Will Roche - Industry Market Development Director - Microsoft Dynamics
As retailers juggle holiday madness with new year preparedness, locking down go-forward strategies represent daunting challenges. This is especially true when it comes to matters of the supply chain.
For help, I turned to my colleague Will Roche, Industry Market Development Director at Microsoft Dynamics. Will boasts over 30 years’ in IT, in roles at both IBM and Microsoft, with most of his experience in the retail and hospitality industry.
Below, Will shares five supply chain management strategies for retailers to consider in the new year:
If I may paraphrase Homer Simpson – ‘meet the Supply Chain: the cause of, and solution to, all of our problems.’
Anyone who has ever worked in a retail setting understands that the journey from raw material to finished product can be long – and oftentimes – fraught with peril. Supply chain problems can be as innocuous as a handful of products being damaged during shipping, to as major as a hurricane swallowing up a supplier’s operations.
The five supply chain strategies below are designed to both enhance efficiencies along lengthy supply chains while proactively addressing any potential problems that can arise:
1. Don’t Glaze Over Automation
You have likely heard of the need to automate your retail operations countless times – so much so that the word ‘automate’ has transformed into white noise.
So instead of talking about automation, let’s talk about the four semi truckloads of products en route to your biggest retail outlet. Delayed by a snowstorm, they will arrive just two hours before your doors open. On the last Saturday before Christmas.
In this scenario – what sounds easier: picking apart each box, entering and stocking each product manually – or – with the help of barcode scanning devices and an Enterprise Resource Planning (ERP) system that automatically enters the goods into your system and tells you exactly where (in your warehouse or store) to put them?
2. Tighten Multi-Channel Inventory Management
In a summary of the 2009 holiday buying season posted to Infosys, Supply Chain Matters Executive Editor Bob Ferrari writes:
“The ability to research products, place orders online, pick-up or return purchases at the nearest local retail outlet have captured enormous interest, and consumers demand that these experiences occur without a glitch.”
In the language of the consumer, this means that all products must be available or handled quickly and close to home. Fortunately, with just a bit of research, retailers can both source suppliers that focus on rapid replenishment of goods and implement the inventory management software systems that can help keep the supply chain absolutely seamless.
3. Ensure Global Access To Actionable Information
Luciano covered this point in a recent post on retail ERP systems and corresponding article published in Speak Magazine. Essentially, any retail supply chain that involves the shipping of products or materials also involves dealing with potentially massive amounts of data scattered and siloed throughout the world.
ERP systems can help ensure this information stays interconnected and is easily accessible by all necessary stakeholders, whether they are in charge of shipping wool sweaters out of Ireland, or receiving leather gloves in Texas.
4. Synchronous Surging
“When a product is not in stock on the shelf, consumers buy a different brand about 26 percent of the time,” writes Steve Banker of Logistics Viewpoint.
In discussing consumer packaged goods, Banker points out that more and more consumers are making their buying decisions at home – writing a shopping list prior to visiting a store. While this may speak more to the need for enhanced merchandising (and make no mistake, it certainly does) it speaks just as heavily to the need to tighten supply chains and ensure product availability surges in line with marketing efforts. And if not? Revisit Banker’s quote.
5. Vertical Integration
In a great case study of Tiffany & Co. discussed by Khudsiya Quadri of TEC Blog, we learn how the diamond giant keeps margins tight and achieves complete supply chain visibility through vertical integration – or by maintaining ownership of the same raw materials (ie the stones) that become products (ie the diamonds.)
Is complete vertical integration something your retail company can realize? Likely not, as Quadri details later in the piece that most companies work to only a degree of integration. But the idea behind vertical integration is a powerful one – and one that underlies each strategy I have shared: the more of our supply chain we can oversee or control, the stronger the links in our supply chain will be.
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If you are a retailer seeking to implement a new supply chain strategy, contact To-Increase for a complimentary consultation.
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Nice blog .. and very important points thanks Will
I totally agree that brick and mortar retailers may need to offer online shopping platform in order to maximize brand value and capture every business opportunity.