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The potential of point-of-sale data has always been known, but the realization of that potential has only come in recent years, with improvements in technology and more accurate data, says Lalor.
“We are now seeing companies communicating this data to suppliers in a way that really enables waste to be removed from the supply chain because they no longer need to keep large buffers of safety stock,” she says. “This benefits everyone, from the customer to the supplier and, ultimately, the consumer.”
As an example, Lalor cites Walmart’s retail link, which enables thousands of suppliers to monitor the sales of their goods and replenish inventories. “A supplier can go in and find out what products have been selling just in the last hour over thousands of stores. It’s really phenomenal,” she says.
Having fast and accurate POS data also improves the sales and operations process, Lalor says. She describes a John Galt client that is a large global consumer electronics company with 44,000 retail outlets around the world. “They have over 100 collaborators in the S&OP planning process,” she says. That would previously have been untenable, but now, with the accuracy and accessibility of inputs around demand, “they can get a true, unconstrained demand picture, which is really critical to S&OP.” Once that is achieved, “you can start to make longer term decisions around the type of expenditures required to meet demand and whether it would be better to increase capacity or to outsource,” she says. “The longer ahead you can make those decisions, the less reactive you have to be in the day-to-day with expediting and so on. You start to smooth out operations and make better planning decisions.”
The next generation of this technology will be to predict where the consumer is going, perhaps even before the consumer knows, Lalor says. “There is so much data out there that could help companies get closer to consumers, if they are able to harness it.”
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