Author: Helen Thomas

Very few retail organizations are structured to handle the business disruption or cost of being the early adopters of new technology. This is especially true when the technology has a direct impact on the communications with all of their largest suppliers. However, over the past twenty-four months, we have begun to see the adoption of demand driven supply chain strategies beyond the early adopters, and into a much larger and more wide-spread early majority. This is causing many retail executives to take notice and begin to seriously plan out their organization’s approach. This leads to two key questions we consistently hear from these executives; first, what are the world-class leaders doing, and second, how can we quickly and cost effectively realize the process improvement without a huge technology investment?

One of the key lessons learned from watching the early adopters implement the demand driven supply chain is, that technology is only a small part of success. The technology is simply a foundation which allows buyers and suppliers to establish collaborative joint business processes. In fact, if approached as merely a technology project, one might as well just use EDI or Excel and call it a day.

However, world-class leaders are sharing with suppliers a rich data set, including SKU level data, and they are providing the information analysis tools to make the data immediately actionable. Sharing a rich data set provides a supplier and buyer the framework for a valuable and detailed conversation around sales and inventory. End users can begin their evaluation at a category or product family level, and then drill down the hierarchy all the way to an individual SKU.

Rather than a data dump using EDI, Excel or downloadable files in a vendor portal, world class leaders have implemented information sharing tools. Information sharing tools transform rows and columns of data into visual performance dashboards and provide exception condition monitoring, so an end user can quickly interpret the information and take necessary actions. They bridge the gap between bytes of data and the information necessary for managing in-stock levels. With the addition of an exception dashboard, the end user can be quickly alerted to problems and opportunities without having to scrutinize each SKU individually in some massive spreadsheet. The dashboard also establishes one common version of the truth, so time previously spent explaining how reports were calculated, can be spent finding the next big cost savings. Our clients tell us that just having everyone on the same page can save dozens of hours each week, then multiply that times hundreds of suppliers.

The second question we often hear, involves how to most cost effectively implement a demand driven supply chain. Here, the lesson to be learned from the early adopters is the cost they paid to build the infrastructure. For example, Wal-Mart estimates a $4 billion dollar investment into Retail Link, which is a shocking number, until you consider the scope and complexity of the project for over 10,000 suppliers. For example, a mid-sized specialty or hard goods retailer with 600 stores, is likely to have about 2,000 suppliers, 400 of which are on active replenishment and will be part of a data sharing program. On average, each of the 400 suppliers will have two users (one sales and one operations), and the retailer will have approximately 50 users who need to directly collaborate with the supplier community, so there is a universe of approximately 850 users to provide with data, software, training and help desk support. The end user reporting tools sit on top of a database, which can easily grow to multiple terabytes because world-class leaders are using a very rich data set, including SKU level sales and inventory across a historical timeline of 18 months. Anytime there is a large technology infrastructure cost to support a business process for several hundred globally dispersed end users, you have a good candidate for outsourcing. And as previously stated, the value is derived from the collaborative exchange between the buyer and supplier, not from the transfer and management of bytes of data, so why not turn that variable cost into a fixed monthly purchase and let the provider manage the risk. Outsourcing also provides the additional benefit of a service level agreement, so all parties can be confident the system will be available and ready when they want to use it.

Our article titled “The Case for Supply Chain Collaboration”, and published in vol 1 of the Journal of Trading Partner Practices, identified the financial opportunities associated with the demand driven supply chain. These benefits include increasing sales by 5 to 10% and operating margin improvement of 5 to 7%. Now that the early adopters have paved the way and learned the tough lessons, we are seeing the early majority start to move. Now is the time to talk with your team and determine how best to implement a demand driven supplier collaboration program at your organization.

If you are a vendor supplying to BJ’s Wholesale Clubs, you are eligible to receive product sales activity and inventory data via EDI 852. Preparing to setup and receive the EDI 852 files can be confusing, and creating usable reports for your team can be very time consuming. Fortunately, Accelerated Analytics® provides a simple, outsourced service for all your BJ’s EDI 852 reporting needs.

Using Accelerated Analytics® makes all your reporting headaches go away. With Accelerated Analytics®, we handle all the data conversion, database hosting and reporting. We even provide training and the end user reporting tools. 

Accelerated Analytics® benefits:

• Eliminate manual data entry and manipulation
• Consolidate all BJ’s store data on all your SKU’s into one reporting database
• Pre-built exception reports with color coded dashboards
• No software or hardware to purchase
• Sophisticated charts and graphs

Available reports:

• This weeks sales and inventory by store and SKU
• Last weeks sales and inventory by store and SKU
• This months sales and inventory by store and SKU
• 6 week rolling sales and inventory by store and SKU
• Sell-thru
• Inventory turns
• Days supply on hand 

Accelerated Analytics® will give you the ability to anticipate changes in sales and inventory, so you can make adjustments before a costly mistake occurs. Our EDI 852 reporting is the best on the market. 

If you are a vendor supplying to Kohl’s, you are eligible to receive product sales activity and inventory data via EDI 852. Preparing to setup and receive the EDI 852 files can be confusing, and creating usable reports for your team can be very time consuming. Fortunately, Accelerated Analytics® provides a simple, outsourced service for all your Kohl’s EDI 852 reporting needs.

Using Accelerated Analytics® makes all your reporting headaches go away. With Accelerated Analytics®, we handle all the data conversion, database hosting and reporting. We even provide training and the end user reporting tools. 

Accelerated Analytics® benefits:

• Eliminate manual data entry and manipulation
• Consolidate all Kohl’s store data on all your SKU’s into one reporting database
• Pre-built exception reports with color coded dashboards
• No software or hardware to purchase
• Sophisticated charts and graphs

Available reports:

• This weeks sales and inventory by store and SKU
• Last weeks sales and inventory by store and SKU
• This months sales and inventory by store and SKU
• 6 week rolling sales and inventory by store and SKU
• Sell-thru
• Inventory turns
• Days supply on hand 

Accelerated Analytics® will give you the ability to anticipate changes in sales and inventory, so you can make adjustments before a costly mistake occurs. Our EDI 852 reporting is the best on the market. 

In a recent conversation with a well known CPG vendor, it became very clear that vendors are still confused by data quality when it comes to EDI 852. Simply put, vendors are struggling with the known and unknown data quality issues that exist with the data retailers send out via EDI 852. Specifically, vendors are increasingly aware that on-hand inventory levels reported in EDI 852 are often suspect at best.
 
This vendor asked a very pointed question; “Why can’t retailers get this right, and more importantly, how do they expect us to make decisions on bogus data?” This is a serious challenge and one that needs to be addressed by retailers. If they expect vendors to monitor in-stock and make accurate decisions, the data quality must improve. Fortunately, there are strategies to improve upon the data reported by retailers in order to arrive at a useful decision making tool.
 
First, each vendor has an accurate count of how many units the retailer purchased and they know when the inventory is to be shipped. By subtracting the units sold as reported in the EDI 852 from the shipped inventory units, you can calculate an on-hand value. The key to this work-around is a good starting point. In most cases, this can be determined by examining inventory history and requesting from the retailer a one time inventory position count. It’s not a perfect system, but over time, the calculated on-hand becomes more and more accurate and it is a useful decision making tool. There are other strategies as well, but we see this as the most common method for handling poor on-hand reporting accuracy.
 
What strategies are you using to deal with poor data quality?  More importantly, what retailers are you working with that are not reporting accurate on-hand?  Many times, the starting point is simply identifying what data you can trust and what data you can’t. 

If you are a vendor supplying to JC Penney, you are eligible to receive product sales activity and inventory data via EDI 852. Preparing to setup and receive the EDI 852 files can be confusing, and creating usable reports for your team can be very time consuming. Fortunately, Accelerated Analytics® provides a simple, outsourced service for all your JC Penney EDI 852 reporting needs.

Using Accelerated Analytics® makes all your reporting headaches go away. With Accelerated Analytics®, we handle all the data conversion, database hosting and reporting. We even provide training and the end user reporting tools. 

Accelerated Analytics® benefits:

• Eliminate manual data entry and manipulation
• Consolidate all JC Penney store data on all your SKU’s into one reporting database
• Pre-built exception reports with color coded dashboards
• No software or hardware to purchase
• Sophisticated charts and graphs

Available reports:

• This weeks sales and inventory by store and SKU
• Last weeks sales and inventory by store and SKU
• This months sales and inventory by store and SKU
• 6 week rolling sales and inventory by store and SKU
• Sell-thru
• Inventory turns
• Days supply on hand

Accelerated Analytics® will give you the ability to anticipate changes in sales and inventory, so you can make adjustments before a costly mistake occurs. Our EDI 852 reporting is the best on the market. 

Still messing with manual?

If you are a vendor supplying to a retailer, you are no doubt receiving POS and inventory data. Sorting out all of that data can be a real headache, considering the files can be different for each retailer. Your team probably spends hours each week manually entering data, creating spreadsheets and then preparing reports.

Accelerated Analytics® can eliminate all of this wasted time. As a SaaS, we will gather all of your POS data files automatically – no software to purchase or hardware to support.

Using Accelerated Analytics® eases your POS reporting headaches. We handle the data conversion, database hosting and reporting. We even provide training and the end user reporting tools. 

Accelerated Analytics® benefits:

• Eliminate manual data entry and manipulation
• Consolidate all retail data into one reporting database
• Pre-built exception reports with color coded dashboards
• No software or hardware to purchase
• Sophisticated, easily exportable charts and graphs

Available reports:

• This week/last week sales and inventory by store and SKU
• This month/last month sales and inventory by store and SKU
• 6 week rolling sales and inventory by store and SKU
• Sell-thru
• Inventory turns
• Days supply on hand
• and more! Just ask us.

Accelerated Analytics® will help you with accurate forecasting changes in sales and inventory, so you can make adjustments before a costly mistake occurs. Our POS reporting is the best on the market.

Retailers and vendors in today’s retail market face the unenviable challenge of reducing costs and maintaining margins, despite falling overall sales and slow-to-recover consumer demand. One of the areas in which retailers are pushing back onto vendors is inventory management, which for vendors too often translates into retail partners that reduce overall inventories and require tightened delivery deadlines.  Retailers view the supply chain as one of the key places in which costs can be reduced—or better yet, passed off onto someone else—as a means of keeping shareholders happy despite reduced POS sales.  Wal-Mart continues to set the pace in this area, reducing its overall inventories across the board, reducing its brand assortments[1], adjusting its purchasing methods[2] and imposing tough penalties on those that miss their Must Arrive By Date (MABD).[3]

Thus, the impetus has fallen to vendors to manage their supply chains more efficiently, so that the cost-savings being realized by their retailers’ inventory adjustments might trickle down to them as well instead of becoming a proverbial albatross.  And while the “glass pipeline” may remain elusive, industry experts postulate that, “Visibility of supply chain costs have never been better.”[4] Since, then, there remains continued pressure on everyone in the industry to reduce costs, there exists an opportunity now to address supply chain optimization unlike any time before.

As in all such processes, the first step in addressing this optimization is identifying the major challenges, which, while not simple by any means, can be boiled down to three major focal points:

1. Reduce supply chain costs
2. Improving the responsiveness of the supply chain
3. Managing demand volatility and Variability[5]

From an IT perspective, there are things that can be done with the data already being generated or received by most companies (even small ones!) to address some significant portion of each of these.

Reducing Supply Chain costs

While the operating costs of a supply chain are often the easiest numbers to point to, and the most difficult for IT to address, there are data sources that can be leveraged to reduce costs.  For example, purchase orders, shipping data and RTV (return to vendor) data is either generated internally or is received from retail partners (sometimes in a very straightforward EDI 812 document).  Unfortunately, for many companies, these data sources come from disparate business systems and are stored in multiple locations, so tracking a single PO from the time the order was received through the supply chain to its delivery at a store or in a DC, is an arduous task requiring proficiency in Excel and fraught with the potential for human error.  Further, when compounded by the volume of orders received that many vendors keep up with, the task of tracking becomes futile, since the actionable information it generates rarely is identified in time to take the given action, but rather is often merely a confirmation of what has already been made known by the retail partner that fined the vendor the late delivery or shorted pallet.  Thus, the lost efficiency of the analysts and the fees assessed by the retailers become additional costs in too many cases, and analysis of this data is simply not conducted.  However, those vendors that are able to aggressively track this data and address issues that may arise in a timely manner, can avoid fees and improve their relationships with their retailers.  Unfortunately, upper management often struggles to see beyond the concrete costs figures and consider these less concrete, but no less important opportunities for increased revenues or avoided fees.

Improving Responsiveness and Managing Demand Volatility and Variability

The delayed turnaround inherent in the difficulties discussed above relate directly to improving the responsiveness of the supply chain.  That is, supply chain utilization must address two areas of responsiveness:

1. Responding to existing issues
2. Responding to potential issues

Existing issues, as already discussed, are difficult to ID, due to the disparate sources of data and the corresponding amount of time it takes to collate the information and determine what issues actually exist, since addressing existing issues is time-sensitive.

Potential issues are no less difficult, since these are often identified by considering all the aforementioned data sources and then including additional data sources such as POS data (from which forecasts are derived).  Mike Griswold, VP Retail for AMR Research, says, supply chain optimization “involves better forecasting methods and moving away from looking at warehouse shipments and toward POS and online sales data.” He goes on: many vendors fail to utilize POS data effectively for addressing supply chain issues because “it’s easier to get your arms around warehouse shipments because you’re dealing with weekly or twice-weekly sources of data.  When you get to POS, you’re getting down to day-level granularity for items and stores, and creating a forecast for three or four weeks out requires a fair amount of processing power.”[6] Of course, Griswold qualifies his position—forecasting based on POS and other data sources isn’t the final step.  “Retail is not designed to be an inventory holding area,” he says. “You may [get] an order for 1,000 televisions to be deployed across 100 stores, but not every store can handle 10 of each item.”[7]

Thus, forecasts must be based on actual POS historical sales, current trends and other considered supply chain factors, and tempered by the limitations of the stores for which the forecasts are generated.  Retailers provide a shelf-space and assortment designation (called plan-o-grams, modulars, sets, etc.) for most vendors which allows vendors to consider these factors when filling orders, and combined with their own warehouse quantities and capacity, now a very comprehensive and useful picture emerges, from which one may then deduce those potential issues and act to address them, instead of reacting after they become a time-sensitive emergency.

How Accelerated Analytics® Can Help You Optimize Your Supply Chain

Unfortunately, University of Pennsylvania professor of Operations and Information Management Marshall Fisher says, the industry trend for vendors faced with the decision to have too little inventory and lose sales or have too much and be forced to liquidate, leans toward the former. “Most companies are just moving along with less inventory. They are downsizing to meet less demand and accepting higher stockouts. The risk of a lost sale is smaller than having lots of unsold inventory.”[8]

But, what if you had an integrated database solution that tied all of the disparate sources of data together into a single source of truth, from which actionable decisions could be made on timely, comprehensive data? Accelerated Analytics was first a business intelligence (BI) company and its expertise in BI solutions can be leveraged to create such an integrated database behind the Accelerated Analytics® interface, creating a powerful, yet user-friendly tool, that business users need and which management can understand.

Advantages offered by Accelerated Analytics®:

• Integrated database to tie together all your data sources (P.O. files, Shipping documents, POS data, Plan-o-gram files, and more!) in a single location from which may be derived a single source of truth.
• User-friendly reporting solution which provides rapid access to any of the data in the system and reduces the overhead normally associated with the collation and calculation of data
• Exceptions reporting to identify shipping delays, stockouts, etc. automatically as often as required.
• Proven forecasting methodology to generate proactive forecasts based on actual sales and inventory information

[1] Reda, Susan. “With SKU Reductions Under Way, Which Will Survive?” Stores.  . March 4, 2010.

[2] Birchall, Jonathan. “Walmart Aims to Cut Supply Chain Cost,” Financial Times. 3 Jan 2010.

[3] Cassidy, William. “Wal-Mart Tightens Delivery Deadlines.”  The Journal of Commerce. http://www.joc.com/node/416490. 8 Feb 2009.

[4] Lewis, Len.  “Delivering the World: Navigating obstacles in pursuit of global supply chain optimization.” STORES Magazine. . February 2010.

[5] Based on the results of a Supply Chain Leaders’ survey conducted by IGD, a London-based consultancy.  Lewis, Len.

[6] Lewis, Len

[7] Lewis, Len

[8] Lewis, Len

I sat down with an analyst at a consumer products company the other day, and had an in depth conversation with her about the process she goes through to export data from Retail Link and transform the data into reports for her management. I’ve been working with Walmart vendors for a long time, so I have a good awareness of the effort that it takes to go from raw data downloads to finished reports, but this detailed conversation was an eye opener. There were 17 unique steps to get from point A to point B and they consume about 13 hours per week. The process starts on Monday morning and reports are distributed to management before lunch on Tuesday morning. Management reviews the reports and then typically sends follow up questions and requests for detailed drill down as the week progresses. One weeks cycle runs into the next week’s, and on and on it goes.  If you’re shaking your head and saying, “yep, that sounds just like my job”, maybe you can take some satisfaction in knowing you’re not alone. Keep up the good work, knowing what’s’ happening at the point of sale is critical and your efforts are making it happen.