This is the fourth in our series about the data integration challenges in a unified commerce Supply Chain. In the first, we introduced an overall model of a modern supply chain dividing the close to 50 process in five quintiles: Product, Quantity, Place, Time, and Cost. In the second of the series, we covered the supply chain touchpoints regarding “PRODUCT.” The third addressed “QUANTITY.” In this blog we address the processes that drive supply chain to the RIGHT PLACE, or destination.
In the graphic below, you can see the touchpoints that we will here explore.
If your Supply Chain Touchpoints don’t get merchandise to the RIGHT PLACE, you are certain to lose competitive advantage.
Most major retailers put a great deal of thought into the timing and conveyance of merchandise shipments. They want to know the “where and when” and “how much” about every inbound shipment. But this information usually does not flow beyond the expediters and supply chain team. That’s a shame because merchants, channels, and store ops would always find this information to be useful. Sometimes it’s imperative to the primary job of delighting customers.
Much of their energy is consumed measuring their suppliers’ compliance with shipment terms and delivery integrity. Invariably, certain locations and/or supply chain paths can pile up the discrepancies, leading to merchandise problems down the line. To do this effectively, data integration is required to inform quality control about the exact specifications of products and shipment terms.
The more destinations you have, the greater the opportunity to minimize transportation cost and maximize inventory availability. How are your optimizing your inbound shipments from suppliers, cross shipments between distribution centers and stores, customer deliveries, and returns to supplier? It’s always a trade-off between shipping in bulk and shipping with urgency. Nowadays, retailers make these judgements based on little else but the bulk and weight of the shipping container with no regard to the merchandising situation at the shipments’ destination. With better data integration, routing decisions will be more relevant if based on urgency and customer need as well as cost.
Traditional retailers have struggled with inter-store transfers, not wanting to bear the cost of moving unwanted merchandise from store to store. But, now, smart retailers winning at unified commerce are elevating inter-store transfers to strategic weapon status. More and more, transfers are used aggressively to fulfill customer orders or restore the integrity of another store’s local assortment, to extend the selling life, or to consolidate for a late-season promotion. These tactics, all driven by transfers, lead to sale uplifts and customer loyalty. But robust data integration is needed in every case to instruct the destination location on the action they must take to carry out the transfers’ purpose.
Most omni-channel retailers have learned that it makes sense to hold merchandise in reserve so that they respond powerfully to local needs and customer orders. This brings into focus the efficiency of storing and retrieving goods at distribution points—fundamental capability to many warehouse management systems. Back in the 20th century, data integration to such a system was a straight-forward load of information from product and location tables. But now, the integration is far more complex and dynamic. You need robust customer data, product demand, picking velocity, pricing variability, etc.
You might find it unusual that we place “Pricing” in the RIGHT PLACE section. Our thinking is that often the retail price is a function of product destination and timing. This is especially true for multi-national retailers and retailers running their own clearance stores. In any case, this also requires you to rethink how you integrate retail price data with the where and when of the supply chain.
Associates are linked to the place of destination. Especially for new merchandise, associates need to have robust product information at their fingertips. Every product has a story and clear role in its assortment. Every customer-facing associate-whether call center, store, or online-must have access and be able to drill down when answering detailed questions about specification, product care, customer review, or competitive advantage. All this comes with the integration of product information with destination workstation.
You’re now into part four of our six part series on supply chain touchpoints. Be sure to check out our previous blogs about the RIGHT PRODUCT, RIGHT QUANTITY or the overall model, if you missed them. Next up is the RIGHT TIME.