the downturn, while smaller rivals, either lacking
resources or foresight, did not.
The result is a tale of two inventory scenarios, Cox said.
“The big retailers are lean because they’ve learned how to
do it,” he said. By contrast, smaller companies may appear
lean, but that’s due as much to management’s cutting back
on orders after the recession as to any proactive measures.
“They reacted one way [after the downturn], and they
are still worried,” he said, referring to the smaller retailers.
Cox said the next big push in information technology
(IT) systems will not be in forecasting, but in tools that
enable efficient distributed order management.
Multichannel retailers today have access to software
enabling them to determine the best location from which to
fill an order, Cox said. For example, a retailer with overstocked SKUs at a store location can leverage e-commerce
orders for the same product and ship the item from the
store, rather than redeploy it to the distribution center. This
would enable store inventory to work harder and more
cost-effectively, he said.
Multichannel retailers need this flexibility to compete
with an e-tailer like Amazon.com, whose efficient online
model has forced all retailers to compress their fulfillment
and delivery schedules. “Many retailers have been asleep at
go figure …
10. 6
The January scorecard of trucking conditions compiled
by consultancy FTR Associates. A reading of 10 or higher indicates truckers will have strong pricing power for
months to come. The reading is the highest since 2004.
SOURCE: FTR ASSOCIATES
the switch” as Amazon has gained significant retail market
share in the last two to three years, Cox said.
Cox said that even the less-efficient, more-reactive retailers are adopting leading-edge technologies and processes,
and that they run their operations more cost-effectively
today than they did five years ago.
Given the inexorable march toward global digitization,
those companies “will be more efficient five years from
now than they are today,” Cox said. As a result, the days of
inventories driving macro-economic activity are likely
over, he added. ;
—Mark Solomon
