Vantage Point: Supply Chain Visibility -- A Make or Break Competitive Differentiator

By: John DiPalo, chief technology officer, Acsis, Inc.

Manufacturers and suppliers in the retail and consumer goods industries know that success hinges upon accurately anticipating consumer demands and putting the right products in front of the right people at the right time. Perhaps no marketplace is more susceptible to wild fluctuations, or more at the whim of shifting consumer loyalty than the retail industry, especially when you factor in speed and flexibility of online shopping. For manufacturers and suppliers serving this market, the goal is clear -- keep pace with the trends or risk being lapped by the field.

Speed and Accuracy of Delivery

In addition to ensuring that operations align with consumer buying patterns, organizations working in the retail industry must also deliver the products consumers desire in a timely, almost immediate manner. To cope with these challenges, manufacturers, wholesalers and suppliers need to improve the accuracy and efficiency with which they currently track productsâ⬦not just current inventory, but throughout the entire supply chain lifecycle, so they can be sure they are making the right items available at the right time.

Wal-Mart has been leading the charge for improving these efficiencies for some time and recently upped the ante in its push for RFID tagging. Wal-Mart announced its RFID expansion requirement from tagging at the pallet level down to the individual product level. It was about two years ago when Wal-Mart first made public its Sam's Club initiative requiring suppliers to implement RFID technologies in order to do business. Now, as the requirements become more stringent, many are asking how will this affect suppliers and the supply chain technologies these suppliers have implemented and continue to implement.

It has been my experience that those suppliers and wholesalers looking to work with Wal-Mart have fallen into two categories: one is the slap-and-ship supplier who will spend the money to do the bare minimum requirement to adhere to the Wal-Mart policy; the other category is comprised of those suppliers who embrace the extensive benefits of RFID and tagging technology. This group is not just trying to satisfy the needs of its key customer, but is looking back into its supply chain and seeing where it can take advantage of track and trace technology across the entire supply chain lifecycle, ensuring better visibility and timely ROI for the investment.

An Operational Overhaul

Track and trace technology provides the capabilities and expertise that enables those working with retail organizations to tighten control over the full breadth of the supply chain by uniting the data found in disparate systems and producing a single view of organizational truth. This includes leveraging a unique architecture that wraps ERP, POS and other key operational systems into a single dashboard, giving a common platform that spans locations, environments (even into partner facilities) to provide end-to-end visibility, traceability and event management across the value chain.
By capturing and providing information in this way, track and trace technology supplies the intelligence and insight needed to better predict emerging trends, visibility into how consumer demand can affect production and enables decision makers to quickly adjust supply to meet demands accordingly.

For example, in anticipation of the holiday season, research shows that there will be a strong demand for green sweaters. Target works with a handful of suppliers globally and wants to make sure they can provide the quantity of sweaters desired in time for Black Friday. With track and trace solutions that are integrated across the entire supply chain, Target has visibility into which suppliers can meet demand or whether one of its suppliers won't be able to deliver, because the green dye manufacturer overseas that it partners with has recently gone out of business.

 
To take this a step further, a major flaw in how retailers operate is the software they use -- traditional merchandising systems just monitors current inventory. There is no visibility at the supplier level. Since it is all skew based, all the naming conventions are different and there is not a single, collaborative portal. In the case of the green sweaters, Target can also leverage the track and trace technology, down to the item level to ensure that each store gets the right number of sweaters and in conjunction with the merchandising systems, can track how sales are going at each store -- ensuring that inventory can be transferred easily.

Don't Get Left Behind

The speed in which the retail industry is moving will continue to rise and will require suppliers, wholesalers and manufacturers to change their course of business or be left behind as their competitors come in and grab valuable market share and shelf space. As more retailers require suppliers to implement item-level tracking it is important that they don't do the "quick fix" to get in the door. They must take a close look at the investment they are making and leverage that technology to improve supply chain operations at every level.

 

_________________________________________________________________________