Retailers continue to face problems with their supply chains

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Nemea Ltd has recently conducted a major survey into Supply Chain software usage and have produced a report designed to assist with the decisions facing retailers in the area of supply chain automation; in particular who does what.The report also contains a helpful, basic overview section, which covers the elements of the supply chain functions and following that, a market sweep review of over 100 software vendors.

The report states that retailers have struggled to improve their supply chain; often with poor results. Most retailers are still experiencing the old problems such as, out-of-stock, unsold inventory and unprocessed returns, with billions of pounds in lost profits as a result. According to the report, one reason for the mismatch of supply and demand is that many retailers have concentrated on areas such as analysing and forecasting and have not balanced that work with sufficient improvements in areas where the consumer makes the decision to buy the product, whether it is in the store, on the internet or from a catalogue. When Nemea asked software vendors to rank business activities in supply chain in order of relevance, analysing and forecasting was still ranked as the most important business activity by the majority of the respondents.

New complexities have arisen where multiple channels compete for limited stock and lack of integration in the core operations of the business. This has resulted in some hugely complex processes to ensure that limited stock is distributed efficiently and to the most likely location of sale. Results from Nemeas survey support this view because warehouse/inventory and supply/demand integrations are the key supply chain activities that the majority of the vendors in the survey considered to be the most challenging for retailers in the next 12 months. Some comments from the vendors were that retailers needed to integrate multi channel sales systems to ensure accuracy of data and availability of stock to meet consumer demand across all sales channels.

There is no doubt that an increased automation of the supply chain could help the retailer in handling the vast amount of information available and make the supply chain processes more efficient. Therefore, Nemea points out, even for the most affordable software solutions, it is necessary to clarify the different business activities in the company in order to identify the areas that would benefit the most from new software. The reason is that few retailers can afford, or even need to invest in supply chain systems for all their activities at the same time. It is also important to take into account the softwares ability to integrate with existing systems.

Nemea concludes that as an independent review, the aim of this report is not to score and rank the vendors but to give retailers a significant head start on understanding the options available. Whether the reader is a department or function manager within the supply chain area; is involved in a supply chain package selection or improvement project, or is a relative newcomer to the area of supply chain, the report will provide some useful information and insights into this increasingly complex area of retail.

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