BY JAMES COOKE, EDITOR AT LARGE
techwatch
Supplies on demand
GETTING A GRIP ON CONSUMER DEMAND HAS LONG
been a challenge for manufacturers and retailers. But
advances in forecasting software are making it easier for
managers to determine how much stock will be needed in
both the warehouse and the stores to meet customer
demand. Today, a number of well-known supply chain software vendors such as Oracle, JDA, and SAP along with specialty providers like Churchill Systems and Teradata offer
advanced demand forecasting software.
As more companies invest in software designed to better
align supply with demand, the result will likely be a significant shift in distribution operations. “People are looking to
get more real-time data to do more
real-time forecasting to figure out how
to replenish,” says Gartner analyst Mike
Griswold.
A few European retailers are showing
the way, taking advantage of the granular level of real-time demand information to revamp replenishment practices. The demand signals originate
with the retailer, who must be willing
to share with suppliers its point-of-sale
(POS) data, information obtained
when a checkout clerk scans the bar
code on an item being purchased.
Griswold told me that a couple of
European food retailers are feeding
store sales information into a central data collection and
ordering system every 15 minutes to track demand. The
central data warehouse records details on the type, size,
style, and make of each item sold. That aggregated store
information is then used to place item restocking orders
with suppliers.
By way of example, Griswold cited the case of a well-
known British retailer that has begun using the aggregated
real-time information to restock its stores via a daily late-
afternoon delivery run. Those afternoon deliveries ensure
that store shelves are fully stocked when evening shoppers
arrive. “Depending on what you get for that demand signal,
you can incorporate what happened four or five hours ago in
the late-day delivery, which is especially important for
[restocking] promoted items,” said
Griswold.
