4. Create dynamic, not static, plans
Companies want a planning process that is dynamic, not static. As more information becomes available and new insights are gained, retailers must have the flexibility to revise and update their plans. It is important to remember that any changes will impact other plans, both downstream and upstream. For instance, a regional product promotion likely will increase sales in that region, which will result in financial and inventory changes throughout the organization. With good tools in place, retailers can update their plans and perform "what-if" analyses, and immediately see the impacts of changes across all affected plans.
5. Achieve supply chain visibility
To build a highly efficient and intelligent supply chain, the retailer needs end-to-end visibility to see the effect of any decision on all aspects of the supply chain, from vendors and distribution centers forward to POS. New-generation planning solutions enable that visibility by tightly integrating with the supply chain, translating plans into execution and operating within any existing constraints. For instance, few retailers ask their vendors to deliver inventory in optimal case packs so it can flow through the supply chain without having to be broken down and repacked for individual stores. Actions such as these make more effective use of supply chain assets and lead to better buying and allocation decisions.
New-generation planning solutions give retailers the information they need to make more intelligent, better-quality decisions. By automating the basic elements of planning and inventory management, retailers can focus on responding quickly and appropriately to exceptions.
Advanced planning is a journey. Few companies have achieved the total vision; most are tackling it one step at a time. But the benefits we will reap down the road are well worth the investment now. Many companies that have already embarked on the journey report fewer markdowns, fewer lost sales, greater responsiveness to demand trends, greater supply chain efficiency and lower inventory levels throughout the enterprise. But perhaps most important of all, better planning delivers a better shopping experience and, in turn, preserves customer loyalty, which is key to business success in the highly competitive retail environment.
About the Authors: Ajay Chidrawar is a director in i2's Solutions Marketing organization. Adam Hatch is director of marketing for i2's Retail industry group. And Chuck Kramer is the senior vice president and general manager for i2's Retail industry group. www.i2.com.