New Paradigm Shift for Suppliers and Retailers
In today’s fast-moving, ultra-competitive markets, the ability to manage products across multiple channels and the entire product lifecycle becomes essential to maintaining profitability and competitiveness. I believe companies now face a host of new business challenges, including increased service level expectations from retailers, shorter product life cycles, and heightened cost pressures from increasing global competitors. To thrive, companies must have the ability to synchronize their demand and supply plans to that of their customers – especially now when critical-mass retailers have more influence than ever over manufacturing supply chain planning.
Supplier and retailer trading partners need to effectively collaborate at the shelf level to improve on on-self availability, remove unnecessary inventory across enterprises and set new strategies that leverage cost savings across the entire value chain. Collaborating at the shelf also allows retail and manufacturing partners to move away from one sided metrics like sell-to and establish mutually beneficial metrics such as sell-through. This simple shift in metrics can eliminate poor behavior, like stuffing the channel, but is only possible through close collaboration and the sharing of enterprise supply chain data, like inventory and POS.
Some of the benefits to this type of collaboration that I see are:
• Quickly diagnose execution problems like out of stocks, stock in the back room and not the shelf and promotions that are not set up by centrally analyzing the data, enabling the manufacturer and retailer to take immediate action to remedy the situation
• Early alignment between retailer and manufacturer on the demand plan, allowing supply to be matched and business objectives to be aligned
• Understand the impact of decisions, in near real time, on store sales and financial results for the manufacturer and retailer alike
I was recently interviewed by Cindy Kim, our director of social media marketing, at FOCUS 2012 on the value of connecting manufacturers to the shelf. Take a listen. For more information, check out JDA Shelf-Connected Cloud.