IT services and solutions for retail and hospitality

  • 15 Nov 2008

Lubricating the retail supply chain

Nigel Illingworth

Nigel Illingworth, Product Director of Retail Assist, argues that optimising supply chain performance is fundamental to success, especially so when markets are unsteady and consumer confidence is jittery, and that technology is the key to success.

Even when retailers have streamlined and optimised their supply chain, there is invariably still more to be achieved. There are many ways for retailers to make real improvements, not only making cost savings but also finding ways to increase revenue, and technology is a key enabler of all that.

For example, in a multi-channel world, it is critical to ensure great customer service, optimise operations and control costs by, say, integrating stock for stores with stock for online purchases via a single stock source. Technology can help you get those logistics right, and support all channels effectively. There are clear opportunities for further gains through, for example, greatly improved communications and collaboration through the chain.

Indeed, one of the biggest wins technology can deliver is by providing far greater visibility across the entire process. This enables the retailer to focus on potential logjams before they become an issue, to ensure the right business process is followed to drive workflow and move the chain on. For this reason, it is important to integrate your supply chain system with other retail systems. The payback is particularly significant when you build in an integrated retail business intelligence (BI) solution that offers powerful analytics.

The benefits provided by technology are self-evident. For instance, the Global CFO of retailer Paperchase attributed a 6.4% sales uplift to its Merret supply chain solution in the year following its deployment. With gains such as that, you can make a strong case for investing in the right technology.

Payback can be fast and sustained. In any case, entry level costs today aren’t necessarily high: managed solutions and ‘software as a service’ (SaaS) approaches mean you don’t have to be a big player to get the same benefits, with smaller retailers able to pay a flexible ‘per user’ cost, or access solutions on a rental basis.

As the technology develops, so do the business opportunities. In terms of future trends, true mobility is really gathering pace. We are now seeing sales staff use in-store hand-held devices in real-time to check stock availability in the warehouse, or on the shop floor in front of the customer. These devices can also speed up the returns process from stores, ensuring even quicker stock turnaround in sales, markdowns and promotions.

RFID technology is another growth area. Here, we are only seeing the tip of the iceberg in terms of its practical application. Automating warehouse operations is one example, using RFID tech for scanning and tracking, and robotics for picking, sorting and despatch. Warehouse management also becomes automated. The results are faster throughput, faster and more accurate store replenishment, lower costs, and retailers meeting seasonal changes in consumer behaviour.

Even the best-designed, highest performance sports car will seize up if its moving parts are not lubricated effectively. That’s the role of technology in the supply chain: to make sure all the inter-locking parts work smoothly together, to help push the supply chain engine to new heights of performance at ever faster speeds.

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