Perfecting the Last 100 Feet
The battleground for the maximization of customer satisfaction depends to a large extent on execution between the receiving docks of a retail store and its checkout counters. The steps taken in that final lap of the consumer electronics supply chain are burdened by cost, inaccuracy and time spent tracking product flow and taking physical inventory. The problem is exacerbated by inadequate business processes, lack of synchronized information, quality of employees and the reality that information cannot be economically and accurately gathered at the necessary points in the process.
Mark Fisher, vice president of Strategic Initiatives for the Entertainment Merchants Association (EMA), estimates it is costing the home entertainment industry nearly $330 million in lost sales where the retailer bears 43 percent of the cost of out-of-stock DVDs and the supplier about 32 percent.
The often-quoted “Bull Whip Effect,” which magnifies the small kinks at retail to considerably larger magnification in the supply chain, epitomizes the fact that insufficient visibility of inventory and non-real-time information have a disproportionate impact on stock-outs, inventory turns and product returns. The problem is amplified for CE products that are promotionally driven and must hit the store shelves at exactly the same time as the ads hit the airwaves and weekend tabs.