demands. Current legacy systems just can’t deliver the levels of accuracy, flexibility and efficiency required to successfully meet the moment.
Processes based on enterprise resource planning (ERP) systems and spreadsheets aren’t effective enough in handling the demands of modern commerce. As any wholesale distributor who’s tried it can tell you, attempting to back-engineer an existing, hardened ERP system into a modern solution for omni-channel inventory visibility and order fulfillment is costly — and nothing ever works quite the way it should. The result? In short, a world of pain.
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Breaking down ERP inefficiencies for inventory and ordering
For inventory and order management, the traditional ERP-based approach falls short in a number of critical areas.
Limited to no inventory visibility
Limited or no inventory visibility across nodes and networks means WD&M companies have trouble fulfilling commitments. Excess inventory ties up capital, while supply shortages have negatively impact customer satisfaction and retention. There’s no line of sight on what inventory is available to promise, to whom and when. WD&M companies have no view of their suppliers’ inventory, leading to supply issues, additional costs and delays.
Inefficient order creation and modification
Siloed, paper-based environments mean processing every order requires manual, human effort and doesn’t include a self-service option. A quick order interface means customers can create quick orders — even using traditional methods such as uploading emails, CSVs or XLSs.
Higher error rates
Legacy ERP systems invariably require more manual processing, data entry and spreadsheet management. This leads to increased levels of human error — missed orders, late deliveries, unhappy customers and a higher cost-to-serve — which negatively impacts the bottom line.
Heavy reliance on tenured employees
Too many WD&M companies over-rely on tenured employees to keep track of inventory. Sure, Hank knows exactly how many two-by-fours will be available next week in the Tahoe branch, but Hank may hurt his back while shifting stock — and be out of commission for the next three months. What then?
A lack of omni-channel support
Most existing ERPs are not built for omni-channel ordering. According to McKinsey, today’s B2B buyers are using up to 10 channels to conclude the buying process, from self-service portals to video and phone calls. Funneling orders from multiple channels into a single, cohesive inventory management and fulfillment process is complex and challenging, and it requires a built-for-purpose solution.
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Discover the benefits of OMS solutions built for B2B complexity
Enter order management system (OMS) solutions purpose-built for the complexities of B2B and business-to-business-to-consumer (B2B2C) environments — and infused with artificial intelligence (AI) and machine learning (ML) for a future of continued relevancy.
AI-infused inventory and order management solutions are the way forward for WD&M companies hoping to bridge the supply-demand gap, as well as meet and exceed customers’ new B2B omni-channel expectations. They’re scalable, cost-effective and fit-for-purpose. And they deliver key operational benefits that translate directly into profit.
Real-time inventory visibility and tracking
An advanced OMS delivers up-to-the-minute visibility into sellable and non-sellable stock, enabling accurate demand planning and reducing the risk of both inventory shortages and stale inventory.
Demand forecasting and proactive replenishment
AI analyzes historical sales data, market trends, weather and promotions to accurately predict demand, helping WD&M companies optimize inventory levels, reduce carrying costs and improve cash flow.
Intelligent order routing for optimal fulfillment
AI and ML consider proximity, capacity, customer and product locations, promised delivery dates, inventory levels, merchandise costs, the likelihood of markdowns, shipping time and costs, labor capacity and other constraints to optimize order fulfillment locations. This improves on-time delivery rates and cost-to-serve.
Automated exception handling and error reduction
AI-infused OMS solutions automatically flag anomalies like incorrect quantities or pricing discrepancies, reducing the risk of errors.
Five Ways Blue Yonder Transforms Inventory and Ordering Management Using AI
Blue Yonder’s AI-infused order management microservices deliver a fit-for-purpose inventory processing and OMS that boosts margins and efficiency at every operational level. They deliver these five transformative capabilities:
1. Real-time, network-wide inventory visibility
WD&M companies can leverage AI and ML to maximize inventory exposure and deliver accurate, risk-free promises for an e-commerce revenue boost of up to 5%. Blue Yonder delivers real-time product availability, reservations and segmentation — from in-stock/out-of-stock messaging to proximity- and location-based availability data. Blue Yonder software enables:
Perpetual, accurate and reliable inventory commitments to customers across channels
An omni-channel fulfillment architecture
Cost-to-fulfill optimization by factoring in account location, cost of merchandise, product selection, profitability, transportation options, and transport and supply chain costs
Product reservation and inventory segmentation through flexible and complex allocation algorithms
Pre-sourcing and post-sourcing, enabling WD&M companies to promise against future inventory supply
2. Smart, profitable allocation
WD&M enterprises can improve their fill rates, adherence to service level agreements (SLAs) and order-to-cash with flexible, complex allocation algorithms to support customer needs. Blue Yonder helps them:
Allocate inventory based on specific time intervals, status or counts
Allocate to fulfill the highest-priority orders versus lower-priority orders
Allocate inventory based on predetermined rules at different levels, by percentage or weighted average
Allocate based on forecasted demand and supply
3. Intelligent inventory rebalancing
Disruptions, changes and reprioritized needs happen all too frequently, especially when there are long lead times between order creation and fulfillment. WD&M companies need a way to react quickly, without creating havoc with customers. With Blue Yonder, they can:
Rebalance open demand based on defined allocation rules
Resequence pending orders for optimal sourcing and reprioritization
4. Order services optimization
WD&M enterprises can improve their percentage of perfect orders with full end-to-end visibility. They can schedule, orchestrate, modify and support the complete order lifecycle with a single source of truth from order to delivery, regardless of channels, source and types. Consider these benefits provided by Blue Yonder:
AI/ML-driven multi-factor cost optimization, to protect margins by reducing cost-to-serve
Complex organizational hierarchies for various business entities including marketplaces, third-party logistics (3PL) providers, distributors and manufacturers
Post-disruption, the ability to resequence pending orders for fulfillment, based on optimal resourcing and reprioritization
Customized workflows and orchestration rules, allocation rules and decisioning rules at different organizational levels
The ability to expand channels and business opportunities through vendor portals and marketplaces
5. AI- and ML-infused insights and actions
WD&M companies can leverage advanced ML algorithms and AI capabilities from Blue Yonder to generate actionable insights and predict potential issues that will impact order fulfillment. Always-on algorithms run unsupervised, generating patterns and identifying anomalies, as well as structuring data into easy-to-understand insight dashboards. The result? Powerful, data-driven decision-making and full operational optimization.
Blue Yonder Order Management: The fastest route to revenue
It’s far more cost-effective than WD&M companies think to transform their operations via advanced order management capabilities from Blue Yonder, and the benefits are nothing short of transformative.
Blue Yonder’s OMS microservices are easy to implement, integrate fully with existing systems and deliver unprecedented time-to-value. Once an initial WD&M site is up and running, subsequent sites can be configured within a matter of days.
Due to their modular nature, Blue Yonder’s OMS microservices can be implemented to meet immediate needs, one at a time, and rolled out at a customized pace, according to specific business and operational needs and objectives.
And with intuitive mobile interfaces, these tools can be mastered by associates in just a few hours, reducing reliance on tenured staff and streamlining the onboarding process.
Bridge the supply-demand gap with a cloud-native, AI-infused OMS solution
Digital transformation for WD&M companies no longer requires an all-or-nothing approach. With Blue Yonder’s augmentative, composable OMS microservices, WD&M enterprises can tackle their most urgent pain points one at a time. They can implement the targeted solutions they need to overcome immediate challenges, while steadily building toward a future of total operational excellence.
Make every customer and every order feel like a top priority
Find out how our purpose-built OMS microservices can help you optimize your WD&M operations, by deploying industry-leading AI capabilities to capture value at every level.
