|
In a sluggish global economy with varied perspective on when and how the retail industry will fully return to a state of consumer confidence, there appears to be growing optimism. A resurgence of retail IT spending is emerging in North America. During an economic slowdown and transition period, there are opportunities to prepare for the good times ahead. Supply chain IT managers, irrespective of channels, need to address structural components that will provide process and financial efficiencies in the supply chain process.
The decision to return to budgeting and investing in select components of the retail enterprise is often dependent on both financial and process return as well as the length of time it takes to see bottom line benefits. It's a time to maximize staff to improve systems and processes. Strategic retailers of all sizes must now consider both a short- and long-term business strategy by increasing IT spending in essential areas of the business that will reap near-term, measurable results, while still staying focused on the long-term strategy. Priority is being given to initiatives providing considerable financial return.
Bottom Line Focus
A major Canadian drug company RPE is working with is a prime example. The company historically operated the retail stores very successfully without perpetual inventories and is now making the investment to change this. The focus is on achieving a fast ROI and the add-on capabilities it will provide for auto replenishment, assortment optimization, improved in stock position and lower inventory levels.
In the area of merchandising planning, attainment of assortment and key item planning provide specific and tangible financial return. Having the appropriate assortment, down to the SKU level, will provide a retail operation the ability to ensure maximum product selection, at the most appropriate price, in the accurate geography for an optimal demographic.
Retailers in all verticals are focusing heavily on merchandise inventory controls, merchandise planning and better localized assortments. Enterprise merchandise planning, location planning, allocation and assortment planning are being integrated together in the process flow to achieve increased sales and margin with decreased inventory.
When the initial assortments are constructed, the goal is to understand and plan the product lifecycle from the initial assortment phase all the way to the supplier. As assortment plans are built, the PLM (Product Lifecycle Management) as well as the Supply Chain are all impacted with the shared information. A number of RPE clients are investing in Enterprise Planning systems to the SKU size and color level creating well-focused merchandise and assortment plans.
Similarly, inventory optimization, at both the warehouse and store levels, demonstrates a tangible and measurable financial return on investment. Important components of safety stock, service levels, demand and supply constraints, inventory targets, minimizing out of stocks, connectivity and visibility to core host systems are all integral in improving bottom line results.
Effective Collaboration
Consultation and collaboration have become effective initiatives for all retail tiers as IT departments commit to supporting these priority initiatives. Sequencing already deployed solutions for enhanced results has helped numerous retailers across the enterprise. Retailers that have debated whether to purchase additional applications from independent software vendors often opt to work side-by-side with process driven consultants who bring deep domain knowledge and proven methodology in key areas such as merchandising, replenishment, lifecycle management and POS solutions.
Retail IT departments are also engaging consulting organizations to integrate stand-alone systems into more productive environments, enabling broader efficiencies within retail operations. The payback for retailers is often within months, fully substantiating the investment to optimally deploy already owned solutions. Additionally many of these retail organizations have identified business intelligence, reporting insights and market analytics as important assets in the decision process.
More and more retailers are choosing to partner with strategic IT and consulting partners to lay out strategic initiative road maps that will, over time, deliver the IT and process infrastructure to connect the supply chain with product lifecycle and the business processes. Doing this more effectively, will maximize the knowledge sharing throughout the processes and will shorten delivery times, lower costs, while increasing ROI. However, making sure this is truly a collaborative effort is essential. RPE is working with a worldwide leader in branded lifestyle apparel and has been invited to participate in the company's vendor collaboration meetings to discuss its initiatives. All business processes are being reviewed, realigned and updated with the best of industry standards and thinking.
Emphasis on the Cloud
Among retailers large and small, there is a better understand that licensing necessary ERP supply chain solutions is not the only option, especially when there may not be the internal infrastructure to best support these purchases. There are many retailers today effectively collaborating with business partners in Cloud Computing, Hosting and Software as a Service (SaaS) environments enabling lower upfront costs, leaving the hardware and server purchases to highly established and effective consulting organizations that have deployed these solutions for multiple retailers.
Many installed ERP solutions have not been maintained over time and do not have the features and capabilities to meet current business needs. Since the turn of the century when many ERP systems were put in place, business conditions, practices and priorities have changed. A RPE client that is a yoga and sports apparel retailer and manufacturer, with a rapidly expanding business, is in the process of assessing all installed systems to set a strategic path for the future. This entails upgrading and replacing systems that will enable a growth business and maximize profitability.
Maximize the Opportunity
As the competitive retail climate continues to expand and retail margins continue to subside, it will take an innovative, committed, dedicated and collaborative approach to assist retailers in achieving business objectives. Retail IT departments have shown strong signs of reinvesting in core processes. There are organizations, tools, methodologies and personnel with extensive domain expertise, prepared to assist in addressing many of these ERP supply chain challenges. Leading and progressive retailers of all sizes and verticals must carefully and prudently consider these opportunities as part of the company's responsibility to employers and stakeholders.
About RPE
RPE is a leading retail consulting firm specializing in business process improvement, package selection, strategic IT planning and systems implementation to deliver innovative merchandising and supply chain solutions. Areas of expertise include JDA Software, Manhattan Associates, Manthan Systems and most other leading solutions. RPE also provides cloud computing services including hosting, Software as a Service and managed services. Clients include Anna's Linens, Cabela's, Charlotte Russe, Guitar Center, Five Below, Fred Meyer, Forzani Group, lululemon athletica, Michael Kors, Modell's Sporting Goods, Nautica, Perfumania, Party City, Rexall, Spencer Gifts, Vitamin Shoppe, VF Corp. and many more. For more information, visit http://www.rpesolutions.com.
Return to Top of Page
|
