W H I T E PA P E R

Digital Order Fulfillment
The traditional approach isn’t working—what’s the alternative?

The Game Has Forever Changed
Customer experience has always been at the heart of omni-channelorder fulfillment, driving innovations like “buyonline-pickup-in-store” (BOPIS) and “buy-online-return-in-store.” Even in the B2B space, customer loyalty and trust
are business-critical. A recent Gartner survey found that trust contributed over twice as much to the customer
experience than even product expertise and commitment to customer value realization.
That’s why everyone from retailers to logistics service providers to manufacturers and distributors are scrambling tofind a suitable omni-channel technology strategy. In the wake of COVID-19, as people grapple with uncertainty, as
well as new customer and consumer demands, such as surges in online shopping and returns, business have been
forced to adapt and recover whatever trust had been strained.
Today’s challenge is not only managing high customer demands across multiple channels but doing so amid
disruption. And that paradigm applies beyond our current pandemic. A successful technology strategy in a
global, dynamic, and disruptive playing field is built on resilience. Which means being flexible and agile under
unexpected conditions.
Because legacy systems unfortunately lack the flexibility to modify and adapt to changing pressures, the popular
approach has been to purchase state-of-the-art systems capable of addressing every new pain point that arises.
Despite the fact that these systems are themselves agile and flexible, having multiple disparate solutions becomesa time and cost burden that actually limit flexibility and can even affect the customer experience.

Order Fulfillment Isa Constraint- BasedProcessOmni-Channel
Fulfillment Transcends
the Value Chain

Unifying Solutions
to Optimize the Full
Order Lifecycle

The best way isn’t always

Operating and optimizing

Configurability empowers

the cheapest way

across silos.

brands to adapt and act fast.

While the overall aim of omni-channel fulfillment is to get products to end customers as efficiently and costeffectively as possible, the processes involved in doing so are dynamic, not linear. Because fulfillment processes
contain many requirements and constraints, strategy will vary by brand, industry, customer, region, potential daily
exceptions, and so on.
That’s why more and more businesses are realizing that their fragmented systems architecture is failing them.
Stand-alone solutions tend to be proprietary and not designed to be interconnected. As a result, each system
will factor the requirements and constraints of its own function, rather than the entire operation. Without holistic
visibility and control over the full order lifecycle, companies may optimize an action at one touch point to thedetriment of another.
Historically, businesses have been held back by their tendencies to work in silos and purchase technology insilos. To enact a successful omni-channel fulfillment technology strategy, it’s critical for businesses to realize thetraditional practices and mindsets that are holding them back and start considering a more powerful, holistic
alternative, such as a supply chain orchestration platform.
A supply chain orchestration platform, as indicated in the image below, connects multiple, disparate systems
and parties for one unified view and control over the planning and execution of all order types. This allowsbrands to optimize across silos toward a cohesive and cost-effective customer experience.

Inbound & Return Order Status
Product Master Data
Inbound & Return Orders

Order Status

ERP/ CRM
SYSTEMSWEBSHOPSeCommerce Order

Stock Levels & Adjustments

PORTALALERTSSUPPLIERS

Service Provider

SUPPLY CHAIN
ORCHESTRATION
PLATFORM

PORTALCUSTOMERS

Service Order
Stock Levels & Adjustments

ALERTSTransport Order

Service Status & Invoice
Shipping Details

Order Routing

FULFILLMENT
CENTERS,
WAREHOUSESCARRIERS,STORES

Order Status & Invoice
Last Mile Delivery
Store Goods Receipt

3Digital Order Fulfillment
Leveraging Smart Business Rules
Intelligent order planning and execution leverages smart business rules to factor constraints before determining
the optimal fulfillment path.

Customer Order
Order
1 Planning
2 Shipment
Planning

Order
3 ServicePlanning

Constraints

Constraints

Constraints

y Order Priority

y Flow Pathsy Resourcesy Inventory Allocationy Service Levelsy Capacity

y Replenishmenty Costsy Capability

Order Fulfillment Is a Constraint-Based Process
Omni-channel fulfillment can be difficult to optimize because of the sheer magnitude and complexity of all
the factors at play. Consider the process: An order is received through one of multiple channels; the customer’s
requirements will meet one of multiple possible service levels; the order must then be sourced from one ofmultiple locations, routed through one or more of several possible modes, using one or more of several
possible carriers. Once the order is finally delivered to one of multiple destination points (i.e. direct to consumer,
direct to fulfillmentcenter or store), the customer may choose to send it back – a returns process which holds its
own complexities.
Additionally, companies have other variables to consider, such as tax, customs, and compliance changes forinternational orders.
They must also be prepared to swiftly handle unexpected scenarios, ranging from tariffs to floods to pandemics
which affect successful fulfillment and a consistent customer experience.
Put simply, order fulfillment is a constraint-based process. To consistently optimize order fulfillment, brands must
determine how to make the best use of their assets (e.g. facilities, partnerships, transportation modes, finances),
given customer expectations, whether B2C or B2B, and the constraints of each order.
The best way isn’t always the cheapest way, but a balance of all these constraints.

4Omni-Channel Fulfillment Transcends the Value Chain
Companies, as part of multi-party networks, exist in an ecosystem. The function and decisions made by any branchof the supply chain affect the whole. Yet, within enterprises and across the greater value chain, business processes
tend to be siloed and exist within a fragmented systems landscape. Data contained within an OMS and WMS andTMS each rely on their own system of record. Without unification, there’s no single version of the truth, no end-toend visibility, and no optimization across all constraints.
There’s also the problem of departmental silos to overcome. From e-commerce to logistics to manufacturing andprocurement, each sector has its own incentives to focus on, with little awareness for the greater picture. So, while
one branch purchases an order management system to make smarter sourcing decisions and another buys atransportation management system to gain visibility over shipments, the departments don’t tend to communicate
on a solution that integrates and optimizes the planning and execution elements as a whole. With disparatesystems, each department can perform well within their own silos, but they do not have the global visibility orcontrol to make holistic, strategic decisions.
Cross-silo decisions are ultimately more cost-effective. For instance, bypassing a DC might increase transportation
spend but lower the full cost-to-serve figure. Fulfilling orders from a single location may be the standard practice,
but leveraging multiple locations across the network can positively impact service levels.

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Without global visibility, there’s no way to gain such strategic insight into the bigger picture and adapt practices inways that enhance customer loyalty.
A successful omni-channel fulfillment technology strategy must therefore transcend the value chain. Visibility,control, and optimization must occur across silos, not within them. In this sense, businesses benefit a great deal
from multi-enterprise business network technology, or technology designed to orchestrate across a domestic and/or international ecosystem of business partners.

Traditional data flows are disconnected

Network data flows are centralized

With purchase, sales, and return orders bouncing

A unifying supply chain orchestration platform

between suppliers, warehouses, fulfillment andstandardizes and simplifies data flows by connecting

return centers, multi-modal carriers, customs, andmulti-party network systems and placing customer

B2B and D2C customers.

orders of all types at the center of business processes.

6Multiple Channels

Multiple Customers

Direct to consumer; direct
to store; direct to afulfillment center, etc.

Wholesaler, Distributor,
Retailer, End Consumer, etc.

Order is optimallysourcedOrder is delivered
OTIF and, if returned,
it is optimallyprocessed
Order isoptimally routed

Order is recieved

Multiple Service Levels

Multiple Modes

Consistently meeting all
customer expectations,
whether B2C or B2B.

Need to be able to fulfill
across multiple legs andgeographies.

Unifying Solutions to Optimize the Full Order Lifecycle
The traditional technology strategy of focusing on a point solution is no longer a viable one. Effective supply chainorchestration requires global visibility across all network parties, strategic planning that is aware of all service level
expectations and constraints, and granular insight into the details of every touchpoint. Moreover, because omnichannel fulfillment deals with the full order lifecycle, visibility and control must span every order type and every
flow type –including returns.
Configurability is also key to any omni-channel fulfillment technology strategy. While customization is static andtakes time to adjust, configurability empowers brands to act fast and adapt with new flows, partners, or products
before their competitors.
A supply chain orchestration platform offers global Control Tower capabilities that unify fragmented systems
on a single platform, exposing the problematic processes and behaviors that occur in silos. The technology also
holistically supports and optimizes all inbound, outbound, and reverse flows, offering TMS, OMS, and reverse
logistics capabilities all on one platform. As a supply chain solution that supports the full order lifecycle andoptimizes across silos, it’s a gamechanger.

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Making the Case
It’s up to the CSCO and CIO to change the paradigm to a holistic approach that optimizes across departmental silos
rather than within them. A holistic approach to a technology strategy begins by placing the order flow at the centerof that strategy. In other words, an order-centric strategy is designed around the full order lifecycle. It is a technology
strategy which recognizes that all order flows affect one another, that multi-party collaboration spans planning,
execution, and reverse management, and that balancing customer service levels and the costs accumulated tomeeting them can be optimized holistically.
Years ago, companies like Walmart, saw the supply chain as a competitive advantage, invested early, and are now
industry leaders. Those who were slow to invest are still playing catch-up. Only, now, the supply chain isn’t just astrategic advantage, it’s a matter of survival. Flexibility, process alignment, and execution speed are what’s keeping
companies afloat in today’s disruption. Adaptability is vital.
A unified, order-centric platform enables flexible management and control across the full order lifecycle. By
connecting disparate systems, brands extend their visibility and control, an essential component to being able toadapt and act fast,whether through dynamic inventory allocation or fulfillment. Converging order and logistics
management also improves flexibility and optimization, as it extends cost management and fulfillment strategy tointelligent sourcing, routing, and carrier planning, in addition to execution. The holistic approach also spans returns
management, so similar optimization and cost strategies get factored into the greater picture.
The idea is to understand where cost truly is at every touch point in the supply chain. Only then can brands begin tosee the effects of every constraint and how it bares on service levels and costs. With a fuller view, brands can optimize
all orders continuously and realize how to reliably fulfill on the perfect order – delivering at the highest service levels
and lowest possible costs.
It still remains true that delivering upon a successful technology strategy for omni-channel fulfillment is aboutaligning people, process, and technology. Like the notion above that compels us to look holistically around the entire
order lifecycle flow to optimize processes and costs, the organizational componentis just as important to align acrossthese processes as well.
The silos need to be broken down in the organization to drive the most efficient processes and a holistic technology
strategy for omni-channel fulfillment. Delivered through an order-centric platform, brands can enable such success fortheir company and their customers.

8About Kinaxis Inc.
Everyday volatility and uncertainty demand quick action. Kinaxis delivers the agility to make fast, confident
decisions across integrated business planning and the digital supply chain. People can plan better, live better andchange the world. Trusted by innovative brands, we combine human intelligence with AI and concurrent planningto help companies plan for any future, monitor risks and opportunities and respond at the pace of change.
Powered by an extensible, cloud-based platform, Kinaxis delivers industry-proven applications so everyone canknow sooner, act faster and remove waste. Don’t believe us? Ask us to prove it. Learn more at Kinaxis.com.

www.kinaxis.com

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