Global Sourcing Uncertainties Continue Amid Brexit, Commodities Market Slump and Currency Fluctuations, Reports CBX Q3’16 Retail Sourcing Study

The continued uncertainty in Europe over Brexit, rising wage pressures in low cost sourcing countries, low commodity prices, weak freight transit  and major currency fluctuations are shaping a rather grim sourcing and supply chain outlook, according to CBX’s Q3 2016 retail sourcing report. In fact, the aforementioned results are in line with EKN’s own Q2 2016 retail private label sourcing study that indicates significant headwinds being felt by retailers in terms lack of speed to market, global commodity price sensitivity, high merchandise unit costs, among other business pressures. While other uncertainties across economic indicators, manufacturing activity, currencies, transit and commodities are evident, CBX’s report indicates that Brexit’s true impact will play out in the next two years. It remains to be seen how Brexit will impact retailers and their trading partners that do multi-country sourcing or deal in trading with or through UK and other European countries. The report provides useful synthesis of varied economic and supply chain indicators that can impact overall retail branding and private label private sourcing. The data has some particularly useful insights and implications for apparel, fashion, specialty and other softlines companies that source products from low-cost international countries through their own buying offices or agents. Nearly 1 in 2 retailers (45%) source through their own international operations or buying agents like Li & Fung1. Among the top 8 global sourcing impact points covered in CBX’s report, most do not indicate a positive Q2 performance. Moreover the outlook towards forward looking macro-economic measures (i.e. infrastructure, labor etc.), manufacturing indices and freight demand scenarios do not seem that positive either, except for a handful of...

Supercharging Omni-channel Supply Chain Transformation

Retailers could lose up to 10% of their revenue by not being Omni-channel, and the biggest component of the loss in sales is the lack of inventory data accuracy (accounting for up to 6.5% of lost sales)[1]! This is a huge number, especially when retailers are struggling with shrinking margins, growing competition and rising customer expectations. One of the key capabilities to enable Omni-channel retailing is to posse an integrated, agile, efficient and innovative supply chain that enables timely sourcing and pick-pack-ship operations for each inventory unit that is linked to an associated purchase order, order invoice and advanced shipping notice. The supply chain is the backbone of retail operations and is viewed as a key enabler to reducing cost of sourcing, procurement, order management and fulfillment, thereby enhancing profitability and on-time customer experience. Especially in the Omni-channel retail climate, where consumers are demanding seamless shopping experience irrespective of channels, the seamlessly integrated supply chain sits in the power position. Potential initiatives could cover various areas such as automated order visibility, picking technologies at distribution centers, exploring variations on “click and collect” formats and/or working with suppliers and 3rd party carriers on supply chain transformation. While retailers re-engineer their supply chain and suppliers’ network, it is equally important to quantitatively measure the impact to show improvements in the process. Experts believe that implementing supply chain performance indicators or metrics is one of the simplest, least expensive, and least time-consuming activities. However, measuring supplier or supply chain performance is something that is often done discontinuously and ineffectively. Having a unified order fulfillment process could lead to 10% y-oy improvement in the...

Today’s Retail Supply Chain Does Not Meet Omni-channel B2B and B2C Order Needs

Growth of online and digital commerce not only poses an integrated inventory problem in the store but also a visibility and collaboration problem for retailer and extended supply chain teams. This hampers customer service and escalates supply chain costs every day. EKN’s Q4 2014 survey of 95 retailers indicated that 1 in 2 retailers are processing both business-to-business (B2B) and business-to-consumer (B2C) Omni-channel/online orders in their supply chains today. Despite process automation in areas such as order capture, receiving, storage, processing, transportation etc. as well as inventory updates for the supply chain partner ecosystem, improving order cycle time (47%) remains the foremost business challenge for retailers. With relentlessly high in-bound fill rate needs and increased distribution center and sales channel service-level requirements, the pressure of managing Omni-channel supply chain visibility and collaboration is immense. Retailers believe that better control of inventory and end-to-end order visibility should be the top investment areas to alleviate order delays and cost control issues in the supply chain. However, such investments need corresponding business process improvements for not just retailers but the entire supply chain ecosystem. This ecosystem comprises of buying agents, raw materials suppliers, finished goods providers, testing or inspection company, customs broker, freight forwarders/3PLs etc. Use of legacy ERP systems and spreadsheets for handling supply chain orders creates a disjointed view of orders. Retailers and their partner ecosystem can create one view of order and inventory by enabling web and mobile process workflows for accurate and uniform real-time information flows related to sales order capture, inventory counts and purchase order management. Following which, retailers need deeper coordination across logistics channels and fulfillment...

Thriving in the Omni-Supply Chain Via Network Effect

Download this Point of View to understand the impact of building a strong and assured supply chain network effect, enabling supply chain and inventory visibility and agility and optimizing the network effect through the right set of process capabilities, analytics and technology enablers that facilitates supply chain transformation. Download Full...