- February 27, 2018
Retail Sourcing Optimization in a Highly Competitive Industry
Written by Mark Hudson, February 27, 2018
The retail industry is a highly competitive industry which operates on a very tight margins. Private label retail sourcing teams need to be on the top of their game and creating an extended network value chain is one way to stay ahead of the curve. In the retail industry, supply chain cost sare a significant variable of a typical retail cost structure. Supply chain cost account for approximately 33% of the total cost of a private label product. While most retailers are focused on increasing same store sales they tend to overlook that marginal supply chain savings could result in superior ROI.
Optimizing retail sourcing and supply chain practices through today’s innovative sourcing management tools can help to:
Centralize retail sourcing efforts for strategic total sourcing management that eliminates over spending, and increases buying power with supplier partners across the organization.
Improve retail sourcing visibility, enabling collaboration to provide the opportunity to shift from end of production control to risk based quality assurance starting at product conception.
Leverage product sourcing software enabling quotation/supplier decision optimization techniques while reducing sampling, negotiation and final commitment.
Enlist supplier involvement in the retail sourcing and product development process by requesting use of a centralized platform for design, development, sourcing, quality, production and delivery.
With the increasing complexity of the global supply chain, the need has increased for sophisticated retail supply chain management software. Retail sourcing and supplier compliance managers need to consider supplier performance, sourcing destination and nature of demand, supplier risk, demand volume and variability, and regulations to create an end-to-end network that enables speed-to-market.
The bulk of the retail industry is currently relying on home grown spreadsheet product trackers and emails as a way to communicate internally and externally. However, as the product lifecycle evolves not everyone is on the same page when it comes to the most reliable and current information.
Sourcing management tools enables both retailers and suppliers to work together to drive costs out of the system instead of squeezing in margins. Global sourcing software innovations help to control direct and indirect spending related to product design, development, sourcing, supplier compliance, quality, production and delivery. Sourcing management tools embedded with Retail PLM (Product Lifecycle Management) solutions with quotation comparison, supplier collaboration built-in will improve stakeholder and business alignment, staff efficiency and profits. Overall, innovation can deliver impressive results in identifying and eliminating avoidable costs.
Retailers are highly reliant on product development and sourcing best practices to get rid of unwanted costs and squeeze more profits to add to the overall revenue. They are always on the lookout for maximizing returns on investment by striking the right balance between deploying innovations versus optimizing the value they deliver. To learn more about today’s PLM system software and sourcing management tools or for more information please Contact Us or visit www.cbxsoftware.com.