How do you consolidate a central DC with the flexibility to handle unpredictable demand across all sales channels? Although the omnichannel model is now relatively well established, a challenge that retailers continued to grapple with is how to reconfigure their supply networks to achieve better alignment between delivery responsiveness, product variety, and convenience.
Here are a few things to keep in mind when designing a central DC on S/4HANA Fashion:
- How do you ensure stock protection across different channels within a central DC? For example: Do you use 1:1 Segmentation of demand and supply so that there is strict stock protection or proceed with 1:M approach where there is a common pool of stock and define a strategy to ensure the consumption takes place based on certain priority as per business requirements?
- How can a central DC service multiple subsidiaries across multiple channels? For companies, it is 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, ecommerce channel has the highest priority, so how do you ensure the ecommerce orders are always fulfilled? ecommerce ECOM orders from one subsidiary cross consume supply belonging to another subsidiary?
- Using Product Allocation. Understand how the Product Allocation (PAL) function in S/4HANA can help in maintaining the priorities during order fulfilment when working within a central DC and a common pool of stock.