Supply Chain Blog

Supply Chain Analytics helps international retailer in business turn-around

Posted by Dave Jordan on Thu, Jun 07, 2018

Many will recall that famous Four Yorkshiremen sketch first seen the At Last the 1948 Show and later Monty Python. Four dour characters recall how tough it was when they were younger with each trying to out do the others in a downwards spiral of harshness. While the claims were outrageous and equally ridiculous it had me thinking about how things have changed. If you beamed an 18-year-old back to 1970 what would they see?

  • An analogue telephone attached to a wall with a wire and to call anyone you had to literally dial the numbers with 1 finger using the rotating plastic ring.

  • If you didn’t have a telephone wired into the house you had to put your coat on and walk to a red K6 telephone box, usually in the rain and there’d be a queue. You would need to carry 2p and 10p coins to keep the call active.

  • A television which was probably a black and white model operated by valves housed in a huge rear section. To change channel (there were only 3!) you had to get off your backside, walk across the room and turn a dial, or push a button if you were posh.

  • Need to send someone a message? You did that by writing (possibly typing) on a piece of paper, putting it in an envelope, buying a stamp and popping it in 1 of the red post boxes dotted around.

  • You want to listen to music? Take the black vinyl 7 or 12-inch disk out of the sleeve and place it on the Dansette record player the size of a small suitcase. Manually lift the stylus, place it on the disk and away you go.

I could go on and on and list many examples of life in the pre-digital age. Youngsters today don’t know they’re born!

SUPPLY_CHAIN_ANALYTICS_RETAIL_GLOBALAll of the examples above would also have been used in industry in some form and business has seen equally dramatic changes to how they operate. I will focus only on 1 area here and that is Supply Chain Analytics. No more guessing at how decisions may affect your performance, a good analytics package offers you a virtual crystal ball! Let me take you through a case study.

The Challenge

A well-known international retailer was suffering high levels of inventory in warehouses and in retail outlets plus this stock was the wrong mix for the sales pattern. The company was unable to accurately coordinate the flow of goods from long lead time suppliers to outlets. As a result, expensive emergency air-freighting was used to avoid out of stocks yet, despite this cash draining initiative, working capital was well above target.

The Solution

SupplyVue Analytics reviewed the demand profiles in outlets and at an aggregated level in central warehouses. At outlet-level granularity, the demand was far too sporadic to be forecast, however, at central warehouses, product flow was sufficient to determine a reliable forecast. Analytics demonstrated that a switch to a Kanban pull approach from the central warehouses to outlets would transform inventory levels and eliminate the need for air-freight. In addition, the company implemented a complementary demand-driven replenishment mechanism from central warehouse to multiple suppliers.

The Impact

1. A sustainable 25% reduction in overall inventory levels across a complicated Supply Chain.

2. A deeper understanding of demand profile enabled the company to provide a more predictable and stable signal to suppliers which in turn raised their reliability.

3. Completely eliminated air-freight costs caused by product shortages with an associated increase in Customer Service.

So, progress in this digital age is not all bad and once you have taken a Test Drive or Pilot in Supply Chain Analytics you will wonder how on earth you previously managed. If you need further information please get out your quill and ink write a letter to Enchange!

Image courtesy of photostock at freedigitalphotos.net

Tagss: Supply Chain Analytics, Dave Jordan, CEO, Inventory Management & Stock Control