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The seven biggest supply chain themes for 2013

Issue 5, May 2013

Date: 16/05/2013 Comments: 0
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The seven biggest supply chain themes for 2013

Having digested some of the changes brought on by poor economic conditions, the consumer goods industry is hoping for a period of stability. It is now beginning to adapt its supply chain structures for the long term and we’ve picked out seven supply chain themes that will be high on the agenda of the most successful businesses this year.

1. Integrating the planning process

In a low stock environment, maintaining product availability is more dependent than ever on having integrated planning processes. To realise the benefits of cutting stocks without damaging the on-shelf availability, companies need to integrate demand and supply planning, have processes that work across the whole supply chain and are designed to give both short term flexibility and long term capability.

2. Understanding the online channel

The consumer goods marketplace is becoming increasingly multi-channel and IGD expects significant growth from online retail, including both click-and-collect and home delivery.

The companies that really understand these changes will be best placed to succeed. In supply chain this means getting to grips with the online channel’s demand patterns, moving products quickly through the online distribution network and having product formats that meet the needs of the supply chain, with packaging robust enough to cope with the additional handling.

3. Spring cleaning data

Achieving a significant improvement often depends on making many small gains. Removing the error resulting from inaccurate data about the physical and demand attributes of products can be a major factor.

Successful businesses continually validate and update the data they hold and share with others. Doing this would help to maximise the impact of other initiatives, including those resulting from the other major themes we’ve identified for this year.

4. Bringing the category networks together

As businesses get a clearer view of the road ahead, they are adjusting the size and strengths of their supply and distribution networks. For many consumer goods companies, this means integrating networks that had been split by product category. In the case of manufacturers and retailers, bringing the supply chain networks for different categories together allows them to replenish continually across a wider range of categories while maintaining order sizes sufficient to keep the process efficient.

5. Taking the supply chain in-store

Shoppers are becoming less loyal; they shop around more and use a broader range of channels to do their shopping. So it’s important that when shoppers do come into the store, they find what they want.

Measuring on-shelf availability accurately, and responding to any problems quickly is essential to keep shoppers coming through the doors (or visiting the website). To help them succeed, retailers are placing more emphasis on measuring in-store performance, and getting their suppliers to respond quickly to keep the shelves stocked.

6. Automating order picking

In an effort to improve service levels, more and more businesses are automating manual processes. The sophistication of the latest equipment means it can be used to help improve pick accuracy and customer service as well as provide economic efficiency. Both retailers and manufacturers are exploring the ways that automation can give them a competitive advantage.

7. Sharing resources – priorities, projects and people

As businesses strive to deliver more with less, the most successful companies are realising that working jointly with their trading partners and sharing expertise presents a significant opportunity.

Raw material suppliers, manufacturers and retailers are setting shared priorities, working together on strategic projects and sharing people with job swaps.

Richard Jones

Senior Supply Chain Analyst

IGD

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