Why Supply Chain Execution is Today’s #1 Priority

Why Supply Chain Execution is Today’s #1 Priority

August 9, 2016

Reuters recently reported that Target “is asking many suppliers to take on up to an extra 3-5 percent of the cost of promotions and price cuts after slow sales so far this year.” The article noted that Target made the move to “minimize the impact of markdowns on profit in a tough year as middle-income customers make fewer discretionary purchases.”

Target isn't alone, Walmart and other big retailers are also imposing tougher delivery deadlines and penalties in response to weak demand and sluggish sales. And other retailers will soon follow. Retail sales and profits are down overall, and retailers are forced to resort to discounts and promotions in order to entice consumers to buy.

What can suppliers do? The answer is simple: focus on supply chain execution as if your life depends on it. Because in a very real sense, it does.

In today’s unforgiving retail climate, the message to brands and manufacturers is clear: Supply chain execution must become your #1 priority. Without it, you stand to incur huge financial penalties – and possibly lose your most important customers.

Luckily, a new generation of supply chain management systems is helping enterprises break through their organizational barriers and improve supply chain visibility and transparency. NGC’s Supply Chain Management (SCM) solution connects the data and systems in an organization to drive better decision-making and faster turnaround time – turning SCM into an enterprise platform that helps brands optimize lead times, control costs, improve profitability and meet the new mandates from retailers.

Without better supply chain execution and true transparency, production issues – quality problems, delayed shipments on raw materials, overbooked capacity, test and inspection failures and much more – can’t be shared before problems escalate into full-blown crises. When companies have to sort through mountains of spreadsheets, emails and faxes, they face delayed shipments, rush charges for overnight shipments, and a failure to meet required delivery windows, resulting in drastic financial losses.

And without proper visibility, they can miss key demand signals that tell them when to accelerate production on best-selling, profitable merchandise and when to cut their losses on products that are headed to instant markdowns. However, with an SCM system that connects design, finance, sales and production data in real-time, brands and retailers alike can help ensure on-time deliveries, quickly react to the latest sales information and make the most of every season.

In the new realities of retail, supply chain execution isn’t just the key to thriving – it’s the key to survival. Find out how NGC’s SCM Solution can help