Today, I welcome
Dale Pickett as a guest blogger. Dale has been with Tompkins Associates for
nearly 20 years and has spent much of his career in distribution network
design, warehousing design and operations, warehouse management systems, and
manufacturing. He has keen insight into the best solutions that lead to
long-term success for retail companies.
-- Jim
Some
people love the change of seasons, but others would like it to remain their favorite
season year-round.
While
Mother Nature’s changes impact us all, have you ever considered the effects of
the seasonal shift for retail merchants? The change of seasons brings special
challenges for retailers and their suppliers. The planning and logistics of
getting merchandise to the store is staggering.
To begin,
let’s take a look at the current economics of the industry.
How are
current retail sales? Several industry metrics indicate an upward trend for
just about all retail
segments, with the exception of furniture. Folks have been holding off spending
for the last couple of years because of the uncertainty
of the economy, and now the items that they have been putting off finally
need to be replaced.
Depending
upon where you are geographically in the US, the merchandise is coming to a
store near you. For the large items, we have new lawn mowers, outdoor
furniture, bigger screen TVs, grills, appliances and beds.
For the everyday
items, customers want to buy new clothes to refresh their wardrobes or improve
on electronic gadget by using a tax rebate.
This year
is/has been full of opportunities to recognize the gaps in the supply chain.
Forecasting
models are really set up to use historical information to make a best guess. The
tough point is that trends over the last couple years have been down and
inventories squeezed to the minimum. The merchandising group has really had to
use the old crystal ball and keep their fingers crossed that everything will work
out as expected.
So how
are you doing with the seasonal push? Have you been meeting your weekly or
biweekly circulars? Have you met your customer demand? Have you been shifting
merchandise around with excess transportation
costs due to fuel costs and loosing margin just to get it to the right place?
Bulk Merchandise Blues?
The toughest
product to deal with is the bulk merchandise. When 50 containers show up on
Monday morning and you were expecting 5, it is a problem. This product will occupy
an incredible amount of floor and storage space and hurt the entire operation.
One method
to deal with this surplus – rather than processing with normal delivery – is to
crossdock with a terminal philosophy, create separate truckload shipments, and
get it out immediately.
This is
generally limited to the spring push to the store, and it is very effective but
can be painful for the store.
Another approach
is a direct-to-store level delivery in front of the supply chain. This
deconsolidation of bulk vendor shipments and consolidation to the store helps
bypass the primary supply chain. Timing is everything, so it is important to do
a test prior to launch. This concept is gaining momentum because this can
really help before purchasing more square footage in your supply chain.
What
approaches do you use to handle the “spring push”?
-- Dale
Other Resources
China
is Changing Supply Chains Around the World: Facts and Trends
Sourcing
and Selling in Challenging Economic Times: How Retailers Should Re-think Their
Operations and Methods
Finished Goods
Inventory Management Hot Topic Report: New Views on an Old Issue
Top 11 Priorities in
2011 for Retail Companies