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Understanding the Key Challenges in Omni-Channel Order Fulfillment

<div id="content"><div class="parentsection"><div class="section"><div class="kalturaVideoLessonWrapper"><div aria-label="" class="kalturaVideoLessonContainer" data-testid="video" id="1_km41q05w"></div></div></div></div><div class="parentsection"><div class="section"><img style="max-width:900px;max-height:none" class="image 1_1_landscape" title="Flowchart outlining various aspects of site management, including transportation, inventory import, sourcing strategy, simulation, availability, sourcing, and reservations." alt="Flowchart outlining various aspects of site management, including transportation, inventory import, sourcing strategy, simulation, availability, sourcing, and reservations." src="/service/media/ICOMF1_02_en-US_media/ICOMF1_02_en-US_images/ICOMF1-01-U3L1O1T1_001.png" tabindex="0"><div class="imageCaption"></div></div></div><div class="parentsection"><div class="section"><div tabindex="0"><h3>Challenges in Omnichannel Order Fulfilment</h3></div><p tabindex="0">Today, retailers have to manage the trade-off between customer satisfaction, which is tied to fast fulfilment in full, and protecting their profits, which are being eaten up by increasing costs of fulfilment. On one hand, businesses must have a centralized, accurate inventory picture to make the most efficient sourcing decisions based solely on their business objectives. On the other hand, rapid delivery of orders in full is essential in order to keep consumers happy and expenses low or under control. Now, SAP customers can ensure the ideal balance between customer satisfaction and saving time and costs by optimizing the fulfilment plan across all business goals at the same time with SAP Order Management for sourcing and availability.</p><img style="max-width:900px;max-height:none" class="image 1_1_landscape" title="Icons representing feelings (sad, neutral, happy), a scale for balance, a graph on a screen, and three figures pushing carts." alt="Icons representing feelings (sad, neutral, happy), a scale for balance, a graph on a screen, and three figures pushing carts." src="/service/media/ICOMF1_02_en-US_media/ICOMF1_02_en-US_images/ICOMF1-01-U3L1O1T1_002.png" tabindex="0"><div class="imageCaption"></div></div></div><div class="parentsection"><div class="section"><div tabindex="0"><h3>SAP Order Management for Sourcing and Availability</h3></div><p tabindex="0">SAP Order Management for sourcincg and availability essentially answers two questions:&nbsp; are the products being requested in an order available? - SAP Order Management for Sourcing and Availability product availability offers a centralised omnichannel view on what's available to sell and is based on real-time POS Sales, ERP inventory , including safety stocks, and real time reservations, created and updated directly in SAP Order Management for Sourcing and Availability. Reliable availaility contributes to customer satisfaction and conversion.</p><p tabindex="0">The second question it answers is: where should the order's products be shipped from, according to their sourcing strategies, which are based on a company's business goals.</p><img style="max-width:900px;max-height:none" class="image 1_1_landscape" title="Two computer screens side by side displaying SAP Site Management. Left screen focuses on product availability. Right screen addresses product sourcing locations." alt="Two computer screens side by side displaying SAP Site Management. Left screen focuses on product availability. Right screen addresses product sourcing locations." src="/service/media/ICOMF1_02_en-US_media/ICOMF1_02_en-US_images/ICOMF1-01-U3L1O1T1_003.png" tabindex="0"><div class="imageCaption"></div><div tabindex="0"><h4>Are the products available?</h4></div><ul style="list-style-type:disc"><li tabindex="0">Collects inventory info from different locations (distribution centers, stores and more) and centralizes them</li><li tabindex="0">Availability is stored as a time series, i.e. includes upcoming availability</li><li tabindex="0">Calculates what is available to sell based on initial availability, reservations, safety stock, context and sourcing strategy</li></ul><div tabindex="0"><h4>Where should the products be sourced (i.e. shipped) from?</h4></div><ul style="list-style-type:disc"><li tabindex="0">Determines sourcing based on products availability, sourcing strategy and optional input parameters such as shipping method (including pick up in store) and latest delivery date</li><li tabindex="0">Sourcing strategies are configured based on business goals</li><li tabindex="0">Sourcing also calculates the average delivery date and the average cost to ship for the order</li></ul></div></div></div>

Overview

SAP S/4HANA Cloud Private Edition, Management Accounting

<div><div>Discover how SAP Order Management for Sourcing and Availability optimizes order fulfillment in this video. Learn about the challenges in omnichannel order fulfillment and how OMSA helps achieve business KPIs.<br><br># This description was auto-generated #</div></div>

Introducing SAP Order Management for Sourcing and Availability 

Now we can see it. Okay, great. Let me go into presentation mode. So we move to order management for sourcing and availability, arms up for friends. Friends, as Haike said at the very beginning, there's a reason for the late PM of the product. So this is the agenda for today. What I tried to do is introduce a little bit like Adam did, the series of concepts that are key for understanding SAP automation for sourcing and availability. I will not focus so much on the implementation side of it, because obviously you have the rest of the boot camp for it, but I still try to follow the order that you will need to follow when actually implementing the product for a customer. So let's start with, without further ado, the overview of So, before embarking on the development of the product, we tried to review once again the challenges in omnichannel order fulfillment. And what we saw is that on one side, there's a very important point of focus, which is customer satisfaction, though we want to make sure that customers when ordering our products are satisfied. And this is linked very closely to quick deliveries. So delivery time is an important aspect. But on the other side, we want to protect our margins. And our margins are affected very much by the cost to ship, as an example. And you see how these two targets, so keep our margin as highest possible, which again is related to keeping our costs as low as possible, and keeping our customers satisfied, which usually means ship the products as fast as possible, are one against the other. So we need to find a balance to that, and therefore we need to optimize how we decide how to fulfill a certain order. And on top of it, sometimes even though companies aim to fulfill the orders on time and you fall at least 90% of the time, this is a real struggle for them because sometimes there are constraints related to their capacity to actually fulfill these orders, capacity linked a lot of times to their labor constraints. So, you know how all of this, the various challenges in omnichannel order fulfillment are related to very specific business KPIs that the companies need to achieve, or at least would like to achieve. And we will see how how OMSA helps them achieve them in the fastest way possible. So in a nutshell, what is SAP Order Management for Sourcing and Availability? The name should already tell you what it is, but just to make it very clear, OMSA responds to two questions. The first one is, are the products available? So, if we think of a consumer that places products in the cart, can we tell that consumer what is available among all the products that they are trying to buy? And the second question is, where should the products be sourced from? Once we have determined that they are indeed available for purchase, where is the best options among all the sites where these products are available for shipping. So if we focus a little bit on the availability first, what OMSA does is it collects inventory from different locations, which could be distribution centers, sites, and more, and centralizes this view of availability. Availability, which is stored as a time series, So, we have the ability to look a little bit into the future, not only to what is specifically available right now. And finally, OMSA calculates what is available to sell. Very important. Based on this initial availability that we have collected from all the different locations. Reservations that OMSA itself takes to avoid over-promising. So when a customer buys certain products, these products are reserved until the order is basically fulfilled. We take safety stock into account again to avoid over promising and disappointing customers. And as well as we have further ways of manipulating what we show as available to sell using contacts and the sourcing strategy itself. And we will see how these two aspects further allow a business configurator to manipulate availability and what is shown to consumers as available. Instead, when we talk about sourcing, again, the question is, where should the products be sourced from? And OMSA takes this decision based on, first of all, products availability. Obviously, we cannot source what is not available. but also a sourcing strategy that the business user can configure in a very easy way. But we also admit certain optional parameters such as shipping methods, which the consumer could choose themselves, including pick up in store, of course, and also latest delivery dates. These parameters are optional if the consumer doesn't specify them, then OMSA just chooses the best shipping method and the best delivery date based on the source and strategy. As I was saying, sources and strategies are configured directly in OMSA and they are based on business goals, not on rules. And we will see what that means in a second. And as an answer to the question, not only does OMSA say, okay, these products will be shipped from location X. But they will also say, on average, a product shipped from location X to the delivery address will take this amount of time. And so it will return the average delivery date, but also the average delivery cost to ship to the customer. Sorry, the cost ship that the company has to pay, not the consumer. So this is what will be returned from our sourcing call. And based on these parameters, the customer, the company, may choose to surface to the consumer a certain expected delivery range and a certain expected shipping based on the average cost of ship to them.

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