Retailers and their suppliers feel they lack supply chain visibility. The absence of visibility and transparency has at least two causes. First, there is a lack of collaboration between supply chain partners. The second cause is the insufficient quality of replenishment for managing inventory levels in stores, on DC-level and on many levels between supply chain partners.
Managing supply chain visibility
Managing supply chain visibility is somehow difficult to accomplish. Partners need to work together and share data. According to research from Gartner and others there is a growing trend of sharing data, albeit on a small scale and with caution. But the main challenge retailers and suppliers face is to agree on how to collaborate and share potential benefits that can be achieved. Choosing the right software for support in collaborating is important as well.
Retailers should get rid of protective behavior based on marketing or sales arguments, and remove any block from a good collaboration. This will certainly lead to economical benefits. A focus on how to improve customer sales and on-shelf availability is what they need. Shoppers need to see what they can buy and get inspired. It’s primarily the availability in the shop and the position of a product on a shelf in a store that will differentiate one product from another. In addition, a platform for managing inventory can help in achieving supply chain visibility and replenishment quality. Consider vendor managed inventory (VMI) from Datalliance.
Non-corrupt data and applying logic
Driving business conversations is essential when improving the availability of products. Performing based on KPIs is part of that. In order to succeed in this, data cleansing has to be performed first. Afterwards, retailers and suppliers as well as logistics service providers are sure they can exchange non-corrupt data.
Then it’s time to start sharing consistent orders through their supply chains. All partners should look at the same data and they will need to keep each other updated when a product code or order has been changed or added.The next step involves applying logic. The Datalliance VMI solution supports retailers and their suppliers in creating order points, such as the number of items someone needs to reorder when reaching a certain amount of items on the shop shelf. Second, the logic should contain the minimum order quantity. Once these parameters are set, anyone can start driving business conversations on how to improve the on-shelf availability and reduce the out-of-stock rate of products.
Monitoring and measuring
When accurate data and order transparency are in place, partners can benefit from business conversations on details. Datalliance VMI allows users to drill down into the data and answers to their questions. Measuring the performance of replenishment is also possible. Diving into the root cause of why there is still a small percentage of out-of-stock is just one easy step further. Both this and changing business parameters will improve supply chain visibility and customer satisfaction.
Collaborate with partners
Acting fast is needed for retailers and their suppliers, as customers move quickly from one shop to another, online and offline. Making sure you can use the best demand forecasting and can build shipments for route to market is needed. Being able to configure several combinations of types of replenishment today isn’t "a nice to have," it’s a prerequisite for success. Act fast, collaborate with your partners, and invest in the proper tools that help you create supply chain visibility.