Retail Industry:Supply Chain Structure
The retail supply chain has a unique structure because it is driven by product flow across the supply chain. The fast moving nature of sales, the accentuated importance of availability and the complexity of managing uncertain demand levels are further exacerbated by the perishable nature of many of the goods passing across the supply chain.
All supply chain inefficiencies are heightened as order delays or inaccuracies don’t just build delays into the supply chain–as with other industries–this directly affects the retailer’s ability to conduct business and offer a level of service to customers.
The retail industry was one of the first to automate its orders and invoices. More recently, the struggle has been for retailers to accommodate increased delivery frequencies and increased stock-keeping unit (SKU) counts offered by DSD suppliers. Using EDI to automate the DSD process can relieve congestion at the retailer’s back door and reduce check-in times.
The key to all of this is the advance ship notice (ASN). According to research from the Grocery Manufacturers of America, electronic ASNs slash receiving times by up to 60%. If just one quarter of deliveries use automated ASNs, a 250-store company can save 65,000 receiving hours each year. The ASN can ensure that every step of the supply chain is fully informed on the status of the goods and goods can be checked at a pallet level as if it was at an individual case level.
However, for this process to be successful there needs to be effective GDS across the supply chain. Suppliers need to be able to maintain a fully aligned master file at an item level in order to facilitate the exchange of item information, authorization, cost, and price and promotion information. With GDS, retailers can readily identify discrepancies, unauthorized items that were delivered, and differences between orders and deliveries.
The result is that retailers have better in-stock positions and problems and errors are rectified quickly–often early in the supply chain process such as the dispatching distribution center.
