How do you consolidate a central distribution center able to handle unpredictable demand across wholesale, retail and eCommerce channels?
Although the omnichannel model is now relatively well established, retailers continue to grapple reconfiguring their supply networks to achieve delivery responsiveness, product variety, and convenience.
Here are a few things to keep in mind when designing a central distribution center on S/4HANA Fashion®:
How do you ensure stock protection across different channels within a central distribution center?
For example: Do you use 1:1 segmentation of demand and supply so that there is strict stock protection? Or a 1:M approach with a common pool of stock then define a strategy to ensure the consumption takes place based on certain priority as per business requirements?
How can a central distribution center service multiple subsidiaries across multiple channels?
For companies, it’s important to ensure the supply is protected for each channel and sales subsidiary.
For example: The need to define a strategy that allows for both horizontal (channel level) and vertical (subsidiary level) with the required priorities.
How do you define the required priority?
For example: Generally, the eCommerce channel has the highest priority, so how do you ensure the eCommerce orders are always fulfilled? Will eCommerce orders from one subsidiary cross consume supply belonging to another subsidiary?
Understand how the Product Allocation (PAL) function in S/4HANA can help in maintaining the priorities during order fulfillment when working within a central distribution center and a common pool of stock.