Supply chain strategy for retail: "Integrate planning systems"

Supply chain strategy for retail: "Integrate planning systems"

Supply Chain integration is the key to success in managing an effective replenishment strategy for a retail environment. A retail supply chain is the most challenging to manage for many organisations as operations staff are working in a dynamic environment where customers needs change constantly. The following components are essential:

Inventory policy

This needs to incorporate all items expressed in units and dollars for each store and aggregated for the entire business unit. A multi echelon inventory optimisation approach will focus on a item location and site level for your end to end supply chain.

Open to buy planning

This involves calculating net requirements which are an outcome of the inventory policy less existing stock on hand or stock in transit and sales/returns. Lead-times by supplier are also taken into account and orders are released typically at monthly intervals to adhere to the inventory policy.

Product launch planning

These items are part of the inventory policy and represent new product introductions to a product portfolio. Most large organisations have global marketing teams who develop a market allocation by region which is typically a percentage derived from “like products” or based on other market intelligence. we would recommend that Launch/Promotions plan be a separate planning process as it is complex and specialised, given that it also involves management and coordination of marketing collateral.

Replenishment Model

Selecting the right model is important for your business. Ensure to trial several alternatives before the final replenishment strategy is deployed.

Range Plan

It is a detailed store layout of all product fixtures, shelves, end caps etc that effectively store stock for sale. Fixtures are to be placed in the most suitable positions within the store to generate maximum exposure and return on investment. For efficiency, each facing to hold a multiple of boxes, inner cartons or outers.