Analytics
Analytics is "a big, hot area in 2005," says McCabe, with companies looking for better inventory management from more accurate forecasting. Mark Jeffrey, commercial/retail sector manager at business intelligence software vendor SAS says improved forecasting can reduce costs and allow optimisation of reordering schedules. Sophisticated analytics software is capable of handling such complexities as seasonal factors-for example, taking into account the way Easter moves from year to year.
Retailers can "replace physical inventory with information" says Tom Sherlock, managing consultant, IBM Business Consulting Services, reducing safety stocks while maintaining or improving service levels. Retailers and suppliers have good reason to collaborate as they want better on-shelf availability and each has part of the data needed for forecasting.
Australian grocers are developing common data with their suppliers to make the supply chain work more effectively, but their master data is often split across multiple internal systems: "Retailers have got quite a long way to go towards a comprehensive system for managing their master data," says Sherlock.
Integration of trading partners' systems is "one of the most fundamental challenges in supply chain in Australia," says McCabe, echoing Schrooten's concern. While there is lots of activity, it is a slow and expensive process, and it is difficult to go beyond the biggest trading partners.
James Malizis, senior director of solutions consulting at Manugistics says collaborative planning, forecasting and replenishment (CPFR) is gaining attention from local retailers such as Coles Myer. Store-level daily replenishment planning is computationally intensive and there is a very narrow processing window. In collaboration with IBM, Manugistics has demonstrated the generation of a 42-day replenishment plan for 38 million stockkeeping units within one hour.
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