Leveraging Supply Chain Execution Strategies

An effective supply chain requires the sharing of business data between and among all parties — the retailer, the vendors and the logistics partners. For the most part, it’s not so clean-cut since most vendors and retailers have differing policies, systems and desire or willingness to share certain information.

The best supply chain execution (SCE) strategy opens up both operations through the sharing or co-creation of forecasts, sales data and real-time inventory statuses. Many of Jesta I.S.’ clients leverage vendor managed inventory (VMI) with their more strategic partners, while others take advantage of the Vision SCM (supply chain management) platform integrated into Jesta I.S.’ Vision wholesale and retail solutions, which provide visibility in the supply chain.

Out-of-stocks and customer service levels go hand in hand. The ability to order or transfer an item to satisfy a customer request, be it delivered to her home or sent to or from another store or warehouse, results in improved customer satisfaction levels.

Stock-outs, excess inventory
Retailers are taking innovative steps to reduce stock-outs and make customer service a major part of their brand strategy. The first step to improving on-shelf availability is to understand that, while out-of-stocks are an enormous pain point, they are only part of a larger problem. This supply chain problem has two sides — stock-outs and excess inventory. It is of limited value to eliminate stock-outs at the expense of ballooning inventories.

A solid SCE strategy, coupled with the right technology infrastructure, enables retailers to define and measure on-shelf availability performance at the store and SKU levels on a daily basis, which aids in boosting customer service levels. When performance deviates from satisfactory thresholds, a trigger or alert to take action is required to resolve the problem.

These alerts are flexible and can be based on user-defined thresholds; to be effective, however, alerts must be set up to foresee and eliminate bottlenecks in the supply chain early, before they impact the customer. Improving out-of-stock performance requires that users identify and understand the root causes that drive out-of-stocks.

Collaboration in the supply chain enables all internal and external partners to view the same information in perspective. As a result, the appropriate decision-makers have access to actionable information in order to address potential out-of-stock issues collaboratively before they worsen, eliminate out-of-stock variability and drive accountability throughout the extended enterprise.

By integrating additional users across the supply chain into one supply chain management system, accountability improves over time and everyone begins pushing in the same direction to achieve higher on-shelf availability. With more timely, granular and correlated data, users can take actions quickly and with confidence.

Measure, monitor, maintain
For retailers to continue to grow and maintain their customer base, they must improve their customer service levels and breed new loyal customers. The retailers that will prosper in these challenging times are those that are able to reduce out-of-stocks.

Retailers continue to struggle with supply chain management technologies: the biggest challenge they face is user adoption as they attempt to mandate that employees and partners comply with their new processes. Just managing users and user-rights can be a challenge.

Jesta I.S. has taken great strides to improve the ease of integration and ease of maintenance for its clients. Not only are SCM technologies essential to an organization’s visibility but they are a means to measure, monitor and maintain vendor quality, environmental/social conditions, vendor bidding events, workflow management, order status at every step and much more. With an effective supply chain execution strategy backed by an SCM system, the sky truly is the limit.