Executive Briefings

Retailers 'Most Concerned' with Product Availability, Low Inventory, Forecast Accuracy

The ability to increase merchandise availability without boosting inventory, and forecasting new products, are two issues that are top of mind for most retailers, according to a survey of retailers in North America, the UK, Germany and the Nordic countries.

Released by RELEX, a supply chain solution provider that focuses on in-memory computing, the "State of the Retail Supply Chain 2016" canvassed companies reporting annual sales in excess of $110m.

"For me, it is interesting to discover that whilst 64 percent of retailers globally highlighted forecasting for promotions as one of their main challenges, only 35 percent have a system in place that can build automatic demand forecast for promotions and only 22 percent have a system that can manage promotion stock run to clear fixtures for the next promotion,” says Mikko Kaerkkaeinen, Group CEO, RELEX Solutions.

Issues regarding supply chain planning and execution
The top issues regarding supply chain planning and execution for North American retailers are similar to the global average. However, the second-largest issue is better collaboration with suppliers and these retailers have a higher priority than the average retailers in the other countries examined for the report. When questioned, some retailers mentioned that they had worked on supply chain issues internally and feel that external supply chain improvements will be the most beneficial.

Challenges regarding forecasting
The report discovered 73 percent of North American retailers are most concerned about the forecasting of new products, which is well above the global average (58 percent). The United States tends to be the country where most of the new products are developed and launched, which causes greater problems for North American retailers than elsewhere where there is typically a lower proportion of new products in an assortment.

Visibility of the supply chain
North American retailers rated the visibility of their supply chains a 6.5 out of 10, which was just behind the highest rating of 6.6 for German retailers. The UK represented the poorest visibility rate of retailers (5.4), while Nordic retailers rated slightly higher (6.0).

Operating a single stock pool across sales channels
North American retailers with more than one sales channel are marginally less likely than average to operate a single stock pool (39 percent) of retailers vs. the all-country average of 43 percent). German retailers with more than one sales channel are however marginally more likely to operate a single stock pool than the average at 46 percent and Nordic retailers are even more at 48 percent against the international average.

Staff productivity
Retailers in North America are more efficient than retailers in other countries surveyed for the report in terms of staff productivity. The average full time equivalent employee forecasts and replenishes an average of just under $270m of sales. This compares very favorably with the overall country average of just below $190m of sales.

The likely reason for that finding is the larger average size of the North American retailers who are able to realize greater economies of scale than in smaller countries. It's easier to grow a big chain and achieve economies of scale in the United States, simply because there are so many cities where a retailer can open a store.

Click here
to download a copy of the research.

Source: RELEX Solutions

Released by RELEX, a supply chain solution provider that focuses on in-memory computing, the "State of the Retail Supply Chain 2016" canvassed companies reporting annual sales in excess of $110m.

"For me, it is interesting to discover that whilst 64 percent of retailers globally highlighted forecasting for promotions as one of their main challenges, only 35 percent have a system in place that can build automatic demand forecast for promotions and only 22 percent have a system that can manage promotion stock run to clear fixtures for the next promotion,” says Mikko Kaerkkaeinen, Group CEO, RELEX Solutions.

Issues regarding supply chain planning and execution
The top issues regarding supply chain planning and execution for North American retailers are similar to the global average. However, the second-largest issue is better collaboration with suppliers and these retailers have a higher priority than the average retailers in the other countries examined for the report. When questioned, some retailers mentioned that they had worked on supply chain issues internally and feel that external supply chain improvements will be the most beneficial.

Challenges regarding forecasting
The report discovered 73 percent of North American retailers are most concerned about the forecasting of new products, which is well above the global average (58 percent). The United States tends to be the country where most of the new products are developed and launched, which causes greater problems for North American retailers than elsewhere where there is typically a lower proportion of new products in an assortment.

Visibility of the supply chain
North American retailers rated the visibility of their supply chains a 6.5 out of 10, which was just behind the highest rating of 6.6 for German retailers. The UK represented the poorest visibility rate of retailers (5.4), while Nordic retailers rated slightly higher (6.0).

Operating a single stock pool across sales channels
North American retailers with more than one sales channel are marginally less likely than average to operate a single stock pool (39 percent) of retailers vs. the all-country average of 43 percent). German retailers with more than one sales channel are however marginally more likely to operate a single stock pool than the average at 46 percent and Nordic retailers are even more at 48 percent against the international average.

Staff productivity
Retailers in North America are more efficient than retailers in other countries surveyed for the report in terms of staff productivity. The average full time equivalent employee forecasts and replenishes an average of just under $270m of sales. This compares very favorably with the overall country average of just below $190m of sales.

The likely reason for that finding is the larger average size of the North American retailers who are able to realize greater economies of scale than in smaller countries. It's easier to grow a big chain and achieve economies of scale in the United States, simply because there are so many cities where a retailer can open a store.

Click here
to download a copy of the research.

Source: RELEX Solutions