Our Ninja Retail series focuses on the ways in which retailers can reduce inventory and working capital requirements. You can check out the introduction here. Our previous post was focused on how you can think faster as an organization to reduce inventory and respond to market trends faster. But that only helps so much if your suppliers don’t join the party. Here’s why you need that and how you can make it happen.
Agility demands suppliers moving in lockstep with retailers and the first step is visibility into demand and order status. Our conversations with more than a hundred retailers across the globe post-Covid show us that a majority of retailers still collaborate with suppliers using clunky systems of record, emails or standalone collaboration/productivity tools, none of which truly break down any walls. The walls exist for very good reasons.
Take the fictional Erratic Retail. Don heads Procurement and he hates how much time his team spends following up with vendors to find out where they are on an order. When they do find out they need to update Sandra and her colleagues in merchandising and Tracy in Supply Chain. He’d love to know where his suppliers are on each order. Better yet he’d only like to see potential delays that may impact sales on his radar. But his suppliers all have their own systems. They don’t want to spend any more time on data entry than they have to. So Don has gotten used to juggling tons of emails and messages and his team spend a lot of time playing postman.
Don’s suppliers would love to get more visibility into upcoming orders. Naturally Erratic Retail cannot give suppliers complete visibility into their own forecasts, they want to tailor that visibility to operational imperatives. That means factoring in inputs from across Erratic Retail into scenarios that get optimized into forecasts. Erratic Retail’s analytics tools don’t have the workflow and automation capability to even think of doing it automatically.
Don and his suppliers only find out when it’s time to order already.
So what does it take to truly break down the walls between you and your suppliers?
First and foremost you need to give suppliers an easy way to keep you updated. Easy meaning it can’t take more than a click or two on a mobile device. So you need a tool that’s no-code, mobile, easy to navigate and quick to deploy or change.
Now your procurement people know where every supplier stands with every order at any given point in time. Timelines can be incorporated into the workflow and your people now know which orders they need to get the vendor to expedite. Plus relevant updates can be auto-routed to the right allocation people. We’ve seen this free up 30-50% of time for the procurement team. You now have accurate real time data on supplier timelines and delays that can go straight into your analytical models for planning and vendor performance management. So now when your planner consider in-season adjustments your system can tell them exactly how much time it is going to take to get SKUs onto shelves and they can plan accordingly.
To get something you need to give something and if you want real time visibility into supplier progress the best thing you can give a supplier is visibility into demand. If you don’t have a system that tracks sales and inventory against your plan, forecasts the next few weeks based on the latest data and identifies orders that need to be changed you need to check out our last post. But if you have that covered then it’s pretty easy. It’s easy to build dashboards that track potential changes to the order plan by vendor. Now all you need to do is choose the conditions that need to be met before a supplier sees the item on their dashboard. For example a conditional approval to changing the order from the right stakeholder. The condition may be a sustained higher sales over a week or any other metric that makes sense. Your supplier now knows what to expect and more importantly they know about it the moment the expectation becomes a reality. The final piece to the puzzle? When your vendor sees something needs to be connected to lead times and those lead times can guide your decision making process.
If this sounds exciting I’d like to tell you that it isn’t just a story, it’s something we’ve delivered. Reach out to us if you’d like to know us or our solutions better.
