If there is one absolute requirement for retail success in this digital age, it is data integration. Your information systems cannot be insular and self-contained. Everything you do for your customers is part of an integrated process. Sometimes it is not feasible to integrate all your systems, but integrating your data is another story. If your data is not well integrated, you can’t fulfill your customer promises and you won’t attain competitive advantage. Only integrated retailers will achieve “integrated commerce.”
To help the industry give integration the attention it deserves, in the past year the RIBA Insider has addressed two critical areas: Back Office systems and Customer Touchpoints. With this blog and the five to follow, we landscape Supply Chain Touchpoints.
If your retail organization is competing with today’s most successful retailers, your major challenge is to match their supply chain skills. At their scale, Amazon and Walmart leverage their buying power at every feasible supply chain touchpoint. You can’t match their volume. But you can, we are convinced, match them in integrated information flow. And ultimately, you will realize competitive advantage when you know more about your business than your competitors knows about their businesses, no matter their size. But this is a big integration challenge.
Getting it “RIGHT.”
How many times have we heard the retail problem statement as it was understood by 20th century retailers? Get the right merchandise to the right place, at the right price and at the right time. But thanks to the disruptive power of digital commerce, today’s unified retailers must also solve the problem of right cost, experience, channel and message. All to get to the right customer!
Addressing this expanded problem statement requires a whole new level of command, only available through system integration. You must look beyond the vendor purchase order and into the supply chain steps that the PO triggers. Each touchpoint has the potential to add customer value.
SUPPLY CHAIN LANDSCAPE
The graphic below identifies the primary process that engages retailers and their suppliers. Most smaller retailers have no visibility to these processes, or they isolate them in highly fragmented systems.
Invisibility leads to ignorance. Isolation leads to multiple versions of the truth. In the blogs which follow, we’ll identify opportunities where more formalized information flows will add value for your shoppers and shareholders.
BREAKING DOWN SUPPLY CHAIN TOUCHPOINTS
Here the five subject areas:
1. Right Product.
We’ll investigate Sourcing, Product Information, Product Life Cycle Management, Content Management, and Design and Manufacturing.
2. Right Quantity.
There are twelve often-disjointed steps that address the problem of “right quantity”: assortment planning, inventory, quality control, receiving, demand forecast, space planning, pack size, allocation, size optimization, channel allocation, product, and replenishment.
3. Right Place.
Eight touchpoints, or processes, help bring the right product to the right place including local assortment management, pricing, compliance, routing, shipping, associate preparation, inter-store transfers, and storage.
4. Right Time.
Eight more play a role in the time dimensions including product launch, programmed shipments, status checking, expediting, distributed order management, scheduling, logistics, and picking/packing.
5. Right Cost.
Finally, eight supply chain touchpoints determine cost at the level necessary to effect change: accounts payable, insurance, landed cost, freight, customs, broker, discrepancy management, logistics, and reverse auction.
We look forward to your comments and feedback on the topic of Supply Chain Touchpoints.