Supplying the last 50 yards of Christmas

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Despite having had 10 months to plan for the festive spending spree, many retailers are not taking full advantage of their shopping outlets.

A recent YouGov SixthSense report revealed that UK households will spend £792m less on Christmas this year than in 2011. These findings highlight the need for retailers to optimise all aspects of the supply chain process.

Increased Completion and Better Cost Management

Research conducted by CILT’s ‘Last 50 metres working group’ has shown that more than half of all supply chain costs arise once the product has already reached the shop. In spite of this, warehousing and distribution are by far the most highly scrutinised elements of the logistics process. Very few Standard Operating Procedures (SOP) are in place for stocking shop shelves and managing store rooms.

At a recent Supply Chain Network event, Unipart opined that this lack of a structured approach to in store stock management, means customers may face empty shelves when there is product available in the stock room. Increased competition on the high street and a rise in internet shopping means retailers cannot afford to continue turning a blind eye to these simple mistakes. Every item in the stock room and not on display could equal a lost sale.

Changing the Culture

The main issue is the dramatic shift in focus which takes place once a product is delivered to the shop. Retail outlets exist within a culture which emphasizes sales and profit. Cost is largely left out of the equation.

Sales are clearly fundamental to a business, however, with 88 per cent of “out-of stock” issues occurring in the last 50 yards of the supply chain, better stock management is essential.  By instilling supply chain SOPs, such as mapping out clear processes, creating simple reference guides and training staff, businesses can improve both sales and savings.

Delivering Supply Chain Value

A challenging financial climate represents a great opportunity to optimise current practices. With customers unwilling to spend as much as in previous years and shareholders closely scrutinising balance sheets, cost transformation initiatives are fundamental to achieve growth.

By enforcing supply chain best practice in stores, businesses can benefit from increased stock visibility and more accurate forecasting. This will not only help increase sales but also lead to reductions in stock and, consequently, significant savings.

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