SUPPLY
would be distinct. Now the trend is for click & collect and that brings in issues over whether something should and can be fulfilled from a shop’s own stock or from another distribution centre and the consequences for stock levels for each method chosen. “More advanced retailers, especially in the US,
are starting to have a single view of stock and be able to select optimal fulfilment via better overall visibility. They are using algorithms to identify what a variety of best fulfilment scenarios are and therefore savings costs and improving on service by having the visibility, the fulfilment can sometimes be immediate.” Retailers that are looking closely at this include Matalan which has invested heavily in its distribution network recently. Marks and Spencer’s food department is also thought to be looking at how best to manage its day-to-day delivery to store along with its online orders that are also delivered to store. Day added: “Using the analytics can work no matter
what the model, New Look for example runs its online and store business as fairly distinct entities and the data can be used to forecast what inventory levels are needed. This is a fairly US-typical way of doing things as the stores tend to be geographically separate from the distribution centres. In the UK meanwhile, the distance tends to be less and so it is less of a logistical nightmare to move stock around, especially in the dry or ambient store goods. Here, it can be pretty pointless fulfilling from stock, or at least there is less to lose than with perishable goods.” Clearly retailers need to have the best systems that able to support appropriate rules and underlying data analytics to best inform and aid decision making process and operational planning. Today’s supply chain management is about a more integrated approach and running different scenarios to give better and more visible information as a base upon which to act. Jackson from SAS said: “Having the right tools means that retailers can use data to run algorithms that give everyone a platform to sit down and see what is happening, what the variables are and how that relates to what the retailers is trying to achieve and therefore decide on the best way to get there.” And Day concluded: “Retailers are investing
massively in their systems to facilitate this whole change process around omnichannel. However they are right at the beginning of the process. The crux of the issue is making a product available over the channel which is most likely to generate profit. In four to five years’ time the convergence between various customer touchpoints will be complete and the pricing and profitability refinement will also be in place.”
42 Autumn 2014
SUPPLY CHAIN ROUNDUP
Retail Technology highlights topics shaping supply chain technology investments through to 2014, including visibility, stock losses and customer expectations
CUSTOMERS AVAILABILITY
Retail success is directly linked to fulfilment ability
Oracle’s latest consumer research (December 2013) reveals that 92% of consumers will not wait for
out-of-stock products, but will seek to shop with another retailer to find the product they want
VISIBILITY British businesses are
unaware of where products are sourced from
Nearly three-quarters of the supply chain professionals surveyed by the CIPS (July
2014) admitted they had “zero visibility” over the early stages of their supply chains
REPUTATION
Retailers’ reputations hinge on logistics fulfilment
In the UK, 32% of people
surveyed blame the retailer more than the courier or
logistics provider for the late delivery of online orders
(YouGov survey for Thomas Eggar, September 2014)
OPERATIONS TRANSIT
Retailers are more focused on goods lost in transit (GLIT)
88% of loss prevention
professionals say fraudulent GLIT claims are a bigger focus for retailers than they were two years ago
(Transactis-Retail Knowledge survey, September 2014)
TECHNOLOGY 40 YEARS
The barcode celebrated its 40th anniverary over the summer
The barcode ultimately saved the UK retail industry £10.5
billion every year, according to Simon Walker of Stibo
Systems (From the barcode to the Internet of Things,
RetailTechnology.co.uk, 28 August 2014)
LOSSES
Stock management to blame for almost £1bn monthly sales loss
High Street retailers can’t
blame the recession for the loss of almost £780 million in sales every month due
to poor stock management (Missing £Billion Basket Report 2013, Venda)
www.retailtechnology.co.uk
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