I know the early followers of this totally cool blog are anxiously waiting to read about all things Cloud at Solvoyo, but we are taking a brief intermission to get my take on the Retail Industry Leaders Association (RILA) Conference in sunny San Diego, CA.
The retail supply chain problem is very complex and dynamic. All the moving pieces starting from the customer pulling millions of different products through multiple echelons of production, supply, inventory and distribution all connected by a multitude of transportation options explains why 1,000+ people gather for 4 days to share.
The hot topics in retail supply chain right now are omni-channel demand fulfillment and effective inventory management. As much as I love to talk about math and the methods we use to support tough business decisions you can only imagine how thrilled I was to have a captive audience of 1,000 who were actually compelled to listen. Admittedly I did hear more than once “I’m not sure exactly what you mean by multi-variate exponential smoothing, but it sounds like something we need in our planning and replenishment process.”
My top 2 take-aways:
1. Omni-channel is still quite new and is actually being defined by how it is being implemented more so than by following an agreed upon template. After listening to exceptional insights from brilliant minds at Target, Sears Holdings, Lowes, Belk and Wal-Mart among others I came away with a common theme: Omni-channel is a new definition of service in the customer experience that must be supported by a highly adaptable fulfillment system.
This problem is a perfect fit for multi-objective optimization. The Solvoyo solution can sequentially maximize demand fulfillment, profit / margin, revenue and then minimize total cost to fill. Analytical support to determine not only what to offer but the optimal way to execute the offering pulls it all together.
2. Effective inventory management requires a comprehensive view of every aspect of the value chain. Inventory in motion (inbound from the supplier), traditional inventory buffers (warehoused safety stock) and store inventory (cycle, display and shelf stock) are all critical elements of the product availability and capital investment balance equation.
As described previously in this space, the Solvoyo solution incorporates inventory target setting in the network flow optimization formulation so we are very well positioned to support break through inventory performance.
I would be remiss if I didn’t send a shout out to San Diego’s craft beer scene. There are too many AWESOME brewers to mention here but to honor the group a home brew version of Ballast Point’s Sculpin IPA is joining my personal rotation!
Logistics are part of supply chains. The purpose of a supply chain is to do one thing – enable a company to grow. However, focusing only on transportation will reduce costs but invariably will cause issues in other areas.