Logistics challenges in the retail industry
Is your company out of stock of best sellers skus?
Is there too much slow moving stock in stores?
Does your company have poor discipline with stock control?
Is your current replenishment method working?
As the retail sector is experiencing very challenging market conditions due to the recent global financial crisis, many organisations are forced to review their entire operation to combat the range of factors that are inhibiting growth. The increased presence of online shopping, tightening of fiscal measures by banks and the escalation of operational costs such as transportation and rent are all barriers to growth for this sector.
From a supply chain and logistics perspective, some retailers have been quite slow to change their business models and are now facing extremely difficult times as opposed to the last two decades where margins were much stronger. Incorrect inventory buy decisions created a bullwhip effect down the supply chain adding substantial inventory and additional administration costs to manage the stock down. The retailer typically had two selling cycles to address excess inventory issues which were season driven and end of year clearance. The dynamics of the industry have changed and require your organisation to change and remain ahead of the competition.
Our way forward to meet the supply chain and logistics challenges for retail.
- Buy and sell through strategy needs to be developed to focus on improving inventory management between stores, distribution centres, warehouses and suppliers. This will include the formation of an inventory policy, procedures and protocols.
- Know your total cost to serve which incorporates all stores, warehouses and DC's within your supply chain. Understanding your cost base down to a store level will provide your organisation the ability to make informed decisions and implement the right strategy for supply chain and logistics.
- Implement the right Inventory Replenishment Model for your retail business. All resources that touch stock from warehouse through to retail store operations need to understand the importance of managing inventory and the role that they play in the process. Involvement of suppliers within your supply chain will allow for an end to end analysis of your inventory and implement the right inventory optimisation strategy for your supply chain.
- Implement the right supply chain technology that enables realtime linkages between vendors and key customers which will allow for transfer of information that drives the planning processes and enhances supply chain performance. Refer to our inventory reduction strategies that will suit the retail business sector and drive down inventory levels.
Select a Supply Chain and Logistics Assessment that identifies real improvement.
We offer a range of assessments that are tailored to specific functions within your oganisation that require review. Depending on the scope of works or the scale of your organisation, our assessments are typically completed within 2 weeks of commencement for single site entities. Reference sites available on request.
