Supply Chain Data is the New Black: Why an End-to-End View of Supply Chain Operations Matters

Consider this conundrum: a well respected consumer goods manufacturer gets a call from a key retailer asking to return two years’ worth of inventory on a particular SKU. Two years. Why? Perhaps the retailer didn’t realize how much they had in their warehouse, or visibility into inventory at store level was limited, or the product was moving more slowly than anticipated. Regardless of the reason, the retailer ended up with more than they could sell in the foreseeable future.


You can imagine the manufacturer’s discomfort upon receiving this phone call. Ultimately, it doesn’t really matter what the manufacturer decides to do with the returned product. What truly matters is how to prevent such a situation from happening again. In a highly competitive industry, mistakes like this are costly.


The Value of Full Visibility (Going Beyond Days on Hand)

In today’s landscape, the value of full visibility into your business operations cannot be overstated, particularly in supply chain. With retailers needing to track transaction and inventory data across brick and mortar and online channels, a comprehensive view of such data is now more critical than ever. Across the retail and consumer goods industry, a lot of long-standing practices exist to track shipments, service levels, out-of-stocks, and sometimes even overstocks (check out our post specifically on out-of-stocks). However, large and small companies still struggle to make effective use of their data, leading to situations like the example above. So what does it take to prevent this and similar inventory-related supply chain problems? It starts with the right view of data.


Visibility into days on hand across all your items is important, but supply chain professionals who want to be proactive rather than reactive should ask themselves: do I have visibility into days on hand by DC or by store? What about by planogram? For example, when a new item is introduced or an existing item is about to be discontinued, it makes a big difference to the success of the item’s transition if you know how much you have – and how much you need – by DC, store and planogram. With this granular level of information, you can better manage item transitions, making life easier for your retailer (if you’re a manufacturer) or your store operations teams, merchandisers and suppliers (if you’re a retailer).

Supply chain visibility


A Word On Overstocks

An area we want to specifically call out is overstocks. We opened this article with an extreme (but real life!) example of an overstock problem. Usually it’s the out-of-stocks that get the most attention. But left unmonitored, overstocks not only put your margin at risk when you suddenly have to clear out your inventory with markdowns but also tie up your cash, damage your equity, and can strain your supplier-retailer relationships. The key to managing overstocks is to proactively monitor not only the days on hand but also planogram changes, in addition to fluctuations in demand due to other factors (price change, competitive activity, or promotions). With specific reporting capabilities that help you see what happened in the past, where you currently stand, and what your future position could look like per item, you can more effectively manage inventory to prevent both out-of-stocks and overstocks.


In Sum…

Successfully elevating your supply chain’s analytical capabilities means having the right data and reporting tools as well as the organizational commitment to take action on the insights. Look for an analytics platform that enables both standardized and custom reporting for supply chain visibility so your business can thrive amidst growing complexity and increased competition.


To learn more about how supply chain organizations can elevate their data analytics, check out our webinar on inventory optimization.