Colleen Rose, Group IT director, The Smollan Group
All too often the terms “technology” and “supply chain” conjure up images of one impacting on the other in the manufacturing, warehousing or distribution processes. This is not incorrect or inaccurate, just incomplete. Yes, technology plays a vital role in those arms of the supply chain, but what impact does it have on in-store process, the proverbial “last mile”?
Seeing as the positive influences of technology in manufacturing, warehousing and distribution are relatively well known and understood, let’s look for a moment at a neglected area. In-store operations are most often hampered by the fact that they are carried out in a retail environment by staff who are mostly not employed by the retailer and managed by a third party. This makes employee contact and communication extremely challenging at the best of times.
In this most crucial part of the supply chain - after all, there would be no supply chain if there were no retailers to supply to - where direct contact is made with the shopper, communication is critical to ensuring the smooth operation of upstream processes. Yet, because of the degree to which staff are removed from everyone involved, there is a high potential for shop-floor messages failing to reach anyone who can action them; retailer, manufacturer, even direct line management.
It is here that technology can play a pivotal role, smoothing the communication channel between those working on the ground and those managing them, and ensuring that feedback from the shop floor is accurate, timeous and channelled correctly.
Sanity in your palm
There are numerous activities in the store where mobile technology can significantly improve communication channels and so contribute to improvements in supply chain efficiencies. Take a simple PDA for example. The personal digital assistant is nothing new to the world, with many reasonably well-to-do people boasting one on their belts.
Introducing this device onto the shop floor opens up the opportunity to apply technology to order taking at the face-to-face, customer level. In 2002, a study presented at the Efficient Consumer Response forum, estimated that in the South African fast-moving consumer goods (FMCG) industry, credit notes added a staggering R1,5 billion to the cost of the supply chain. With this figure three years old, and the likelihood of it not having improved much since then, it should be crystal clear that by facilitating a basic operation such as the order process, greater accuracy and efficiency are ensured, and larger saving are possible.
By using technology to ensure logical processing behind the order process, the occurrence of credit notes can be significantly reduced. Field marketing organisations that are responsible for order taking in stores are themselves using technology to validate orders at the time of placement and using GPRS and other mobile data services they are able to validate prices, check stock availability and transmit orders instantly.
PDAs can also be used to record information in-store that will assist everyone in the supply chain. For example, information can be gathered about what promotions are active in-store; whether new products that were due for launch have arrived or not; what products seem to be selling faster than others; which products sell the fastest at certain times of day or on particular days in the week; what is out of stock; what is not moving off the shelves; or what batch of products have a problem. Information collected can assist field marketers to maximise the effectiveness of the manufacturer’s advertising rands by ensuring the best possible execution of promotions.
A voice in the darkness
Another technology that can facilitate the flow of information from the in-store personnel to the rest of the supply chain is interactive voice response or IVR. Where a contact centre has this ability it can be used as a channel for information about the “last mile” to ensure smooth operations further upstream.
Field marketing organisations are also starting to make use of analysis and business intelligence (BI) products, and geographic information systems (GIS) to assist the manufacturer in ensuring a product is targeting the correct market by selling its goods through a particular store. By analysing in-store data using predictive models and geographic analyses, and advising the manufacturer on various aspects such as stock movement and promotional effectiveness in a particular store, the field marketing organisation can assist the manufacturer in ensuring that stock is constantly on the shelf and that promotional spend is correctly targeted.
The in-store environment, traditionally the domain of manual operations, stands to benefit from the introduction of simple and well established technology, taking the once rocky, bumpy last mile and making it a smooth and dreamy ride.
Colleen Rose, Smollan Group, 011 640 8000, firstname.lastname@example.org
Usman Aly, Predictive Communications, 011 608 1700,
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Status: 18. Januar 2008