Collaborative Supply Chain

There are new and expanded demands in today’s retail supply chain to increase and improve the collaboration across all partners both internal and external.  Consumers are included in this increased and improved collaborative supply chain in a manner and depth that is creating new norm in the retail supply chain.  Most retailers have been interacting with consumers via a handful of tools, including product reviews and surveys covering shopping and purchasing experiences.  The more advanced retailers are engaging consumers directly in automated focus groups to collect opinions regarding product and lifestyle advertising.  While these are all productive and healthy steps in the right direction they must continue to expand collaboration with the consumers to engage in relationship shopping and sales to maintain their position in the marketplace.

As the collaborative relationship with customers grows and expands, the retailers will also need to expand their collaborative relationship with their other supply chain partners in order to react to the demands of the consumer.  As an example, expanding the relationship with customers will improve the demand forecasts and I expect this will then change the manner and cycle in which retailers purchase from their suppliers.  Then changes in the supply purchasing cycle will flow into changing requirements in transportation and shipping of products.  Shorter demand purchasing cycles that result from the refinement of demand planning will ripple across the extended supply chain and change the relationships and methods to support the demands.  

These changes can be a very positive thing and result in improved inventory management and placement along with a reduction in overstock inventory.  Improvements and the expansion of the consumer relationship and collaboration will allow retailers to gain insight into their customer demands at an earlier time in the cycle.  This will be especially supported by the increase in data available from the improved relationship along with the increase in eCommerce sales.  In the past retailers were basing their plans on the fashion developers’ tastes and new product development along with the actual sales of the products and similar products.  This was inaccurate and allowed for fluctuations in demand along with missed sales that were not realized.

eCommerce and online sites allow the retailer to capture all of this lost data for action because the provide the ability to capture the consumer shopping patterns when they are shopping on the site.  Retailers can determine the sequence of shopping and selection and these sequence patterns can then be turned into more accurate demand forecasts. So you can see how important it is for retailers to utilize every communication channel available across the supply chain to improve communications and collaboration.  All retailers now need to focus on relationship selling that is supported by the collaboration across all channels and partners.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?