De la concedierea șocată a managerului lui Leicester, Ranieri până la angajarea controversată a lui Jose Mourinho la Manchester United, în industria fotbalului nu este un lucru străin să schimbe brusc conducerea. Cu toate acestea, se pare că echipele majore de fotbal ar putea avea concurență pentru titlul de cifră de afaceri cea mai ridicată. Potrivit rapoartelor, numărul directorilor șefilor de retail care își părăsesc funcțiile a atins un maxim de 5 ani! Întrebarea este: ce impact are această tulburare a conducerii cu amănuntul asupra afacerilor mai largi?
În sezonul de fotbal 2017/2018 s-au înregistrat deja o serie de numiri de conducere cu profil înalt. Inevitabil, cu o nouă conducere, vine o nouă direcție. Deși un nou stil de conducere poate fi un moment interesant pentru o organizație, acesta nu este întotdeauna cazul. Trebuie doar să vă uitați la palmaresul de management al Birmingham City pentru a aprecia că schimbarea nu este întotdeauna pozitivă! Având în vedere numărul de noi întâlniri în comerțul cu amănuntul, este important ca noii lideri de retail să evite capcanele de management făcute de atâtea cluburi de fotbal. Având în vedere acest lucru, ce pot învăța noile recrutări manageriale de la alte întreprinderi cu un palmares de conducere eficientă cu amănuntul?
Impactul asupra schimbări jocului cu un nou lider în vânzarea cu amănuntul
Așa cum se subliniază în Gazeta cu amănuntul: „Tăierea și schimbarea leadershipului afectează în mod direct performanța comercianților cu amănuntul din Marea Britanie.” Cu atât de multe schimbări în conducerea cu amănuntul, multe companii se află acum într-o stare de incertitudine; o poziție cu care multe echipe de fotbal de top sunt familiare!
Având în vedere că retailerii se angajează din ce în ce mai mult în proiecte de transformare din ce în ce mai ambițioase, această tendință emergentă în conducerea retailului are un impact extrem de nociv atât asupra satisfacției clienților, cât și a competitivității pieței. Pe măsură ce noii manageri de nivel C se alătură afacerii, își aduc propriile idei și viziune. Cu toate acestea, cu un termen din ce în ce mai scurt în sarcină, multe dintre proiectele de transformare pe care le implementează nu sunt văzute niciodată până la finalizare.
Datorită faptului că operațiunile și departamentele supply chain-ului au lăsat adesea suferința schimbărilor în conducerea vânzărilor cu amănuntul, impactul noului management poate fi foarte repede simțit de afaceri și chiar de clienți. Deci, ce pot lua noii lideri de la cele mai de succes cluburi de fotbal și mărci de vânzare cu amănuntul din Marea Britanie pentru a se asigura că fac o diferență reală pozitivă?
O formație câștigătoare pentru conducerea retailului
Există o mulțime de exemple de lideri de retail care au luat măsuri îndrăznețe pentru a asigura succesul afacerii lor. Dar cum își concentrează acești lideri timpul, energia și atenția pentru a asigura succesul?
Cu peste 15 ani de experiență, am avut plăcerea de a lucra alături de numeroase personaje din industrie. Cu toate acestea, cei mai eficienți lideri în vânzarea cu amănuntul prezintă întotdeauna 3 calități cheie de conducere:
- Un angajament de a dezvolta și de a deveni talentat
- Abilitatea de a pune bazele în funcție pentru a permite întregii echipe să prospere
- O gândire de perspectivă
A investi în talent și în viitor este întotdeauna un plan de joc solid
Cluburile de fotbal primesc adesea critici grele pentru că cheltuiesc sume obscene de bani pe jucători. Cu toate acestea, fiecare manager de fotbal știe că nu puteți cumpăra doar succes: trebuie să îl dezvoltați. Având în vedere complexitatea retailului, dezvoltarea talentelor este la fel de crucială. Până la urmă, în orice poziție de conducere cu amănuntul, construirea unei echipe cu oamenii potriviți și experiență este esențială!
Când vine vorba de gestionarea supply chain-ului cu amănuntul, cunoștințele diferențiază într-adevăr întreprinderile. Aveți, de exemplu, retailerul de sănătate și frumusețe, Savers. Conform Sunday Times, retailerul high street oferă acum tuturor managerilor și personalului central o aplicație pentru a-și avansa abilitățile. Având în vedere că retailerul este pe locul 10 în topul celor mai bune companii mari de la Sunday Times, această investiție în dezvoltarea personală a fost în mod evident plătită. Ajutând retailerul să realizeze o creștere a cifrei de afaceri de 55 de milioane de lire sterline în timp ce oferă un impuls imens moralului echipei, formarea și succesul dezvoltării la Savers este ceva ce trebuie să observe toți noii lideri de retail!
Nu există nicio substituție pentru un sortiment echilibrat
Fiecare echipă de fotbal de succes are un jucător deosebit. În timp ce foștii campioni Leicester City se bazează pe obiectivele lui Vardy, De Bruyne este arma aleasă pentru actualii lideri de masă, Manchester City. Indiferent de talentul individual al unui jucător, performanța echipei este influențată de fiecare jucător pe teren. La urma urmei, chiar dacă jucătorul de top înscrie un hat trick în fiecare săptămână, echipa nu va câștiga niciodată liga dacă toți apărătorii se transformă în marcarea propriilor goluri.
Retailerii se confruntă cu o paradigmă similară în ceea ce privește gestionarea sortimentelor. Fiecare retailer are o categorie sau un produs cu cel mai bine vândut, totuși produsele cu cele mai slabe performanțe pot încă să împiedice performanța întregului sortiment!
Când considerați că clienții se așteaptă ca retailerii să investească constant în gama de produse, acesta este un domeniu important în care să câștige câteva puncte de loialitate a clienților. Dacă sortimentul este gestionat în mod eficient, acest lucru, la rândul său, poate duce la o creștere uriașă a rentabilității. Luați, de exemplu, retailerul specializat de alimente congelate, Islanda. În urma unei investiții de 2 milioane de lire sterline într-o bucătărie de dezvoltare modernă, retailerul a trecut de la putere la forță. Prin inovarea constantă a sortimentului lor, retailerul alimentar a câștigat, prin urmare, numeroase premii, inclusiv premiul extrem de convertit al industriei de retail pentru realizări deosebite.
În timp ce îmbunătățirea produselor și introducerea de noi linii este importantă, liderii de vânzare cu amănuntul eficienți știu și când este timpul să vă îndepărtați de un produs. Trebuie doar să te uiți la reducătorii cu cele mai bune performanțe pentru a vedea cum raționalizarea sortimentului de produse poate parcurge un drum lung pentru a scăpa de povara financiară de a încerca să ofere sortimente masive.
Dintr-o perspectivă de conducere cu amănuntul, gestionarea eficientă a sortimentelor se referă la punerea bazelor în funcție pentru a permite cumpărătorilor și merchandiserilor să ia decizii dure în medii incredibil de dinamice.
Liderii de vânzare cu amănuntul eficienți sunt întotdeauna la balon
Dacă te uiți la cei mai buni manageri de fotbal din toate timpurile, este clar că fiecare manager din această listă are două lucruri în comun: viziunea și direcția. Cu toate acestea, aceste trăsături de personalitate nu garantează succesul. Luați, de exemplu, managerul Arsenalului, Wenger. În ciuda atenției sale, cel mai îndelungat manager de prim-ministru a fost supus unui control din ce în ce mai mare din partea fanilor pentru rezultatele aparent „mediocre” ale cluburilor.
Clienții cu amănuntul sunt mult mai vicleni decât fanii fotbalului. Astfel, atunci când vine vorba de conducere cu amănuntul, managerii eficienți nu numai că trebuie să aibă focus și viziune, trebuie să fie, de asemenea, incredibil de dinamici.
Problema pentru mulți comercianți cu amănuntul este însă că există multe distrageri strategice de urmat. De la noi programe interesante de lansare a magazinelor până la construirea de canale noi, potențialele rute spre succes pot fi numeroase. Cu toate acestea, ceea ce îi diferențiază pe cei mai eficienți lideri este capacitatea lor de a-și concentra atenția acolo unde pot face cea mai mare diferență.
Aldi și Lidl sunt ambele exemple excelente ale afacerilor care au aceste calități de conducere cu amănuntul. În ciuda creșterii rapide a acestora în Marea Britanie, liderii acestor afaceri au rămas fideli față de ceea ce s-a dovedit încă odată a fi o formulă câștigătoare de vânzare cu amănuntul. Cu toate acestea, niciun fel de afaceri nu a permis stagnarea operațiunii lor. Prin investiții și perfecționări continue, operarea ambilor comercianți este la fel de lină ca întotdeauna. În cele din urmă, atunci când vine vorba de leadershipul de vânzare cu amănuntul, ambele companii stabilesc standardul.
Când vine vorba de conducerea retailerilor, toată lumea este un pundit
În timp ce acestea sunt trăsături la care am asistat din vremea mea lucrând cu comercianții de retail, există multe școli de gândire cu privire la modul de a conduce cel mai bine o afacere de vânzare cu amănuntul. Având în vedere acest aspect, ce caracteristici considerați că sunt cele mai importante pentru a asigura un leadership eficient al vânzărilor?
În industria vânzărilor cu amănuntul, planificarea cererii de modă este esențială pentru a obține creșterea. Cu toate acestea, atunci când considerați că un mare retailer ar putea avea în vedere deja închiderea magazinelor și mulți alții încă se recuperează de la provocările prezentate în ultimele 12 luni, vorbind despre 2018 ca „anul creșterii”, pare probabil un concept absurd. La urma urmei, dacă credeți tot ce ați citit în știri, singura concluzie pe care o puteți trage este că lumea retailului este într-un turbulent complet!
Realitatea este însă foarte diferită: Există oportunități imense de creștere, retailerii trebuie doar să fie suficient de curajoși pentru a-i apuca.
Creșterea niciodată nu va ieși din modă
Faptul că retailerii nu pot sta nemișcați în lumea dinamică de astăzi este probabil unul dintre cele mai obosite clișee din jur. Cu toate acestea, nu ar putea fi mai adevărat. La urma urmei, retailerii de modă s-au lăsat pozitivi după ce un impuls uriaș în vânzările online de Crăciun, alături de faptul că anul 2018 a fost deja înclinat ca an al „renașterii de retail”, există o mulțime de vânzători cu amănuntul.
Cu toate acestea, cu clienții care insistă pe investiții continue și grele în cele mai recente aspecte și stiluri, comercianții cu amănuntul își reduc lucrurile pentru a-și păstra aspectele proaspete pentru anotimpurile viitoare. În plus, având în vedere cât de mare este miza astăzi pentru investitori și proprietari, aceștia se așteaptă tot mai mult de la companiile de retail pe care le finanțează. Singura supraviețuire nu este suficientă: comercianții trebuie să crească pentru a menține pasul.
Optimizează-ți abordarea modei planficând cererea
Pentru a vă ajuta să vă atingeți potențialul de creștere, experții noștri de retail, Mike Donnelly și Will Severn, au întocmit un simplu ghid pentru a ajuta retailerii să depășească obstacolele de planificare a cererii de modă care le revin. Completați formularul de mai jos și descoperiți cum vă puteți optimiza abordarea privind previziunea, alocarea și reînnoirea!
Realizarea creșterii este adesea mai ușor spus decât făcut. La urma urmei, creșterea nu vine fără riscuri. Chiar dacă un vânzător cu amănuntul este în măsură să depășească creșterea complexității și o încordare mai mare asupra capitalului de rulaj plasat, întreaga operațiune este probabil să fie mai expusă la riscul de marcare. Numai acest factor poate să anuleze oricare dintre beneficiile prețului de cost negociat care vin cu vânzarea unui volum mai mare. Pe scurt, dacă retailerii vor să crească, trebuie să stabilească mai întâi bazele corecte. Deci, cum pot retailerii să depășească aceste obstacole pentru a-și realiza obiectivele de creștere?
Descarcă ghidul nostru pentru o mai bună planificare a cererii de modă
Pentru a vă ajuta să vă atingeți potențialul de creștere, experții noștri de retail, Mike Donnelly și Will Severn, au întocmit un simplu ghid pentru a ajuta retailerii să depășească obstacolele de planificare a cererii de modă care le revin. Completați formularul de mai jos și descoperiți cum vă puteți optimiza abordarea privind prognoza, alocarea și reînnoirea!
Inspired by team GB’s triumph in the last few years, more and more of us are getting back on the saddle. In fact, according to British Cycling, we are now one of the most successful cycling nations in the world. However, as Brexit jitters grip the cycling industry and the value of the pound continues to plunge forcing up the cost of imports, for cycling wholesalers and distributors, the next 12 months could be a real uphill struggle. How can businesses manage the supply hurdles that lie ahead in order to keep pace with evolving customer demand?
While the UK is Europe’s second largest market in terms of bicycle sales, British-based distributors are hugely dependant on global suppliers. Given that a staggering 95% of all bikes in the UK are imported from abroad, it seems that the fall in the value of the pound has already started to have an impact on businesses. While imports are anticipated to decrease by as much as 11% in the coming months as bicycle distributors feel the pinch of increasing supply chain costs, supply issues are not the only challenge faced by the industry. Although demand for bikes and accessories remains strong, it seems consumers are shifting towards more premium products as well as new technologies such as electric bicycles.
The question for businesses now is how they can protect their operations from the impact of external factors such as Brexit and currency fluctuations while still exploiting the full value of a buoyant bicycle market in the UK?
Assortment management: have you over-inflated your assortment?
Once upon on a time, bicycle wholesalers distributed just that: bikes! If you look at any of the major distributors today, however, it is evident that this is no longer the case. In an attempt to stay ahead of the market, many wholesalers not only offer an extensive range of bicycles but also a huge variety of parts, accessories, and clothing. While managing all these different products groups is a challenge in its self, businesses must also cater for the growing number of different consumer groups each with their own specific requirements and expectations.
While this approach enables businesses to provide customers with a huge amount of choice, managing such a large number of items brings with it its own range of challenges. Given that every item will be subject to its own individual demand pattern, managing such large assortments places planning teams under a huge amount of time pressure: not to mention leaving the entire organisation exposed to high supply chain costs and crippling cash flow issues.
With many 000s of items to manage, it’s vital that distributors have clear insights into demand history in order to determine which items should be included within the assortments as well as to determine the optimal service levels. However, to do this, supply chain teams must be able to analyse each item quickly and accurately in order to ensure effective decision making across the entire assortment. Through using these insights to automate as much of the inventory management process as possible, supply chain leaders can, in turn, focus their time and attention on items where it is required most.
Product lifecycles: The uphill struggle
To add further complexity, distributors must also keep up with ever-evolving product lifecycles. Given that manufacturers regularly release new and updated product variations as well as entirely new lines, distributors have little choice but to constantly update their portfolio or risk being left behind by the competition. Equally, with so many items within the assortment, at the other end of the product lifecycle, it’s vital that businesses have the ability phase out end-of-life items with minimum disruption and cost to the business. Consequently, achieving the optimal inventory levels for every product at each phase of the product lifecycle is often easier said than done!
Effective Product Lifecycle Management is all about adopting the right strategy for every phase. As a result, it is vital that businesses are able to track how products move through the product lifecycle in order to apply the most suitable approach to inventory management.
Given that poorly managed product lifecycles can result in missed sales opportunity, excess stock and obsolesce, it vital that distributors take steps to stay one step ahead of evolving demand patterns.
Supplier management: keeping everyone on track
For many distributors, much of their inventory is sourced from a broad range of global suppliers. In fact, according to HRMC, some 87% of all bicycle imports are sourced from outside the EU with Asia making up the bulk of the supply! When you consider the sheer distances that these supply chains encompass, managing these supply chain partnerships is a huge challenge for wholesalers and distributors.
With varying lead times, order costs as well as different supplier calendars to contend with, supply chain visibility is essential in harnessing collaborative relationships that are capable of keeping up with the operational demands of the business. Through sharing forecasts, this can go a long way in terms of helping upstream supply chain partners to align their operations in order to meet expected demand. However, in order to collaborate effectively, distributors must be able to generate accurate forecasts which are a true reflection of likely demand. After all, a wobbly forecast really does not help anyone!
Customers: Cycling the supply chain for everyone
A typical bicycle distributor’s customer base may encompass everything from multinational retail chains to webshops and independent stores. Given that purchasing behaviour will differ hugely between different customer groups, it’s important that distributors take this into account when making supply chain decisions.
Take for example, electric bikes: While overall demand for these innovative products is growing, for distributors, this demand could be made up of anything from a huge number small customer orders to just a single big order from one customer. In the latter scenario, managing the expectations of just one customer may sound preferable to managing the needs of many. However, what happens if the customer suddenly decides to abandon the product in question?
With a warehouse full of stock and no other customers to pick up the demand, distributors could unexpectedly be left with a huge amount of excess stock, tying up invaluable working capital and increasing the risk of obsolesce. When you consider that one of the biggest retailers of electric bikes (and consequently, one of the largest buyers of electric bikes) recently took a sudden decision to pull out of the Irish market following legal concerns, this is a very real issue for the industry!
To make informed inventory decisions, distributors must have a complete understanding of demand. However, to do this, planning teams require tools and technologies that take can take into account data at a transactional level in order to accurately distinguish between different customers. With this insight, distributors can align their operations to the “true “demand of their customers. This, in turn, means businesses can focus their investment in stock on the products that matter most to customers while simultaneously mitigating the risk of excess.
Outpace the competition with Slim4
Thanks to the accurate analysis and forecasting capabilities of Slim4, some of the biggest names in cycling have utilised Slimstock's inventory management tool in order to drive the performance of their operations. With greater insight into their inventory situation, distributors and wholesalers become better positioned to make informed inventory management decisions. Thus, enabling supply chain managers to reduce stock levels and inventory costs while simultaneously improving availability to over 97%.
To keep up with continuous growth and spiraling complexity, the UK’s largest distributor of fluid power products, Flowtechnology, has taken an important step towards simplifying their supply chain processes. Already impressed by the results delivered by Slimstock’s inventory management solution, Slim4, the business has now taken the decision to upgrade the bolt-on solution to also enhance the way they manage the components required for their kitting and manufacturing operation.
"When it comes to efficient implementation projects and professional consultancy services, the team at Slimstock have a proven track record"
“Given the continuous growth of our business coupled with the increasingly more challenging expectations of our customers, the complexity of our operation has increased exponentially in recent times,” explains Lucinda Barrow, Supply Chain Manager at Flowtechnology. While the team at Flowtechnology had previously relied on spreadsheets, this was no longer sufficient. Lucinda goes on to explain: “Put simply, we needed a solution that could simplify our processes and provide greater visibility; all while improving the efficiency of our operation.”
For nearly a decade, Flowtechnology have relied upon Slimstock as their partners for inventory management. “Over the years, I am proud to say we have developed a very close relationship with the team at Flowtechnology. As the business goes from strength to strength, we look forward to helping them every step of the way,” explains Richard Evans, Managing Director at Slimstock UK.
Lucinda goes on to add: “When it comes to efficient implementation projects and professional consultancy services, the team at Slimstock have a proven track record. As a result, the decision to upgrade Slim4 to also improve the way we manage our Bill of Materials, was an easy one.”
Now that the Bill of Materials module has been successfully implemented, the team at Flowtechnology are working hard to improve the accuracy of their forecasts in order to optimise both the availability and planning of all components. Lucinda concludes: “Flowtechnology is growing and I am excited to continue this growth with the support of Slim4 and the team of experts at Slimstock.”
If you would like to know more or if you would like discuss opportunities within your company, contact us directly to find out more.
After extensive research into the market, Vegware, the award-winning manufacturer of eco-friendly catering disposables, has this month joined forces with Slimstock to help improve their already impressive availability levels. Following several years of rapid growth, the Edinburgh-based business will take advantage of the inventory management specialists’ solution, Slim4, to help keep up with the demand from both new and existing customers.
As the only manufacturer of completely compostable catering disposables to operate on a global scale, Vegware’s extensive customer base encompasses everything from independent cafes to multinational catering distributors. With a wide range of premium takeaway coffee cups, takeout boxes and food containers, Slimstock will help Vegware improve upon their already exceptional customer service.
Commercial director, Chris Murphy explains: “Vegware is a high-growth business – we have grown in double digits year on year. We already sell to clients in over 25 countries, but we needed a robust system to support our growth ambitions. A reliable insight into future demand is vital to help us meet the evolving needs of our customers”.
With the support of Slimstock’s inventory management solution, the team at Vegware will be able to forecast demand with far greater accuracy to make more informed inventory decisions while the management by exception principles of Slim4, allow the team to proactively manage potential issues before they become a problem.
“After looking at multiple software vendors, Slimstock were the only ones to demonstrate a proven roadmap to success. Furthermore, given their solid relationship with Microsoft Navision, it was obvious that Slimstock are the right partner to help support our continued global growth,” adds Murphy.
If you would like to know more or if you would like discuss opportunities within your company, contact us directly to find out more.
Vegware is a manufacturer and visionary brand, the only completely compostable packaging company operating globally. Our award-winning catering disposables are low carbon, made from renewable or recycled materials, and all can be recycled along with food waste where facilities exist.
Vegware was established in Edinburgh in 2006, and has operational bases in Huntington Beach, Sydney and Hong Kong, with distribution throughout Europe and the Middle East. A globally recognized brand supplying independent cafes through to the world’s largest contract caterers and distributors is testament to quality products at competitive prices.
Notes to Editors:
Bicycle production in the UK has undergone a resurgence in recent years. Since 2007, output has more than doubled and in the last year alone, exports have increased by an impressive 13%. However, UK-based manufacturers have a lot of work to do before they can compete with the Far Eastern powerhouses that dominate the industry. So how can British brands break away from the competition to exploit the accelerating growth in the market?
Boosted by the current buoyant market conditions, all of the major bicycle brands have recently announced plans to achieve substantial growth over the next few years. However, while the current weak pound may have helped manufacturers to increase both output and exports, the good times can not last forever. With Brexit looming, businesses must take steps now to ensure their operation are able to attack the growth opportunities that lie ahead.
The question is, what challenges should manufacturers prioritise in order to get ahead of the pack?
Forecasting: maintaining a well-oiled chain
From hubs and spokes to nuts and bolts, even the most basic of bikes are comprised of a vast number of components. While some components are unique to particular products, others are shared across a broad number of products. To add further complexity, consumption rates, minimum order quantities, supplier reliability and most importantly, lead times will differ for each raw and semi-finished component. Consequently, supply chain team’s face a huge challenge in ensuring that every item is available when required!
Regardless of whether a business operates in a make-to-order or a make-to-stock environment, supply chain teams depend on accurate forecasts in order to determine which products to buy in what quantity. Without this insight, operations can quickly become inundated with excess stock as the business invests precision working capital into components and finished goods that simply not required. Or, worse still, the whole operation could become subjected to bottlenecks and delays as the items that are required to meet customer demand are simply not available!
By putting in place tools that enable accurate forecasting, manufacturers can develop robust demand plans which in turn can be used to underpin the entire manufacturing operation. With this additional visibility, supply chain teams can ensure that both the right products are being made but also that all of the required components are ordered at the right time in the optimal quantity.
S&OP: it’s a team sport
When it comes to exploiting growth opportunities, it is evitable that there will always be a degree of risk. After all, to satisfy additional demand, there will be a greater requirement for raw materials, semi-finished components and even finished goods: all of which require investment and tie up invaluable working capital!
However, each business division is likely to have a very different opinion on how this risk should be managed. For example, with the potential to win new customers, sales teams will most likely demand a big investment to ensure that the manufacturer’s operations can keep up with demand. However, on the other hand, finance teams may be more interested in budgetary restraints and thus preventing any financial fallout in the event that growth fails to materialise will be a bigger a priority. Operational and supply chain teams have the difficult task of balancing these perspectives.
In order to synchronise key supply chain decisions around product portfolio management, demand planning & sales forecasting, supply planning, inventory & purchase planning, manufacturers must have a well-defined S&OP process in place. However, in order to effectively encompass finance, sales, marketing, and operations teams into the decision-making process, the business must have the required level of knowledge and insight to truly benefit internal collaboration.
Even for the best performing manufacturers, there is always a cap on how much they can actually produce. While the new orders that come with growth will place great strain on operations, by bringing the whole organisation together, a robust S&OP process will ensure everyone is heading in the same direction.
Outpace the competition with Slim4
Thanks to powerful analysis and forecasting capabilities of Slim4, some of the biggest names in cycling have utilised Slimstock's inventory management tool in order to drive the performance of their operations. With a greater overview of the supply chain, OEMs are better positioned to optimise S&OP processes, harness supply chain collaboration and keep stock levels under control. This, in turn, enables supply chain managers to reduce inventory holding and minimise costs while simultaneously maximising service levels and efficiency.
Manufacturers who use Slim4 typically enjoy the following benefits:
- Reduced inventory of raw, part finished & finished good by up to 30%
- Prevent bottle necks through reducing stock-outs by up to 60%
- Greater control over inventory cost
This year, Slimstock took part in the Pimp My Tuk-Tuk (PMTT) Charity ride to raise money for the Foundation of Goodness (FOG). 54 drivers participated in the 8-day drive through Sri Lanka in Tuk-Tuks. Slimstock Operations Director South East Asia, Erik de Witte, shares his experience with us.
Trip of my life
Before starting the trip via PMTT, we had already raised $250,000. With this and funding from previous years, FOG has done some amazing work to improve the livelihood of rural communities.
Starting in Colombo on the 15th of September, we headed via Mihintale to Trincomalee then on to the East coast to Arugambay. In addition to visiting the villages, schools and hospitals, driving in a Tuk-Tuk gave us all the opportunity to capture the beautiful scenery Sri Lanka beholds. From Arugambay, we travelled to Monaragala then down the south coast to Galle, traveling a total distance of 1245 kilometres
During the trip, we stopped off in several different villages to see the water purification plants which had been installed at a cost of $20,000 each. These plants provide clean water as opposed to the heavily contaminated water that the villagers used to consume. They provide clean water to 350 families (1,500 people) in each village. We also visited some of the schools where the children were excited to show us their new bikes they had received to ride to school. Now the children don't have to walk long distances to school anymore.
A closer look at the Foundation of Goodness projects
On the 6th day, we made a stop at the Meth Sewa Home for Special Needs which was an eye-opener. One morning, Niroshan and his wife found a homeless disabled baby on their doorstep. In rural Sri Lanka, taking care of a disabled child can be very challenging and sadly, there is a social stigma attached to these children. Niroshan and his wife took the child in and cared for it with no outside help. Today, they care for 85 children with a variety of special needs. PMTT has taken on the challenge to provide these children with solar powered electricity in order to reduce or even eliminate some of the bills for them.
Centre of Excellence
Another unforgettable part of the trip was our visit at Seenigama, home of FOG’s Centre of Excellence. Here, we met Kushil Gunasekera, who is yet another inspirational Sri Lankan. He founded FOG and gifted the charity the land it stands on. He guided us and brought home the reality of the Tsunami which hit Sri Lanka on the 26th of December 2004. FOG’s Centre of Excellence is a unique rural development initiative delivering 30+ programs including Pre-School, Women’s Enterprise & Empowerment, IT Centre and a Dental & Medical Health Clinic.
Slimstock has been very grateful to be able to sponsor this great initiative. If you would like to find out more information, please feel free to contact Erik de Witte or have a look at PMTT and Foundation of Goodness.
Different times call for different inventory strategies. However, when the function of stock is not clear, changing the inventory approach can often prove problematic. Many retailers lack synergy between the inventory strategy and the overall strategy of the business. As a consequence, many retailers struggle to align the inventory strategy with the strategic focuses of the various divisions that exist within the organisation.
For DIY stores, this is a very real issues: for instance, in recent times, the popularity for younger people to perform basic maintenance tasks on their homes has decreased dramatically. Whereas parents and even grandparents may have been keen home decorators, this trend has drastically reduced. In essence consumers are now spending less time on household chores. As a consequence of this, many people, in particular, young people, do not even own a hammer let alone a toolbox: a trend which would have been unthinkable to older generations. Given the impact this trend will have on demand, how should retailers respond?
The inventory turnover in DIY stores has been declining for a number of years. Today, stock is typically only renewed, two to three times per year meaning that, typically, around 4 to 6 months' worth of stock is held at each location. If you take a rough average, this slow stock rotation means that around a quarter of the stock is not sold.
Furthermore, slow moving stock also causes a number of other operational issue. For example, innovation in planograms can also be stifled as shelf space is taken up with products that customers do not want to buy: a problem only exacerbated further by products with poorly negotiated unit sizes. In addition, if you keep slow moving items available in stores, it is highly likely that you end up marking down a sizable proportion of your starting inventory at the end of the product lifecycle. Given that all of these issues are likely to have an adverse effect on profitability, retailers cannot allow this to happen.
A good omni channel strategy may provide the solution: through offering specific slow movers via the webshop, these articles do not necessarily need to be available in all stores. With this in mind, retailers should differentiate their offering in each store in order to ensure that the range satisfy the local demand and thus the stock position remains healthy.
For many retailers, changing the inventory strategy can prove a tricky and convoluted exercise. The key problem is that each department has its own strategy that is often not well aligned with that of other departments.
For example, the finance team typically want to achieve the lowest possible level of stock in order to limit the amount of working capital tied up in inventory. At the other end of the spectrum, the sales team will gladly extend the range and increase availability in order to reduce the number of missed sales. As a consequence, the supply chain manager is left stuck between a 'rock and a hard place' as they attempt to balance stock levels with service levels.
With this in mind, businesses should revisit the boardroom and formulate a sharper strategy. Based on the overall company strategy, the respective divisions (sales, marketing, and supply chain) all need to develop their own departmental strategy; therefore the supply chain should determine the basis for a strong purchasing and inventory strategy.
A good strategy will prevent supply chain managers form being faced with unrealistic or irrelevant KPIs. For example, if there is a sudden downturn in sales, the finance department will typically demand that stock must be reduced by X percent. However, is this the optimal approach? In reality, the only advantage of this approach is that it is simple and, on the face of it, seems logical.
What makes this puzzle even more complex however, is that the pieces are constantly changing. Consumer behaviour and supply chains are constantly evolving and as a consequence, the retail environment is extremely volatile. Take for instance, Black Friday: not so long ago, this term was largely unheard of outside of the USA. However, today this is a major event for retailers across Europe. Given the speed at which retail landscapes change, retailers need to constantly adapt their inventory and procurement strategy in order to keep up with the demands of the market.
Each sector has its own characteristics which can have a major an influence on the strategic requirements e.g. in the fashion industry, speed and responsiveness are the most important factors. As a results, the first delivery of a new collection (into a store) must be determined through a fair and appropriate allocation which encompasses a size curve that fits the demographics of the respective stores. Thereafter, it is important that stock is replenished in as efficiently as possible e.g. do you send the last XXXL coat size to a store? If it is a 'long-shot' that it will be sold at an individual store; it would probably be better to leave that XXXL coat within the DC in order for it to be ordered via the online channel.
Omni-channel retailing, in reality, means that the online channel supports the retail sales; subsequently life cycle strategies are extremely important and should be automated as much as is possible. If there is only 4 weeks of stock remaining within the DC, replenishment into certain stores should be 'dampened' down.
Through developing a clear and coordinated strategy, retailers can regain control of their operation. Regardless of how the retail environment evolves, this strategic focus will enable retailers to operate as effectively as possible. Furthermore, with clear synergy between the corporate strategy and the supply chain team, retailers can ensure that their inventory strategy keeps up with the pace of the market.
From a major supermarket shortage to why it pays to invest time in your new products introductions, supply chain bloggers, Sam Phipps and Jessie Cooper, explore the hottest topics from the last 7 days.
Customer satisfaction takes a dip amid houmous crisis
As the latest food crisis hit British retailers this week, frustrated shoppers took to social media to complain about the sudden disappearance of houmous. As supermarket shelves lay bare, notices appeared in some stores informing customers that their entire ranges of houmous had been withdrawn due to manufacturing issues. Given that the price of houmous has already gone up by 6% this year alone, the current availability issues have only made matters worse. But what can retailers do to prevent such supply chain disruptions from impacting customer satisfaction?
One potential solution could be to establish more collaborative relationships with suppliers. Through sharing supply chain information, both retailers and suppliers could benefit. For example, retailers may be able to provide suppliers with greater insight into likely customer demand. This, in turn, could enable suppliers to align their operations, ensuring they have enough capacity to satisfy the retailer’s inventory requirement while simultaneously preventing costly waste.
Equally, if suppliers have the means to inform retailers of any potential shortages well in advance, steps can be taken to maximise the value of the stock that is available. Whether this means re-allocating the stock that is available to where it is required most or cutting short a promotion which would only further inflate demand, such actions can help minimise any potential disruption.
On the other hand, it may be beneficial for retailers to have alternative suppliers in place. After all, if the usual supplier is unable to deliver, perhaps another supplier can meet your inventory requirements. However, in practice, this is rarely this simple. For instance: how do the minimum order quantities, lead times and unit costs compare to your usual supplier?
Supply chain shortages are a constant battle for retailers. What has your business done to try and minimise the impact that stock-outs have on customers?
Cashing in on the product lifecycle
As the deadline to spend your paper £5 notes looms, it seems some 150 million old style notes still remain within the public domain. Thus, now is the time to rummage down the back of the sofa!
When you consider how many ATMs’, parking meters & self-service checkouts (just to name a few) are affected by the introduction of a new form of currency, preparing for this switch requires careful planning. Yet, when the new £1 coin was released at the end of March many businesses were simply not ready for the 12-sided replacement. Given that the introduction of a new coin or bank note is the ultimate example of a major product launch, what can we learn from the HM Treasury’s shortcomings?
While a new product development typically marks the start of a product lifecycle for one item, it can often mean the end of the cycle for another. While failing to understand the relationship between predecessor and successor products could prove costly for your business, producing too much or too little new currency could destabilise the entire economy!
Furthermore, in order to achieve a successful product launch, this requires effective communication with customers to ensure they are well prepared to manage any changes. While businesses were given several months’ notice of the new coin design, given the difficulties in gearing up for the changes, was this enough? With this in mind, in advance of any major product launch, there could be real value in enabling key customers the opportunity to voice any concerns and plan the product introduction accordingly.
As events go, things don’t get much bigger than the infamous Glastonbury Festival. Given that over 200,000 people attended this year alone, Glastonbury is a real success story. However, the popularity of Worthy Farm and lucky artists that get to play there is no happy accident: this event takes years of diligent planning!
From the beer sold in the vast variety of pop-up bars to the nuts & bolts that hold together the stages on which artists entertain their audience, music festivals are a meeting point where literally thousands of supply chains collide. In order to ensure that everyone enjoys a truly magical time, every element has to come together. After all, imagine how a shortage of beer or burgers would affect your festival experience: you would certainly think twice about going again!
When it comes to meeting customer expectations, businesses are no different: everything has to be in the right place at the right time. However, unlike festivals such as Glastonbury which occur only once every year (unless it’s a fallow year of course), businesses must be able to consistently meet customer demand on a day to day basis. So, what can you do to ensure that your organisation is able to provide customers with a Glastonbury standard of service?
Customer experience is all about service levels
In a perfect world, you would be able to satisfy the demand of your customers 100% of the time. However, in reality, this simply is not achievable. After all, there are always financial constraints in place which mean that a decision has to be made as for where the resources that are available should be focused.
In the same way that the organisers of Glastonbury may prioritise the availability of beer over the availability of gin & tonic, businesses too must determine an appropriate service level strategy.
Sounding out suitable services levels
When trying to adopt appropriate service levels, the criteria required to make this decision can often be unclear. Consequently, service level targets are often set as a given figure based on little more than a quick and vague analysis. To add further difficulty, service levels are difficult to measure as the impact can only be realised after a certain amount of time.
In many cases, it is only when an inappropriate service level has an adverse effect on the business, such as excessively inflating safety stock or leaving the business with insufficient inventory levels to satisfy a big customer order, that these are reviewed and adjusted. Put simply, in many organisations, service levels are often wrongly adopted in the first place and then not reviewed regularly enough.
Margin Boost: Music to everyone’s ears
When describing a service level in its purest form, you are describing your company’s goal. It is a translation of your business strategy to your inventory strategy: you are deciding to what extent you want to satisfy your customer’s needs based on your stock capacity.
Although overall availability is seen as one of the key performance indicators when it comes to inventory management, supply chain managers have to draw a line somewhere. Through finding the balance between investment in inventory and service levels, businesses can adopt a more proactive approach to managing every element of their operation. This, in turn, can help businesses maximise sales opportunities, minimise supply chain costs and thus, boost margins.
Put on your dancing shoes
While there is no questioning the benefit of establishing a solid service level strategy, in practice, this is often easier said than done. To help you optimise your approach to inventory management, download our simple 5 step guide today:
Establishing the right criteria to determine suitable product classifications
Determining the right stock levels
Making informed assortment decisions
Monitoring, reporting and reviewing the performance of your service levels