Retailers Waste Millions in non-Merchandising Supply Chains

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While retailers have invested vast sums of money, time, and expertise in improving their retail supply chains, most do not act to improve their performance in managing their supply chains for all their non-saleable products or store supporting services. The result is millions of pounds wasted in this process, which is key to the store performance for promotions and seasonal sales. This is the view, based on real experience with clients, of Phil Hall, of SCALA Logistics Consulting.

While retailers have invested vast sums of money, time, and expertise in improving their retail supply chains, most do not act to improve their performance in managing their supply chains for all their non-saleable products or store supporting services. The result is millions of pounds wasted in this process, which is key to the store performance for promotions and seasonal sales. This is the view, based on real experience with clients, of Phil Hall, of SCALA Logistics Consulting.

Mr Hall, the senior consultant responsible for the non-merchandise supply chain practice at SCALA, believes that this is a sadly neglected area and many retailers are wasting large sums of money because they do not focus on this area of their business.

Areas for consideration are the "essential to trading" products and services that facilitate an effective economic supply to enable to following;

  • New Store Openings
  • Seasonal changes
  • Range Reviews
  • Sales Promotions
  • Merchandising
  • Store Closures - Re-locations
  • Day to Day Store Consumable Supply
  • Returns Processing
  • Waste Disposal and Recycling
  • Legislation - WEEE and H&S

"In many cases, this part of a typical supply chain (Stock, Equipment, People, Transport and Warehousing) is left entirely in the hands of the purchasing teams, property managers or merchandising departments. These people are experts in their own field but probably do not have the time to construct a resilient cost driven solution to this area. The approach in most retailers is very 'Silo and vertical' and no-one takes overall responsibility to measure the true cost of supply," Mr Hall said. "The result is inefficiencies and wasted money. This also leads to extended lead times, over stocks, un-necessary capital outlay, process duplication, inaccuracies and very poor service delivery performance."

There are three main areas where retailers can improve their performance, the first being in performance at the store level. "It is important to achieve speed of execution in seasonal store changes and fixture positioning, tied into the execution of national roll outs and range reviews. Tied into this is being confident of provision of the supply of display equipment and accuracy in ordering the correct fixtures," Mr Hall told us. "It is also important to co-ordinate promotional and seasonal events and planning."

Secondly, there are great savings to be made in removing supply chain costs. This involves network integration, equipment and fixture stock integrity; and supplier consolidation and collaboration.

Finally, it is essential to maximise asset utilisation by controlling and re-cycling store returns, including refurbishing fixtures rather than just replacing them. "The return of fixtures to suppliers and ensuring cash generation disposal is also very important," Mr Hall commented.

"Most retailers have inefficiencies in their non-merchandising supply chains which they would not tolerate in their retail supply chain," Mr Hall believes. "With co-ordination and planning, major benefits and savings can be achieved."

Phil Hall has vast experience of non-merchandise supply chains gained both through management roles with Hays and Wincanton and over the last two years as a consultant. He has worked extensively with a number of major retailers and focuses on stripping out costs of supply and providing reliable and resilient end-to-end organisation incorporating suppliers, logistic providers, installation and merchandising.

For more information call 01484 422084 or e-mail phil.hall@scalagroup.co.uk

For more information on this article contact:
Denis O'Sullivan, Networked World
denis_osullivan@btopenworld.com
07710-820979

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