Retailers MUST improve their forecast engines to bring this cycle of over- and under-stocks under control
MIAMI (PRWEB) December 13, 2018
Retail Systems Research, LLC today released its findings from its 2018 Supply Chain Management Benchmark Report, Supply Chain Management 2018: In Service Of The Customer. The report, based on a survey of 96 retailers, found that while average and under-performing retailers continue to see their profits erode from new costs associated with omnichannel customer order fulfillment, over-performing retailers are investing to invest in supply chain improvements. The research is available for free download (registration required).
"Retailers MUST improve their forecast engines to bring this cycle of over- and under-stocks under control," reports Paula Rosenblum, managing partner at RSR Research and co-author of the report. "In the retail industry, this should not be a supply chain problem. It’s a problem that belongs to the merchandising group, and supply chain personnel are often left to clean up a mess not of their own making.”
Key Findings of the research:
- Pressure from competitors to improve fulfillment to consumers is the most frequently cited business challenge, closely followed by the changes in consumer demand patterns. Of course the perennial problem of stocking out on fast-movers and having too much inventory of slow-movers continues as well. It’s clear that this will only improve as retailers replace or hone their forecast engines. With more chaotic demand patterns, more sophisticated tools to determine supply are a must.
- Retail Winners see many opportunities to improve their supply chain management, most especially by collaborating with suppliers. Non-winners are pinning their hopes on better forecasting processes. Having said that, the survey results tell us that while they talk the walk, they really aren’t walking the walk. Winners are far ahead in using new types of data to hone their forecasts. Non-winners are thinking about it. And Supply Chain visibility remains an untapped opportunity for all retailers, from the most basic (when is product arriving?) to the most sophisticated (visibility into vendor dropship inventory.
- Most retailers don’t have a clear picture of the costs associated with cross-channel shipments, but only Retail Winners (over-performers) are taking concrete steps to improve that visibility.
- The problem of understanding the chaotic nature of demand generation vs. fulfillment continues to befuddle many retailers. While retailers have made significant strides in improving the “last mile” of customer delivery, they clearly have a very long way to go to optimize those improvements.
Supply Chain Management 2018: In Service Of The Customer contains analysis of the business drivers, opportunities, and organizational constraints surrounding how retailers are approaching the new demands put of their supply chain by consumers’ omnichannel shopping behaviors and the fulfillment challenges that result. It also examines retailers’ budgets and plans for technologies, and ultimately offers baseline recommendations for navigating this brave new world for retailers. The report is part of RSR Research's ongoing efforts to provide market intelligence on retail technology trends, is sponsored by Symphony RetailAI, and can be downloaded here:
About RSR Research: Retail Systems Research (“RSR”) is the only research company run by retailers for the retail industry. RSR provides insight into business and technology challenges facing the extended retail industry, and thought leadership and advice on navigating these challenges for specific companies and the industry at large. To learn more about RSR, visit http://www.rsrresearch.com.
RSR Research, LLC
Linda Wolfe, 774-284-4679