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Smart Supply Chain Utilisation

The expansion of the retail industry across a new digital frontier has made it a challenging market place for many retailers to adapt to, with 12% of the total value of the £358 billion UK retail sales in 2016 coming through online sales (projected to increase 10% in 2017).

There remains a significant opportunity to grow or maintain market share in this new online landscape but in order to do so retailers must focus on providing a service that engages the 21st century consumer.

Increasingly, this involves giving customers the products they want, when they want them, but to do so profitably they need to reduce costs by developing strategies to improve the efficiency of their supply chains.

This whitepaper takes a look at how intelligent supply chain management allows retailers to compete by enabling shorter lead times and making them more agile in their ability to respond to customer demand.

WHAT IS SUPPLY CHAIN MANAGEMENT?One definition of supply chain management is ‘delivering a set service level to your customer by the effective management of all components in the supply chain’.

Supply chain management isn’t just about trucks, pallets and warehouses though, you can initiate improvements by being better at collaboration. When all relationships within your supply chain are managed effectively, then maximum productivity can be achieved.

And the most crucial aspect of management is the accurate and timely flow of information between all parties in the chain.

Top 3 issues regarding supply chain planning and execution**:

Increasing availability without increasing stock holding

Reducing stock holding without impacting sales

Automating key processes

62%

47%

44%

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Helps Retailers to Compete

Article Smart supply utilisation helps retailers to compete

of retailers globally highlighted

forecasting for promotions as

one of their main challenges

64%

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Trying different supply chain concepts and initiatives will benefit both small and large businesses. If a retailer is struggling to compete on price, as is often the case with small to mid-size retail organisations, a better supply chain can help them to stay competitive. WHY LOOK TO THE SUPPLY CHAIN?Reshaping supply chain management has become a priority for many retailers as the consumer becomes more informed, demanding and impatient with retailers who don’t meet their expectations.

Mid-size and smaller retailers in particular, need to compete on service and selection rather than price as they can’t afford the economies of scale that larger retailers benefit from. By maintaining competitive stock levels and reacting faster, you can stay competitive. Based on interviews with 126 retailers in a recent State of the Retail Supply Chain 2016** report, the top business issues cited by global retailers were:

• 69% forecasting effectively across the supply chain

• 64% forecasting effectively for promotions and promotional lift

• 60% forecasting heavily seasonal items

PREDICTING DEMAND AND AVOIDING LOST SALESThe complexity of forecasting increases in relation to the number of products and stores you are supplying, and forecasting software can help simplify this process and improve accuracy.

Demand for products you currently sell is worked out by a combination of actual sales plus lost sales due to out of stock situations.

Estimating demand for new lines or variations of products can therefore be problematic but a common approach is to look at the history of a similar product and use that as a guideline.

• Only 35% have a system in place that can build automatic demand forecast for promotions

• Only 22% have a system that can manage promotion stock run to clear fixtures for the next promotion

Lost sales arise through inventory not being in stock when needed. This can be due to a variety of reasons, but inaccurate forecasting is the main one and the remedy to this is to have a robust, forward-looking forecasting method.

Improvements in forecasting software have made this easier as solutions such as Dynamics 365 are designed to help retailers improve service levels and control total inventory.

HAVE YOU OUTGROWN YOUR TECHNOLOGY?If your retail business has outgrown its current technologies, then it is time for you to look at introducing advanced ERP and CRM capabilities with intelligence enabling analytics.

Microsoft Dynamics 365 combines CRM and ERP platforms under one cloud service to create a new model for businesses.

It connects sales and purchasing processes with logistics, production and warehouse management to provide real-time visibility throughout the supply chain.

By using Dynamics 365 to examine sales history, you can see where sales suffer because stores go out of stock; you can then make an estimate of potential sales that were missed in the out of stock period.

With Dynamics 365, you gain powerful inventory management tools to improve forecasting and planning, allowing you to match supply with customer demand. The result is sales and purchasing forecasts based on specific products over your chosen time period.

This insight allows you to optimise inventory levels and improve delivery. By integrating external business processes and supporting application connectivity, you improve supply and demand planning.

OPTIMISING YOUR SUPPLY CHAINWith Dynamics 365, supply chain managers gain an invaluable overview of customer and supplier account data, pricing, trade agreements and inventory, with access to reports and data.

This allows them to reduce costs by optimising supply chain management processes.

Warehouse managers gain access to tools to help them optimise item storage based on location types, space, pallet heights and temperature requirements.

Across your whole retail supply chain you can improve productivity, adapt internal processes quickly to meet new demands and optimise processes:

THE LATEST SOFTWARE SOLUTIONS FOR SUPPLY CHAIN MANAGEMENTSoftware solutions for managing the supply chain have dramatically improved over the years and with the advent of Dynamics 365 retailers now have access to specific, industry-relevant features.

A thorough review of your business and supply chain is needed to successfully implement new technology, and many retailers are finding that by fully integrating their ERP and CRM software they are solving multiple issues with one solution. The supply chain lies at the heart of every retail operation, and an efficient one can provide a significant competitive advantage. Smarter supply chain management gives retailers the tools to lower stock holdings and raise service levels.

Control and streamline inventory

Increase visibility throughout the supply chain

Give users real-time data via a user-friendly interface

Gain access to critical business intelligence and custom reports

Use forecasting applications to improve stock availability

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of retailers have a system that

can build automatic demand

forecast for promotions

35%

Article Smart supply utilisation helps retailers to compete

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SOURCES:

*Retail Economics: UK Retail Stats and Factshttp://www.retaileconomics.co.uk/library-retail-stats-and-facts.asp**Martec & RELEX Solutions present ‘State of the Retail Supply Chain 2016’ report

ABOUT HSO

HSO is a Microsoft Gold Partner with over 25 years of experience in implementing Dynamics solutions. We’ve been named a member of the Inner Circle for Microsoft Dynamics partners for nine consecutive years.

Specialising in implementing, integrating, optimising and maintaining ERP and CRM solutions based on Microsoft Dynamics AX, Microsoft Dynamics CRM and Office 365, we’re ahead of the game when it comes to the introduction of Microsoft Dynamics 365.

Learn more at: www.hso.com

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