Executive Briefings

The Challenge of Retail Channel Management

Margaret Kairis, director of customer supply chain operations with Sony Electronics, talks about how the company has collaborated with a select group of retailers to improve in-stock levels, without causing excessive inventories.

Sony Electronics had long collaborated with retail partners on data exchange and demand forecasting, utilizing point-of-sale data and aggregate inventory levels. Now, says Kairis, the company has embraced the concept of "collaborative channel management." It involves "working with our channel partners to create the best experience for our end consumer." To make it work, Sony is involving all key partners in the "end-to-end" supply chain, including headquarters in Japan and regional sales and marketing organizations.

One key to the new approach is obtaining solid support from Sony's global headquarters team. "It has really helped to drive the change," says Kairis. The next piece is identifying the roles and responsibilities of all individuals in the chain. That's followed by focusing on data, to examine store-level information on a weekly basis. With that intelligence in hand, and working closely with retailers, Sony can formulate an action plan and determine which areas need attention.

Sony works from a series of key performance indicators, measuring such critical factors as in-stock levels and customer weeks of supply. Kairis notes improvements of 40 percent and 50 percent, respectively, in those areas since implementation of the new collaborative effort. "We want to see an increase in available inventory at the right locations," she says,"at the same time not driving up inventory levels."

The company has created both an internal scorecard and one that can be used with its top two retail channel partners. It has done a lot of work on "fine-tuning" the metrics, Kairis says, to ensure best use of the data. She says the retailers have responded favorably to the effort. "They really appreciated the visibility to what's happening in their location, and the guidance we've been able to provide," she adds. "We've suggested order forecasts on a weekly basis. They work through what they can and can't utilize."

Future enhancements, involving deeper analysis of product categories and customer demand, will involve close cooperation with retail partners. Says Kairis: "We can't do it without their support."

To view this video interview in its entirety, click here.

Sony Electronics had long collaborated with retail partners on data exchange and demand forecasting, utilizing point-of-sale data and aggregate inventory levels. Now, says Kairis, the company has embraced the concept of "collaborative channel management." It involves "working with our channel partners to create the best experience for our end consumer." To make it work, Sony is involving all key partners in the "end-to-end" supply chain, including headquarters in Japan and regional sales and marketing organizations.

One key to the new approach is obtaining solid support from Sony's global headquarters team. "It has really helped to drive the change," says Kairis. The next piece is identifying the roles and responsibilities of all individuals in the chain. That's followed by focusing on data, to examine store-level information on a weekly basis. With that intelligence in hand, and working closely with retailers, Sony can formulate an action plan and determine which areas need attention.

Sony works from a series of key performance indicators, measuring such critical factors as in-stock levels and customer weeks of supply. Kairis notes improvements of 40 percent and 50 percent, respectively, in those areas since implementation of the new collaborative effort. "We want to see an increase in available inventory at the right locations," she says,"at the same time not driving up inventory levels."

The company has created both an internal scorecard and one that can be used with its top two retail channel partners. It has done a lot of work on "fine-tuning" the metrics, Kairis says, to ensure best use of the data. She says the retailers have responded favorably to the effort. "They really appreciated the visibility to what's happening in their location, and the guidance we've been able to provide," she adds. "We've suggested order forecasts on a weekly basis. They work through what they can and can't utilize."

Future enhancements, involving deeper analysis of product categories and customer demand, will involve close cooperation with retail partners. Says Kairis: "We can't do it without their support."

To view this video interview in its entirety, click here.