We’ve all heard the quote about how not understanding the past dooms us to repeat it. In supply chain, that means understanding what’s happening, not only historically, but also right now. Beyond avoiding the doom of a past you don’t want to repeat, there’s always a move to improve. That means collecting data. Whether improving on good performance or avoiding past failures, you have to know what’s going on before you can do something different.
True improvement requires capturing data to support the decisions necessary to making logistical course corrections that impact profitability. Thorough data collection allows you to connect the dots in critical known areas as well as leverage areas you may not have previously seen as interconnected. It’s easy to see how returns data from last year’s holiday season give you a feel for planning this year. But in the demand-driven response time wrought by online sales, it becomes important to have a finger on the pulse of what’s happening now and not missing opportunities.
Gathering real-time supply chain information can be critical with online sales, regional demand spikes or drops (think hurricanes and harsh winters), as well as new product launches and promotions. That’s just the tip of the iceberg.
Whether you want to know what’s going on now, or to effectively plan year-over-year, you have to be collecting data.
Historical data make a huge difference in long-term planning, but more immediate, real-time strategies can also be impactful. The right data captured on returns and real-time tracking of issues can allow in-process adjustments that can be the difference in salvaging a make-or-break situation. For example, say you have an easily corrected packaging issue or a handling/damage issue causing damage on a new product. Access to the right information as it happens gives you earlier awareness and response, eliminating a non-product issue from further impacting success of the launch.
What data do you capture in your returns process? Do you know why shoppers returned the product? Was it packaging, expiration, damage/product condition, shelf positioning or any other issues that could be corrected in a reasonable time?
Thorough data collection can bring together areas you hadn’t previously thought of as related. Value can be found in connecting what may be thought of as disparate data sources. Product performance in the marketplace can often be related to supply and logistics issues. For example, warehouse or distribution center inefficiencies with reverse-bound product can impact space availability and movement of forward-bound product, resulting in backups that affect timely restocks and on-shelf availability. Do you know where your potential reverse-logistical clogs are?
Such issues can mean, for example, product doesn’t reach stores quickly enough to match demand created by a promotion, resulting in lackluster promotional performance and customer dissatisfaction due to the lack of availability. Also on the promotions front, returns data from a promotional period goes a long way toward helping drive plans of product volume for the next promotion on that product.
During high-volume periods like the holidays, if you’re collecting data to keep an eye on the supply chain, you can strategize real-time adjustments to meet consumer demand as it happens. Knowing what’s where at what times, coupled with volume demand trending can enable greater agility. It can give you more capability to predict and prepare for opportunities to shift stock from lower-demand to higher-demand regions, or between in-store and online channels, for example.
Aside from meeting demand in high-volume areas, that kind of real-time demand agility gives you the ability to keep product from languishing in low-demand regions, where it might otherwise wind up in landfills if it doesn’t move.
If we really want to talk about not being doomed to repeat history, we have to talk about causal and failure data. Strong root-cause analysis not only gets to the heart of what happened, it avails opportunities to see beyond one product or process to improvements that may affect everything that moves through your supply chain. When you have product damage issues, following that product from factory to store can uncover handling issues, packaging needs and processing inefficiencies.
It all boils down to this: when you completely understand what happened and what’s happening right now, the right data-collection strategy is the fuel that powers the improvement engine, whether you’re avoiding the doom of repeating history or working to repeat successes. Making the right decisions means having the best information, and it’s all right there in your supply chain waiting for you to see it.
What are your challenges with collecting data in your supply chain? Tell me about it in the comments section below.