- Increasing Focus on the Consumer: Retailers are recognizing that SBT is not the end, but rather the means to an end, with the ultimate goal of focusing on consumer take-away. Retailers are determining their strategic objectives up front and structuring programs that suppliers can support. For example, retailers who want to reduce assets and operating costs through SBT will have more resources to invest in a better customer experience.
- Collaboration Is Coming of Age: The greatest competitive advantage often emerges from true collaboration among trading partners. Retailers and suppliers are agreeing on details like item, price, promotion and shrink at the onset of an SBT relationship. Successful SBT systems are utilizing advanced commerce platforms that align trading partners and increase supply chain efficiencies.
- The Growing Demand-Driven Environment: As the supply chain market evolves, retailers and suppliers are moving toward a demand-driven supply chain that brings partners closer together to collaborate on supply and demand. SBT is an ideal solution for trading partners to integrate into their existing supply chain systems to promote a consumer-centric environment.
- Supplier Adoption Is Critical: Retailers are demonstrating to suppliers that SBT results in increased sales, inventory reduction, and fewer deductions and invoice discrepancies. In addition, creativity is key in encouraging supplier adoption. When one retailer asked its suppliers to participate in its SBT program, it agreed to take responsibility for shrink.
- Expansion beyond Direct Store Delivery: Once primarily used for direct story delivery, forward-thinking retailers are expanding SBT to the warehouse. This is where the largest amount of inventory sits for both the retailer and supplier and, therefore, where the largest opportunity exists for reducing the costs associated with inventory.
Additional Articles of Interest
The focus in the retail sector has shifted from managing the movement of goods to managing the information about goods. Read more in "Ramping Up the Retail Supply Chain," in the February/March 2005 issue of Supply & Demand Chain Executive.
- More articles about Prescient Applied Intelligence.