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- August 26, 2011 -


Supply Chain Graphic of the Week: Technology for Managing Network Inventories


63.8 Percent of Respondents in CSCO Insights Study Say Their Tools are Average or Worse


By SCDigest Editorial Staff



We all know that supply chain network complexity is growing, driven by globalization, SKU proliferation, multi-channel strategies, and moire.

That in turn puts even more pressure on inventory management in the face of that froqing network complexity.

Additionally, companies increasing realize that managing inventories "one node at a time," rather than holistically, is never going to lead to top-level inventory performance. Hence the interest in such tools as "inventory optimization" software, and improved visibility, to deal with multi-tier inventory management.

CSCO Insights tackled all these issues and more in a recent Supply Chain Executive Brief titled Five Strategies for Reducing Supply Chain Network Inventories. Taken from that report is the graphic below, in which 250 respondents answered a question about how good the state of their current technolgy is to manage the challenges of netwrok inventory management.


As can be seen, just 6.1% thought their current technology as Excellent for managing network inventories holistically. Conversely, 63.6% viewed their current capabilities as eith Average, Not Very Good, or Poor.

This and a whole lot more is in the full report, available here: Supply Chain Executive Brief: Five Strategies for Reducing Supply Chain Network Inventories.


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Oct. 3, 2008

There are valid reasons for both the DC and DSD distribution models, but neither should determine the store assortment, which depends on the consumer.

The Distribution Center model makes sense when you have many prepackaged products which are continuously replenished and require little in-store servicing. With the facility justified, you can also add seasonal and holiday 'in and out' products which can share the distribution network.

The key is to manage the time supply of inventory in the warehouse and distribute it efficiently.

The Direct Store Delivery model can be implemented purely as a distribution method or also allow the manufacturer to manage some of the in-store merchandizing.

I do not see any advantage of using DSD simply to deliver merchandise. Although it may help the 'mom and pops' that are on the same route as a large retailer, the DSD model must be more expensive. Once the big drops are removed, it will become more costly to reach the independent retailers but the larger retailer must benefit.

If DSD is used to support in-store merchandising, then you have a different story. The manufacturer's representative can give their products the individual attention that increases their sales. The bad thing is that they can also load up the store with inventory if no one is watching.

Bill Bittner
BWH Consulting


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