Let the spending bonanza begin. This holiday season we are projected to part with $619.9 billion, marking the first time since 2011 that holiday sales will increase more than 4%, according to the National Retail Federation.
The flurry of holiday orders raises the stakes for retailers. Several studies show customers are, rightly so, a demanding bunch. They have no tolerance for out-of-stock inventory and delivery issues.
As many as 89% would pick another retailer for future purchases if a single order arrives late and 73% would head straight to another seller if their product of choice was out of stock, according to a 2013 study by Capgemini. The bottom line: Please the customer or perish.
The same study also reveals more than half of US supply chain managers admit supply chain issues have had a negative impact on the company's revenue or profitability over the past few years. Managers specifically cited responding to volatile customer demand in real-time as a top challenge.
For all the inventory management and order fulfillment strategies out there, few take such a comprehensive approach as real-time analytics. If you're in the habit of analyzing data after the fact — after an item has run out or after a supplier has failed to make a delivery — you are bound to send your customers running for the competition. You need access to streaming data in real-time in order to pinpoint and respond to problems as they happen.
Let's narrow down the reasons real-time analytics is so crucial for successful order fulfillment:
- End-to-end supply chain visibility : With every component of your supply chain operating on one platform, data is shared and accessible to all parties. As Jennifer Sherman, senior director for fulfillment applications strategy at Oracle, points out: “You have one picture of inventory, one picture of costs, and one platform to plan against. This allows you to have real-time inventory within that one model and even track who owns that inventory — even if I've got a product that has been consigned to me from my supplier, it's still in the same inventory model.”
- Demand anticipation: By combining historical data and real-time analytics, you will be better equipped to predict future demand, plan for contingencies, and prevent core operations from crumbling during peak distribution times.
- Creative solutions: Real-time insights allow managers to get creative to move product toward the end destination as quickly as possible. In some instances, it may allow the distribution center to be bypassed as inventory can be allocated before the ocean carrier — increasingly treated as a mobile warehouse — even reaches the port.
- Corrective action: Customers do not need to know about your supply, inventory, and distribution issues. By identifying bottlenecks and problems in real-time, you can take corrective action before they take to your website to write stinging reviews.
Speedy order fulfillment comes with a host of challenges — responding to customer demand in real-time should not be one of them.
What do you consider to be the key components of effective order fulfillment during peak season?