18 Supply chain execution


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Retail’s seismic shift


Retail organisations are facing a seismic shift in the markets they serve – from multiple channels to international expansion. But are the system in place to fulfil orders and manage returns across this altered and highly complex landscape? By Nick Allen


and the expansion of retail operations overseas have converged as strategic influences on execution and, as a result, have radically changed the game-plan for theway companiesmustmanage information to cost-effectively serve theirmarkets. According to Craig Sears-Black, managing director at


I


ManhattanAssociates intheUK:“The trendis for change – and change in retail is all about trying to find new markets. So it’s about how do we fulfil efficiently in overseas markets? How do we find distributors for our products? How do we find other channels and other routes to market? And how do we capitalise on the continued growth of the internet?” He points out that the challenge retailers face is in


addressing this need for radical change. “If you look at most supply chains, they have grown up over the years with an evolution of systems, through either a number of packages that have been acquired and integrated together or that are ‘home grown’ and these are coming to the end of their viable life because they cannot adapt to change.” Sears-Black postulates that for the


greatmajority of retailers it is time for a step-change in systems and operational capability. “Everything over the last twenty years has been very incremental. It’sbeenrelativelyminor change, lets say, closing down one network of DCs or integrating one network with another,” he says. “If you overlay on to that the increased complexity of combining, maybe,wholesalewith retail,with direct to consumer, then you can’t use the same techniques to respond to those challenges.” So howdifficultmight this challenge of


agility be for in-house teams trying to maintain and upgrade “home-grown” systems? Is there enough in-house expertise these days to cope with this growth in complexity? “This is quite interesting… the aging programmer community,” he says, pointing out that a great number of systemsmay be twenty or more years old. “A lot of people who


n recent years supply chain execution has become significantly more complex. For retailers in particular, the growth in channels to market, the trend to sourcing of products fromdistant locations


wouldhavedesignedthe codes andhavebeenmodifying these systems are now looking to retire and that is causing a skills gap –that’s another reason why people need to re-look at the long-termfuture of their IT.” For Sears-Black the key to managing multi-channel


complexity is having global visibility of inventory. “Wherever it [inventory] is in your supply chain you should have visibility of it.This is absolutely, not the case inmany places right now,” he says. “Yes you may know how many purchase orders you


have for a product, and you may know when the manufacturing date was, and you may know when the shipment date was, but you rarely have real-time visibility across all channels and across all stock holding locations. It’s a very difficult thing to claim to do.When looking at inventory optimisation, it’smuchmore about the stuff that’s outside the warehouse than it is about optimising inventory levelswithin thewarehouse.” ClaireUmney, generalmanager at AEB (International)


in the UK, believes that it is critical for supply chain execution systems to be fully integrated with processes such as global trade management and ERP. “When dealingwithSCElegacy systemswithlimitedintegration options, visibility and collaboration platforms can be deployedtoextract anddistributedata fromanumberof systems and supply chain partners for end-to-end transparency and control,” she says. “Only when the data flow is


uninterrupted – from the initial sales order, through to delivery to the end customer – cansupply chainoptimisation be achieved.” She adds: “When used in conjunction with a business intelligence solution, thepotential cost reductions can be even greater.” Nigel Illingworth, CEO of Merret – part


Onlywhen the data flowis uninterrupted... can supply chain optimisation be achieved. ClaireUmney


of Retail Assist, sees retailers placing a heavy emphasis on “channelling” and working with a greater number of concession partners. “We now have connections to about 45 – 50 different concession partners with an out-of-the- box solution,” he says. “Every concession partner has their own


formats and views, so we spend a lot of time creating connections to these people, then when our clients expand their business, or we get new clients on-board,


September 2012 Supply Chain Standard


Fashion customers are accustomed to next-day or 48 hour fulfilment.


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