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Attending the JDA Forum event, I heard an unusual comment. The planning and allocation attendees made the comment that omni-channel does not impact their role. The concept of planning and allocating inventory has become more dynamic and difficult.

Most retail planning, allocating and replenishment systems are driven off historical data. But, historical data only reflects where the item was received, picked up or shipped. Hence your planned, allocated and replenishment process may be sending inventory to the wrong location. Why?

Think about a ‘ship from store’ transaction for an out of stock item…

Store 1 is out of stock and the customer wants the merchandise. They can order it and have it shipped from another store to the their home. How does your planning and allocation solution account for this inventory sale?

Does your solution replenish the shipping store or recognize that the demand was created in an out of stock store? Many merchandise planning and allocation solutions are not sophisticated enough to capture where the demand was created and how or where the customer really wanted to receive the merchandise.

If you want to capture true demand, the combination of an order management, planning and  allocation and a warehouse management solution is the answer. The order management system captures where the customer started the transaction and when and where the customer would like to receive the merchandise. Only when this information is integrated with the planning and allocation and warehouse management system data, will you be sure you are replenishing the correct store with the inventory required to meet demand.