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Managing the Supply Chain in a 50:50 World

Apr 20, 2016 2 min

The pace of change in retail is accelerating fast. Every consultant is preaching omni-channel. Most retailers have realized that the only growth is coming from online. The pressure on high street stores has increased.

However, let’s keep our feet on the ground and not throw in the towel to online business. As the term suggests omni-channel encompasses all channels to the customer and a retailer needs to focus on delivering a single, truly world-class experience to the customer whichever channel they choose.

For supply chain managers this means developing the capability to handle seamlessly any and all routes to the customer and, very importantly, back from the customer!

Never has it been more essential to have the right technology to be able to manage this additional complexity. Unless the retailer is going to employ a cast of thousands they will need to be able to automate the norm and react fast to the exceptional. It also requires the ability to plan well, understand how exceptions may change the status quo and be flexible enough to deliver effective supply chain and logistical support for initiatives created by the buying, marketing and trading teams.

If you are constantly fire-fighting to stay on top of your business today then you have little chance of staying afloat in the world of tomorrow. That world is fast becoming one where 50% of your business is online, increasingly through mobile technology. What is also clear now is that to invest all your technology spend in online capability leaves a company very vulnerable. The store remains a very important part of the equation. Customer expectations are higher because they know they can buy online. At the same time the store is the physical manifestation of the image and brand the company has created with its online presence.

The reality that online retailing is more costly than store based retailing is becoming better understood, free delivery is not a sustainable option for most and nor is click and collect, that is why John Lewis, one of the best omni- channel references, has recently changed its policy. Add to this the additional cost of returns through an already tough supply chain and you start to add significant costs to your business.

Being able to forecast and model the various scenarios, understand what is possible and what is not, and know where the critical capacity issues will occur, can be of immense value. RELEX not only enables planning and scenario building that gives better insights into the options available to you, but it can also be used to understand how the cost implications will affect your business.

Written by

Andrew Blatherwick

Chairman Emeritus and Advisor