For large retailers, managing the supply chain is a mammoth of a task. Now imagine guiding that mammoth along a tightrope. It’s not easy to achieve a steady balance as the paradigms constantly shift in the world of supply and demand. Jon Nicholas, Professional Services Director, Llamasoft looks at how when it comes to retail supply chains, the consultation process should never truly end.
Supply chain management technology enables retailers to find that balance, but there are often questions, worries and doubts that arise from retailers when certain scenarios are envisioned during the design and implantation process.
Common questions include “what happens if growth doesn’t happen as we have envisaged?” and “what happens if growth is faster, slower or skewed to a particular region, to larger items, to imported products, to products with higher return rates?” The truth is that both are inevitable, yet there is a safety net in place, and this is the very technology that the retailer is questioning.
Scenario lists during a supply chain project only change in one direction. Every single stakeholder’s pet theory and idea will creep on to the scenario list, and with it, the duration of the project. The job of the project manager is to identify the material scenarios, the ones that the key stakeholders are backing, but also to work out what is driving the economics of the supply chain, so that the project team can focus on the most important scenarios.
However, you will never answer all of the potential scenarios, and the reality is that in a few months, the business will have evolved in a way that means that there are now new scenarios that need to be analysed. An effective supply chain solution will enable the retailer re-run scenarios with updated data, look at different time periods, and also build out new scenario data, based on how the business has evolved in the intervening period. The project will continue, but for all the right reasons. Data being refreshed and updated with the latest view of the future is the best way of cross-checking strategic plans, as key decision points come into sight.
It might be that some future questions require a new model to be built, using some of the logic of the previous work, but adding detail that was not originally included. It could be that the flow of bulky items through the network needs to be looked at and a decision must be made on how best to positon through the whole network in order to be ready for a seasonal peak. It could be that returns flows need to be understood in more detail. This is not a failure, demonstrating that the initial model was flawed, but a natural extension of the modeling process.
Network projects should never end. That is not to say that they never get to a conclusion, but that they never stop informing and supporting decisions in the business, as an uncertain world continues.