The effect of omni-distribution systems in managing demand order fulfilment frequencies : an apparel retailer.

Abstract

There is no gainsaying that the world of business is characterised by its own set of commercial dynamics. It is within this milieu that the study explores the emerging strategies that characterise the world of commerce with its myriad challenges. In the prevailing commercial environment it is observed that retailers are adopting the omni-channel approach as customers demand a more seamless shopping experience. To remain competitive, distribution networks are challenged to fulfil volatile customer demand from the omni-channel. South African retailers have taken to digital platforms despite barriers to entry in respect of the high cost of broad band and logistics challenges The research objectives of this study aim firstly, to determine the effects of omni-channel retail adoption by retail apparel companies in managing the transformation of the supply chain retail distribution systems; secondly, to examine the extent of relative change in demand to which the distribution systems enhance frequencies of order fulfilment, lead time and cycle time and fill rate; thirdly, to ascertain how the demand-driven omni-distribution systems influence the order fulfilment frequencies in a designated supply chain network; and finally, to establish the perceived contribution of integrated information systems towards information sharing and visibility within the virtual omni-distribution network. Omni-channel retailing is a contemporary topic with very little literature available especially in a South African context. The study employs deductive reasoning with the use of an exploratory case study which adopts a mixed-method approach. The exploratory nature of the study involves the exploration of new phenomena to understand the relationship between variables using interviews and a survey to collect data. Based on a population of 333 managers from 161 stores, 175 assistant store managers, store managers and area managers were surveyed and 13 senior managers and directors from Retailer X and the third party logistics (3PL) were interviewed. The univariate and bivariate methods were used for quantitative analysis while content analysis was used in the qualitative approach. The study reveals that the dispersed landscape and spectrum of cost consciousness to convenience focused customers warrants a customized distribution approach for South African retailers. Using the principles of leagility under the push-pull theory, cost and lead time has to be managed to achieve perfect order fulfilment.