WMS
What is a warehouse management system (WMS)?
What is a WMS? How does a WMS address warehouse management complexities ? Find out everything you need to know about Warehouse Management Systems.
Multi-brand, multi-site supply chain solutions: a nuanced challenge
Complex logistics don't require complex supply chain management solutions. Explore the challenges raised by different environments and how to address them.
Camille
Jan 10, 2025
Implementing supply chain management solutions in any retail environment is a complex task. Even the simplest scenario – managing orders through a single warehouse with a single Warehouse Management System (WMS) – requires an Order Management System (OMS) to implement the most efficient processes and maximize OTIF (On Time In Full) orders rate. The OMS is responsible for managing the entire order lifecycle, from order capture, inventory management, and fulfillment to customer communication and returns processing. The WMS, in turn, manages the physical inventory within the warehouse, directing the picking, packing, and shipping of orders based on the instructions received from the OMS.
This involves plenty of integrations with other systems and plenty of ‘rules’, given the standard imperatives of minimizing fulfillment costs while meeting customer expectations and ensuring no compromise to customer service.
The integration challenge becomes even more complex in scenarios involving multiple brands, multiple warehouses and, potentially, multiple Warehouse Management Systems (WMS). Here, we introduce these challenges and present potential solutions by examining how an OMS setup can adapt from simple to more complex, multi-entity configuration.
The single, mono-brand warehouse scenario
In this, the simplest, set-up already mentioned:
- unified inventory management is straightforward: your OMS has a clear and singular view of inventory levels, with no discrepancies or synchronization issues between different systems or locations.
- fulfillment is also straightforward: orders are routed directly to the single warehouse, where they are picked, packed, and shipped using the instructions provided by the OMS.
- returns management is simplified: returns may be processed back into the same, single warehouse (whether directly or via store), allowing for streamlined restocking and inventory updates.
Naturally, most businesses aim to outgrow this scenario. This may involve the implementation of additional warehouses, or more complex customer experiences such as different brands or multiple sales channels. Even if you’re still at this stage, you’ll want an OMS that can scale and evolve, to accommodate these or any other growth scenario.
The multiple mono-brand warehouse scenario
When a single OMS is required to manage multi-brand orders fulfilled from multiple, mono-brand warehouses, the complexity increases significantly, from order-routing to fulfillment.
Among the rapidly multiplying challenges we need to overcome are:
- inventory fragmentation. With inventory located across multiple warehouses, you need a consolidated view of available inventory across the entire network, to avoid the possibility of overselling or stockouts. A flexible OMS addresses this by providing real-time visibility into inventory across all warehouses and locations, enabling it to make informed decisions about order-routing and fulfillment.
- efficient order routing. Your OMS must accurately and automatically route orders to the correct warehouse (and associated WMS) based on the brand and product availability. If any order contains items from multiple brands, ‘split orders’ may well need to be sent to the relevant warehouses, increasing the complexity of the fulfillment process. Your OMS must provide sufficiently advanced order orchestration logic to be capable of this and of optimizing order-routing to minimize shipping costs and delivery times.
- increased shipping costs. Shipping from multiple locations instead of one inevitably increases fulfillment costs for a retailer, and potentially extends delivery times for a customer. Yet orders containing items located in different warehouses from different brands may require precisely this. To minimize costs without unduly impacting delivery times, your OMS can be configured to ensure a minimum level of consolidation of items - perhaps via scheduled inter-warehouse transfers - before the ‘last mile’ dispatch to the customer.
- additional returns complexity. Your ideal scenario is that unwanted items are returned to the correct mono-brand warehouse; failure here may lead to delays in restocking and refunds, affecting customer satisfaction. A returns management system (RMS) integrated with your OMS can ensure returns are routed to the correct warehouse, along with the (automated) process of updating inventory levels. Alternatively - if your OMS data analysis shows it makes sense - choose to keep returned products in the warehouse it was sent to, waiting for the next multi-brand order from a customer. This is a first step towards the single multi-brand warehouse/multiple mono-brand warehouse organization.
The single multi-brand warehouse scenario
In this scenario, the OMS sends orders to a single, multi-brand warehouse. This setup may seem simpler than the multiple mono-brand warehouse environment, but it nonetheless presents its own set of challenges:
- inventory management across brands. A single warehouse must manage inventory for multiple brands. Each of these may have different handling requirements, require specific storage conditions, and necessitate a different picking process. This can quickly lead to inefficiencies and errors in order fulfillment, but can be avoided providing your WMS is sufficiently adaptable to be capable of segmenting inventory by brand while maintaining an overall view for the OMS. Note that this requires robust inventory management practices, and possibly even brand-specific zones within the warehouse to streamline picking and packing processes.
- order prioritization. Your OMS may need to prioritize orders across multiple brands, perhaps balancing the needs of each brand, while maintaining overall warehouse efficiency. Luxury brands, for example, tend to take pride in rapid, efficient delivery. Conflicting priorities could lead to delays for the customer or sub-optimal fulfillment (particularly higher costs) for the retailer. Again, this can be overcome by ensuring your OMS supports intelligent prioritization algorithms which will account for brand-specific Service Level Agreements (SLAs), inventory levels, and shipping costs. This will help to ensure that the most critical orders are fulfilled first, without compromising overall efficiency.
- brand identity preservation. Unless you are one of the world’s major marketplaces, each brand you sell may require specific packaging, labeling, or customer communication, to preserve its brand identity. To manage this complexity, your combination of WMS and OMS should support brand-specific workflows – encompassing, for example, the automated selection of packaging, labeling, and communication templates.
- returns and reverse logistics. Handling returns in a multi-brand warehouse can be challenging, for comparable reasons. Items from different brands may need to be processed differently, while incorrectly processed returns may lead to inventory errors (and dissatisfied customers). Consequently, your OMS needs to include sophisticated reverse logistics capabilities, allowing it to identify returned items by brand and process them according to brand-specific rules, update inventory correctly and finalize processing of the returns.
The single multi-brand warehouse/multiple mono-brand warehouse scenario
In this complex scenario, let’s consider a single OMS which sends orders to a multi-brand warehouse - which may, in turn, ‘choose’ to fulfill elements of those orders from multiple, mono-brand warehouses if stock availability, cost-efficient fulfillment or a good customer experience mandates doing so.
As well as many of the challenges already discussed above (such as brand identity preservation), there are further nuances and specific challenges that must be considered:
- order consolidation and splitting. Your OMS must, as we know, determine the optimal fulfillment strategy for each order. It needs to be able to “decide” whether to fulfill the entire order from the multi-brand warehouse or to split it across multiple mono-brand warehouses; incorrect decisions can lead to increased costs and delays. This requires an OMS to process advanced algorithms that analyze inventory levels, warehouse capacities, and shipping costs in real-time. By dynamically determining the best fulfillment strategy, the system can minimize costs and ensure timely delivery.
- inventory synchronization. In this model, inventory of the same item may lie in two (or more) locations. Synchronizing inventory data across multiple warehouses, especially when all play a role in fulfillment, is a significant challenge. As always, the risk is that discrepancies in inventory data may lead to stockouts and/or fulfillment delays, or even overstocking. You need a fully robust centralized inventory management system that continuously synchronize data across all warehouses, and which delivers to the OMS real-time visibility into inventory levels, essential for making accurate fulfillment decisions.
- warehouse coordination. Particularly when orders need to be partially fulfilled from different locations, coordination may be necessary between those locations to ensure that items arrive simultaneously, near-simultaneously, or at least within the timescale expected by the customer. Coordinating activities is complex and requires particularly close integration between your OMS and the various WMSs. They require the ability to track shipments from different locations and coordinate delivery schedules to ensure that items arrive as expected.
- cost management. Ensuring timely delivery for customers is, to some extent, the entire purpose of a retailer operating multiple warehouses in this way. But it’s no surprise that, in such a complex scenario, any failure to make correct decisions will quickly see fulfillment costs rise - particularly if any of the warehouse locations are significantly remote from each other. To prevent this, your OMS should include cost-optimization features, enabling it to compare shipping options and select the most cost-effective solution. This might involve choosing slower, more economical shipping methods for non-urgent items or consolidating shipments where possible. Typically, this will require human input in the form of, for example, rules, which the OMS uses to come to decisions. These may be complex in their own right – so consider, too, the user-friendliness of your OMS.
- customer service and communication. We’ve touched on this earlier, in other scenarios, but – as a reminder – customers are unlikely to know, and are unlikely to care, that their order is being fulfilled from multiple locations. What they do expect are timely updates and seamless service – but, for a retailer, such communications are more challenging in this scenario, especially when orders are split across multiple shipments. Ensure your OMS is up to the task of providing automated updates on order status, shipment tracking, and expected delivery times. This ensures that customers are kept informed throughout the fulfillment process, reducing the likelihood of dissatisfaction.
- returns handling across multiple warehouses. Customers returning multiple items expect to be able to send a single package to one location. Such simplicity for the customer may create invisible (to the customer) complexity for the retailer: when items are fulfilled from multiple warehouses, your OMS must determine the correct return location based on the brand and the original fulfillment warehouse. A sophisticated returns management system that is fully integrated with the OMS and WMS is essential: it must automatically direct inbound returns to the appropriate warehouse, updating inventory levels accordingly and streamlining the restocking process.
Goal reminder
Every retailer with multiple warehouses has made their decision to do so based:
- on the customer side, fulfillment costs and customer expectations/experience; and
- on the internal side, internal operational considerations such as supply chain considerations.
As soon as multiple warehouses are part of your retail ecosystem, a rugged combination of technology, process optimization, and strategic decision-making are necessary to ensure that the customer side of that equation does not become a trip-hazard for the business. The level of data exchange necessary to make a success of such business set-up makes investment in and integration of a high-performance OMS with a similarly high-performance WMS, together with straightforward integrations with related key systems such as a Transportation Management System (TMS), the clear and obvious route forwards.
Such systems ensure seamless data exchange, real-time visibility into inventory and shipments, and automated decision-making – the ingredients you need for success, however your warehouses are structured.
Find out more about Kbrw's OMS here.