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Supply Chain Opinion
<< inventory thresholds (high, medium and catalogue and multiple back-end souring will have to take a comprehensive approach
low) were set up in the monitor such that options through multiple warehouses, etc., to front-end inventory visibility by striking a
whenever the inventory crosses any of these our main criteria is that the SCM system balance between site performance and
thresholds, the respective inventory status is needs to be state-of-the-art and robust. accurate fulfilment to realise a comprehensive
published to the front end (see Chart C). user experience. With online retail store
Efficient and speedy experience being a key focus area among
CHART C: BUSINESS PROCESS FLOW
operation various channels, we believe companies need
The traditional ‘default’ to ‘slice and dice’ inventory consumption
way of achieving a real- patterns and feed these as an input to optimised
time picture of inventory solution design. In this context, we believe
in the online retail sector that our recommended way forward of ABC
is to take the one-size-fits- classification of items for inventory visibility
all route. But, ultimately, and fulfilment would go a long way in
online retailers need to balancing the twin challenges of fulfilment
determine how they can accuracy and online store system performance.
classify different types of
inventory items in order
to both look to guarantee Appendix
ready availability of A traditional definition of ABC Classification
product and to ensure System
2
is as follows:
that customers can be ‘A class’ inventory will typically contain items
notified of the availability that account for 70 per cent of total value.
For this implementation, the high and medium of a product almost immediately as they shop ‘B class’ inventory will have around 20 per
inventory levels were clubbed together (Class online. Whether you want to call this ABC, cent of total value.
B + Class C), with neither inventory check nor or inventory control based on category, or ‘C class’ inventory will account for the
reservation being carried out at the front end. demand pattern categorisation, or whatever remaining 10 per cent.
If the inventory level equals low (Class A), terminology you feel most appropriate, it Source: www.wikipedia.org
inventory check and reservation is performed essentially adds up to the same principle,
prior to confirming the order. A different approach which we believe is the most sound for the References
for ‘medium’ inventory level items has not been efficient and speedy operation of an online 1. Shopping Cart Abandonment Survey by
adopted here as there was not a significant retail business. Global Millennia Marketing.
number of items falling in this category. www.globalmillenniamarketing.com/shopping
Conclusion %20_cart_abandonment_survey.htm
However, definition of inventory threshold With the amount of data growing by the day, 2. ABC inventory classification from
limit became a major challenge as it can vary any e-commerce system for online retailers wikipedia.org circlesolid
from one item to another. At present, Sterling
Commerce’s SCM Suite 8.0 supports
configuring common inventory thresholds for
Infosys at a glance
all items as part of the monitor rule setup. But,
Infosys defines, designs and delivers IT-enabled business solutions that help Global
configuring individual monitoring rules for
2000 companies win in a Flat World. These solutions focus on providing strategic
each item does not promise a good design.
differentiation and operational superiority to clients. With Infosys, clients are assured
To a certain extent, the problem can be
of a transparent business partner, world-class processes, speed of execution and
the power to stretch their IT budgets by leveraging Infosys’s Global Delivery Model.
overcome by using a finite set of monitoring
Infosys has over 100,000 employees in over 50 offices worldwide, and is part of the
rules by grouping a set of items at the same
NASDAQ-100 Index and The Global Dow. For more information visit: www.infosys.com
threshold level (item group concept). However,
an enhancement to the product for enabling
the monitor to dynamically fetch the inventory
thresholds for an item will provide flexibility
Infosys in Supply Chain Management
for item-based monitoring. Infosys enables world’s leading organisations to unlock value from their supply chain
by providing pertinent solutions that cover the spectrum of extended organisation-
Vendor agnostic
Demand Planning, Supply Planning, Sourcing & Procurement, Supply Chain Execution
As a consultancy, Infosys is SCM solution
and Enterprise Asset Management. With a wide range of package-driven solutions
vendor agnostic, recommending a range of
and accelerators, the company has a track record of turning the most complex supply
chain situations into seamless delivery pipelines. Infosys has a strong alliance focus
proven solutions from vendors such as SAP,
with key supply chain product and technology solution providers; including SAP,
Oracle, Sterling Commerce, IBM Maximo and
Oracle, Sterling Commerce, IBM Maximo and Microsoft to provide services on
Microsoft. In the online retail space where
packaged supply chain applications. Learn more about Infosys capabilities in SCM
there may be multi-channel situations, multiple
at: www.infosys.com/supply-chain
front ends, an EDI requirement, an online
48
MANUFACTURING
&LOGISTICSIT May 2009
www.logisticsit.com
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