Research indicates 63% of retail industry supply chain managers cite their top business issue as increasing availability without increasing stockholding.
The UK’s retail industry’s supply chain research study: ‘The State of the Retail Supply Chain 2015’, conducted by research firm Martec International and commissioned by international supply chain solutions provider RELEX Solutions is published today, highlighting the key priorities for supply chain managers in today’s omni-channel retail environment.
The research saw UK retailers with sales exceeding £100 million interviewed, whose combined sales account for 23% of the UK retail market.*
The findings include:
- The top business issue regarding supply chain planning and execution is increasing availability without increasing stockholding – highlighted by 63%.
- The top challenges regarding forecasting are forecasting demand for new products (72%), coping with changes in the rate of sale (69%) and forecasting effectively for promotions and promotional lift (66%).
- 28% of retailers have no systems to support their forecasting processes, maintaining reliance on spreadsheets. Whilst the average age of all forecasting and replenishment systems, for those retailers who do have them, is 10.5 years.
Fran Riseley, Deputy Managing Director, Martec International comments: “The RELEX research indicates quite clearly that the average UK retailer has established a ‘standard’ level of automation within their supply chain planning and execution. These retailers have started to automate, but many retain a number of basic, manual processes and systems in the business. There is variable visibility of the supply chain and some basic supplier collaboration and monitoring. Stock holding can be high and is not optimised across all sales channels.”
“The RELEX research indicates quite clearly that the average UK retailer has established a ‘standard’ level of automation within their supply chain planning and execution.”
Mikko Kärkkäinen, Group CEO, RELEX Solutions, adds: “If it’s historically been difficult to manage product launches, promotions, seasons and short-life-cycle items, then the growth in the number of channels over current years has simply acted as a multiplier on existing challenges, not least those around forecasting and replenishment.”
“Whilst there is a growing recognition amongst retailers that technology and automation can address some of these issues, the research clearly highlights that for most, current processes and technology are not supporting supply chain efficiencies optimally.”
“Current processes and technology are not supporting supply chain efficiencies optimally.”
“However, the latest generation of supply chain technology, which combines the benefits of in-memory computing with the flexibility of the Software-as-a-Service model, provides retailers with very fast access to highly granular data, and enables them to get not only a good picture of past sales but also a remarkably good prediction of future sales, availability and likely wastage – by store, store-group, product, product-category etc. In doing so, they can increase availability, reduce inventory, and cut spoilage whilst improving customer experience – and achieve this quickly and cost effectively.”
*Statistics based on 2013 retail sales of £321 billion, British Retail Consortium