The Covid-19 pandemic caused massive disruption in the retail space, and in the wake of lockdown there has been a significant shift in customer demand.
By Andrew Dawson, MD of Cognizance
The challenge is that, with current ERP systems, reporting is only generated once a month or once a quarter, which means that any issues are not identified quickly.
Without real-time insight into these changes, distributors are left in the dark and can end up losing large sums of money as a result of dead stock that is not selling. The solution is intuitive analytics that plugs in to existing ERP solutions to deliver fast, agile insight needed to optimise the supply chain from start to finish.
Getting the product mix right
Distributors need to ensure that they have sufficient stock to supply wholesalers and retailers with the products that consumers need. However, holding stock is a delicate balancing act. Warehousing costs money, and stock that does not move erodes already extremely tight margins.
Understanding the rate of sales and being able to cater precisely to this is key to success in the distribution channel. However, without visibility and analytics at a granular level, it is impossible to perform the necessary deep dive into product mixes.
There is an enormous opportunity for improvement here, to understand what stock is being held, what is selling, and where they may be holding excess stock that costs money rather than making it. Mapping demand accurately to the market enables the product mix to be optimised and storage efficiency improved, for greater profitability.
Hindsight is not insight
One of the barriers to achieving the optimal product mix is the way data is kept and reported on. The typical supply chain environment does not provide a holistic view of information but rather consists of multiple siloes of information from a variety of different modules, including ERP systems and third-party applications. Reports are generated on data from the various systems on a regular basis, and these reports form the basis of analysis for distributors.
However, they are typically run monthly and quarterly, by which time issues have already been occurring for some time. Distributors can thus only react after the fact, in hindsight, and the result is that losses have already been incurred. They are also based on disparate data, so it is impossible to obtain an overarching view of the entire supply chain environment.
In order to optimise the supply chain and maximise margins, it is essential to become proactive rather than reactive and move from hindsight to insight, which in turn requires real-time, intuitive analytics.
Intuitive real-time analytics changes the game
Pooling these disparate data sources into integrated pipelines is the first step, as this is key to mining data intelligently and holistically across the supply chain from warehousing to logistics, manufacturing to delivery and beyond. Intuitive analytics also needs to be able to integrate with ERP systems seamlessly, to provide daily analysis of sales and stock not only in warehouses but at various retailers as well.
Once this is in place, it is possible to perform cost analysis on distribution, revolutionising the ability of distributors to accurately manage and predict sales, forecast trends and anticipate changes in consumption and demand. This level of agility is key in an uncertain post-Covid world.
Empowered by a live, interactive dashboard with intuitive analytical capabilities, distributors can quickly and proactively remedy any deviations, smoothing the path for optimised warehousing and distribution.