By Kevin Permenter, research associate, Aberdeen Group
As business pressures mount, retail supply chain professionals need to increase supply chain speed and collaboration.
The pressures of increased complexity and heightened demand for supply chain speed have retail supply chain professionals looking for answers. A deeper look reveals that supply chain velocity, whether operational speed or timeliness of shipment information, is the top (combined) pressure. Supply chain velocity is a critical matter for the fast-moving consumer supply chains within the consumer markets. Case in point, the items sold by many of these companies have a short shelf life either due to high usage (i.e. toiletries or cleaning products) or perishable nature of the item (i.e. dairy, meat, vegetables). “The total shelf life of fluid milk is about 14 days. In fact, the milk that is on the shelf today was in a cow about two to three days ago,” explains Lee Falk, VP, distribution & logistics, Dean Foods at the 2012 Aberdeen Supply Chain Summit. The supply chain and logistics manager for a small North American footwear retailer states, “A more responsive retail supply chain is required to improve customer service levels — it is the foundation to fulfilling the mandate of ‘right product at the right place at the right time.’” Within consumer markets, the need for speed is obvious, but the undercurrent to increasing speed within the supply chain is the need to increase demand forecasting accuracy and inventory accuracy. Because consumer markets depend on volume to turn profit, shelf availability is paramount. Without accurate demand sensing and an accurate view of total inventory (amount by channel and location), it is overwhelmingly difficult to integrate logistics to put the “right product” in the “right place” at the “right time.”