8 Ways Supply Chain Systems Can Minimize Markdowns, Closeouts and Lost SalesOctober 23, 2017
Markdowns, closeouts and lost sales can haunt any retailer or fashion brand. Across the industry, their collective impact is staggering; IHL Group, a retail analyst firm, estimates that out-of-stocks (resulting in lost sales) and overstocks (leading to markdowns and closeouts) cost the worldwide retail industry $1.1 trillion annually.
To minimize these profit-killers, retailers and brands must understand and react to consumer trends and real-time sales information and quickly make the necessary adjustments. This is something that can only be done with modern supply chain systems such as NGC’s Andromeda, which brings together all departments – Merchandising, Product Development, Sourcing, Compliance, Purchasing, Production, Quality, Logistics, Marketing and Sales – in a cloud-based solution that connects vendors, suppliers and other providers, enabling the Digital Supply Chain.
Solutions like Andromeda are essential to helping retailers and brands react quickly to fast-changing data and trends, in order to give consumers what they want, when and where they want it. If companies can successfully accomplish this, they’ll greatly reduce markdowns, closeouts and lost sales. What are some of the specific steps companies can take? Here are several to start with.
- Deliver the initial PO and revisions via a web portal. This will save your team hours each day. Far too many companies still rely on fax, email and spreadsheets to deliver POs to vendors. This low-hanging fruit can make a big difference.
- Maintain an audit trail of all changes to PO. Maintaining this information in Andromeda’s web portal will provide an instant audit trail, saving time and resources.
- Plan for time-phased materials requirement. Want to shave several weeks off your production schedules? Pre-positioning and time-phasing raw materials can accomplish that.
- Position inventory in multiple inventory locations with the ability to transfer. Centralized DCs are a thing of the past in today’s omnichannel world. Instead, companies must position inventory strategically in multiple locations, then transfer as needed. Products that aren’t selling in one location can be transferred to the locations that have strong demand.
- Prioritize WIP to minimize overstocks and out of stocks. Are products moving faster than expected? Then accelerate the production to reduce out of stocks. And if other products are lagging, cut your losses quickly.
- Stay on schedule with workflow calendars. Workflow calendars with alerts and escalation are a staple of supply chain management systems such as Andromeda, and they can ensure every team member is on task and meeting deadlines.
- Ditch the emails, use collaboration tools. Emails are a big drain on productivity. The collaboration tool in Andromeda can eliminate 50% of the time spent on emails and tie every communication back to the style, for a big boost in efficiency.
- Detect problems early with exception management. Don’t spend time hunting for problems – it’s like finding the proverbial needle in the haystack. Exception management, another key feature in Andromeda, will automatically alert you when issues arise.
These are some of the many ways that supply chain systems like Andromeda can help companies deliver the on-trend, on-time merchandise that leads to full-price sales. For more information, request a demo of NGC Andromeda, today.