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Distribution and logistics
Slick warehousing notwithstanding, when it comes to transportation of goods from supplier to warehouse and from warehouse to the point-of-sale or directly to the customer, there is little more to be done to overcome the physical limitations of transport logistics.
Stock Control
Todays retailer has to have the right stock in the right place or available on very short cycle times to protect profit margins and to please customers. Whilst most retailers can do more to reduce inventory levels and improve replenishment timing and accuracy, forecasting and matching of supply to demand is a constant challenge.
Multi-channel impact
Multi-channel retailing adds its own complexities to the supply chain. The strong trading performance reported by many retailers over the recent Christmas period was largely due to record numbers of online purchases, proving that multi-channels can increase choice and reinforce brand loyalty. However, the need to support customer self-service puts an additional strain on the supply chain.
Many retailers embarked upon online trading without getting the logistics right and without forecasting return rates. Some bought stock specifically for the online channel, often outsourcing its management, which added to their problems. Lessons have now been learnt and many retailers are bringing processes back in house, holding and managing a single stock source themselves and making it available to service multi-channel supply chain.
Each part of the supply chain should be optimised but there are certain elements which offer little scope for further improvement. Where significant gains can come from is a more savvy use of communications technology.
One final thought. There is no better starting point than putting the customer at the heart of the supply chain, so perhaps the term supply chain excellence should be replaced with sales fulfilment excellence?
About the author:
Alan Morris is Managing Director of retail IT outsourcing company, Retail Assist, and can be contacted at alan.morris@retail-assist.co.uk
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