Pity the retailer.
Within the past 90 days, a major global shipping company went bankrupt, delaying or stranding hundreds of thousands of containers bound for retailers eager to stock their shelves for holiday shoppers.
Add in a rancorous election filled with economic uncertainty, an early Midwestern blizzard, and the threat of a strike at Chicago’s O’Hare Airport and you can see why retailers may be seeing stars during a time when financial success may be the difference between being in the red or black for the year.
Real time supply chain risk
But as shoppers line up at brick and mortar stores with flyers and coupons in hand, or shop from home or office with a mouse in hand, how do merchants prevent fist fights in the aisles or frustrating online stock outs?
This is a two-sided supply chain issue with one eye on the supply chain and one on the customer.
A bankruptcy, a blizzard, an election and strikes have all threatened supply chains in the past 90 days — you can see why retailers may be seeing stars.
Supply Chain Dive
On time delivery of a properly forecasted mix of products, on the shelves in time for a coordinated holiday marketing campaign, is the first hurdle retailers face. The issues in global shipping this fall have provided retailers a full taste of real time supply chain risk.
But once the inventory has landed at the distribution center or stores, how is it managed to optimize fulfillment to those excited holiday shoppers?
Optimize inventory levels
“With proper inventory management retailers can increase customer satisfaction and also avoid markdowns of excess inventory that impacts their profitability,” Nick McLean, CEO of Toronto, Canada-based OrderDynamics told Supply Chain Dive.
As the crunch time of the holiday season nears, McLean's focus is right down to the SKU level since OrderDynamics provides cloud-based order retail order management systems for brands like Speedo, Quicksilver, J. McLaughlin and Bouclair.
"We provide a dynamic and holistic approach to inventory management in all different channels — stores, warehouses, drop ship vendors — and also the inbound supply chain,” he added. “Our long term goal is for retailers to reduce the cost of their fulfillment channels and maximize the sell through of inventory at all locations."
Fulfillment key to customer satisfaction
“Retailers ship directly to online consumers, have product available in their stores to purchase, and also service those who buy online and pick up the merchandise at the store,” said McLean, referring to those customers as ‘click and collect’.
Logistics also plays a key role in making sure the retailers have the right stock in the right place.
“Companies can maximize fulfillment when they have visibility into their inventory levels,” said Charles Dimov, OrderDynamics’s director of marketing. “Order management systems like ours allow retailers to leverage their inventory and improve turns, even while adjusting and balancing inventory levels between sites to meet specific customer demand.”
Logistics plays a key role in making sure the retailers have the right stock in the right place.
Supply Chain Dive
McLean notes it is important to maximize stock velocity and route shipments from the best facility, be it a store or a warehouse, in order to get the order quickly to the customer.
According to the National Retail Federation, more than half of consumers have already started on their holiday shipping, and 3 percent are already done. But they also report that more than 40 percent have yet to begin, increasing pressure on all parts of the supply chain as the holiday shopping season gains momentum.
A practitioner turned educator, Rich Weissman has more than 25 years of experience in all facets of supply chain management. He is past president of the Institute for Supply Management–Greater Boston, and the recipient of the Harry J. Graham Memorial Award, the highest honor bestowed by the Association.