Retailers should boost services to avoid "being Amazon-ed," Tecsys says

Eight months after acquiring the software vendor OrderDynamics, supply chain management software company Tecsys Inc. has integrated the firm into its portfolio in an effort to meet growing demand for the complexities of multi-faceted fulfillment, the company says.

Tecsys is following that strategy to help its clients provide improved service levels to consumers so they can avoid "being Amazon-ed" by mega-retailers offering overnight delivery and low prices, Tecsys CEO and president Peter Brereton said in a call on Monday.

Montreal-based Tecsys acquired OrderDynamics for $13.4 million in 2018, saying the firm's cloud-based distributed order management (DOM) software would complement its own technology for meeting omnichannel fulfillment needs in an age of rising retailer and consumer expectations.

The combined platforms could help reduce operational costs and uncover optimization opportunities for users such as third party logistics providers (3PLs), distributors, retailers, and brand managers, the company said in an April release.

Specifically, Tecsys said its warehouse management system (WMS) has been extended with OrderDynamics' DOM capabilities, enabling distributors to source inventory from the most cost-effective locations and to ensure optimal order routing by unifying their inventory pools across many channels in real time

"We don't think it will be very long before you have the same customer dealing with both the supply chain execution and the distributed order management side of the house," Brereton said. "This is a response to what we see happening in the broader industry, where retailers are needing to get into logistics, and logistics providers are needing to get into retail."

That same trend is blurring the line between 3PLs and 4PLs, since logistics providers at every level are increasingly asked to do more than simply handle the distribution of goods between a manufacturer and retailer, he said. Rather, they are now expected to play a role in direct to consumer (DTC) tasks, since both retailers and brand owners are taking online orders on their own pOréals and outsourcing the fulfillment to 3PLs.

Instead of just running a warehouse that provides shipping and receiving, many 3PLs now also manage order taking, pricing, returns, and more, Brereton said. Offering those extra service layers is the critical step for preserving market share in a world where e-commerce giants increasingly offer next-day and same-day delivery, he said.

In pursuit of that goal, Brereton said, "We take pockets of dark assets, light them up, and open them to a digital supply chain so our users can provide consumers a way to get what they want, when they want it."

According to Brereton, the integration between Tecsys and OrderDynamics enables that vision in several ways: combining the two firms' consulting organizations, tying their research and development departments together, offering a single point of contact for customer service, and merging the marketing and sales groups into integrated teams.

In future steps, Tecsys plans to improve its mobile app for retail associates, and add machine learning algorithms to its demand planning and forecasting capabilities for inventory optimization, he said.