SOURCE: Aberdeen Group

Aberdeen Group

October 13, 2009 10:00 ET

Retailers Executing Demand-Supply Network Improvement Strategies to Eliminate Historically Low Inventory Turns

Demand Forecasting, Warehouse Management, In-Bound Distribution, and Multi-Enterprise Inventory Management Are Key Areas of Focus in the Supply Chain

BOSTON, MA--(Marketwire - October 13, 2009) - Between August and September 2009, Aberdeen Group, a Harte-Hanks Company (NYSE: HHS), surveyed 153 retailers to reveal that 76% of retailers pursue multi-tier and multi-enterprise retail supply chain operations, thus the extent of process management complexity in their supply chains is high.

The process of balancing the demand-supply network of retailers is one of the foremost process-related capabilities for 69% of leading retailers. This capability is also the most cumbersome and time-consuming for the rest of Average and Laggard retailers. "For Average and Laggard retailers the lack of process integration capabilities has created a gap between supply chain planning, distribution and logistics, and merchandising stakeholders. The need for enhanced process integration capabilities and executive-level cohesiveness is acting as a barrier impacting current demand-supply network integration, visibility, and collaboration objectives in retail," says Sahir Anand, Research Director, Retail, Hospitality, and CPG Research.

"Applying a new, systematic way of thinking to manage today's retail supply chains can help retailers to build highly competitive and synchronized demand-supply networks for future success," says Anand. Aberdeen analysis signifies that retailers must focus on the three key imperatives for optimizing the retail supply chain:

--  Consumer demand response. The critical components of understanding
    holistic consumer demand require intensive mapping of the internal demand
    planning organization with the integrated view of sales channel demand-
    related data from sources including POS transaction data, shipping data,
    syndicated secondary consumer data, EDI or trading partner data.
    
--  Collaborative supply chain. A demand-driven supply chain management
    strategy takes into consideration the rising importance of this process for
    succeeding in the multi-enterprise supply chain, especially in difficult
    economic times. Integrating varied data resources is by no means trivial.
    
--  Integrated planning and execution of retail supply chain logistics.
    Visibility and responsiveness have become the necessary ingredients for
    success in today's multi-tiered supply-demand networks in retail. Leading
    retailers are able to achieve the level of responsiveness needed to manage
    supply chain disruptions and risks such, as the recent credit squeeze that
    impacted 75% of retailers.
    

The top strategic action identified by leading retailers to address the increased supplier lead time complexity is "increasing collaboration initiatives with suppliers." According to Nari Viswanathan, Vice-President and Principal Analyst, Supply Chain: "Leading retailers are moving towards more balanced demand-supply processes. Other companies also need to increase the extent of collaboration on both the demand and supply sides of their business networks."

A complimentary copy of this report is made available due in part by the following underwriters: RedPrairie and QLogitek. To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=6189.

For additional access to complimentary Retail Research, please visit http://research.aberdeen.com/index.php/-retail

For additional access to complimentary Supply Chain Management Research, please visit http://research.aberdeen.com/index.php/-supply-chain-management

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

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