Contrary to some people’s opinion, lack of visibility in retail supply chains is best resolved at the store level. A common problem in retail is the out-of-stock condition, for both, retailers and their partner communities. By planning from the store level and by providing consumer-demand forecasts, one can calculate the requirements in a supply chain. This will lead to step-wise improvements by reducing out-of-stocks. The multiplied visibility can be achieved with an application on a platform that is used for SCM and planning.
Flowcasting: Why it is needed and what it requires
Out-of-stocks in the retail sector are more impactful than in other sectors. Each process of retail experiences frequent dependency on the other. Errors in predictive analysis of inventory only lead to competitive disadvantage. It is important to continue calculating demand that is dependent on the entire supply chain, as everyone has to focus on consumer requirements and work towards the best forecasts possible.
It requires the partners to have guaranteed visibility of data, with applications connecting supply chain participants over an affordable platform. SOA architecture with SaaS applications has been the most acceptable choice.
Flowcasting begins at the store level of the supply chain by forecasting what active consumers will do each day over the forecasting cycle. The dependent demand is calculated to know the amount of inventory that DCs should carry to stores. They also inform when specific amounts of products have to arrive to meet consumer demand in the entire cycle of forecasting. This process in flowcasting is repeated for every node in the supply chain.
Some of the helpful features:
- The ability to flowcast a product’s inflow and outflow, throughout every node, is followed by translation of the information into multiple languages of areas linked to the retail outlet.
- To plan for capacity of receiving, planned receipts can be taken as receiving hours. This capacity plan can be showed as the number of loaded trucks that an RDC or retail store has to receive.
For flowcasting in a retail-based supply chain, the process should begin with everyday requirements in a retail store. If a business understands the requirements, it will synchronize the entire retail chain for meeting the needs. This will result in needs of retail stores getting fully visible to participants of the supply chain. For the ones manufactured and distributed, business partners will understand the specific requirements of the retail store considerably early. This kind of visibility works on all other nodal points in supply chain optimization solutions.
The Perfection that Flowcasting Offers
The best benefit of flowcasting is that the centers of retail distribution will become facilities of repackaging and cross-docking over some time. With the technology of today, predictive flowcasting and analytics, retail stores will receive deliveries to be unloaded in the sequence of shelf needs—without separate replenishment and forecasting systems for RDCs. They can choose to communicate with suppliers every day. The portion of theft can be reduced by at least half; with hour-wise visibility of shelf, what has been sold, and what will be placed in the store.
Businesses can use flowcasting technology for financial projections of receipts of planned products from suppliers. The projections act as brilliant inputs to plan the cash flow. Businesses can also take receipts of projected products from suppliers and understand their payment terms to predict how much accounts-payable is representing.