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The process of balancing the demand-supply network is one of the foremost process-related challenges for retailers. A recent survey of 153 retailers by Aberdeen Group, conducted in August and September, shows why: three-quarters of these retailers have multi-tier and multi-enterprise supply chains, resulting in very high process complexity.
Leading retailers have made balancing the demand-supply network a priority, with 69 percent listing this as a top capability. Average and laggard retailers, on the other hand, indicate that they struggle with this issue, finding it both cumbersome and time consuming.
"For average and laggard retailers the lack of process integration capabilities has created a gap between supply chain planning, distribution and logistics, and merchandising stakeholders," says Sahir Anand, research director of retail, hospitality and CPG research. "The need for enhanced process integration capabilities and executive-level cohesiveness is acting as a barrier that impacts current demand-supply network integration, visibility and collaboration objectives in retail.
"Applying a new, systematic way of thinking to manage today's retail supply chains can help retailers build highly competitive and synchronized demand-supply networks for future success," says Anand. He lists three key imperatives for optimizing the retail supply chain:
-- Consumer demand response. The critical components of understanding holistic consumer demand require intensive mapping of the internal demand planning organization with an integrated view of sales channels data.
-- Collaborative supply chain. A demand-driven supply chain management strategy takes into consideration the rising importance of this process. Integrating varied data resources is by no means trivial.
-- Integrated planning and execution of retail supply chain logistics. Visibility and responsiveness have become the necessary ingredients for success in today's multi-tiered supply-demand networks in retail.
Leading retailers are able to achieve the level of responsiveness needed to manage supply chain disruptions and risks, such as the recent credit squeeze that impacted 75 percent of retailers.
The top strategic action identified by leading retailers to address increased supplier complexity is "increasing collaboration initiatives with suppliers." According to Nari Viswanathan, Aberdeen vice president and principal analyst: "Leading retailers are moving towards more balanced demand-supply processes. Other companies also need to increase the extent of collaboration on both the demand and supply sides of their business networks."
To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=6189.
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