Home' MHD Supply Chain Solutions : MHD Nov-Dec 2015 Contents www.kardex.com.au
Contact: 1300 555 101
Kardex VCA Pty Ltd, Wodonga VIC 3690
• Small Unit Footprint
• High Speed Operation
• Dedicated Inventory Control
• Minimise Manual Handling with 'Goods
• Storage 500kg per Tray
• Clean Stock, Reduced Shrinkage
• Great ROI, Local Service and Support
• Small Item Distribution
• 3rd Party Logistics and Inhouse Facilities
• Work In Progress and Buffer Storage
• Maintenance Spares
• Tool Storage
MHD SUPPLY CHAIN SOLUTIONS --- NOVEMBER / DECEMBER 2015
SUPPLY CHAIN 41
improvements, from customer service, opti-
mised returns processing, and positive corpo-
rate social responsibility. It also provides positive
revenue sources such as recycling, refurbish-
ment, donations, and environmental disposal
or most notably, repackaging and reselling in
Many businesses compare the amount they
spend on reverse logistics to other supply chain
activities and decide to invest in other resourc-
es that provide a greater return. As a result,
they just focus on reducing the cost of reverse
logistics. However, reverse logistics is less than
4% of a business's overall supply chain cost,
and we're seeing some interesting opportuni-
ties retailers can leverage if they change their
So how does this need for a returns program
to be just as good as a forward program affect
the supply chain? Businesses have two choices
-- develop a program internally, or outsource.
Either way, an important best practice is to set
the reverse program up entirely separate to
forward logistics. You can leverage expertise
off forward and reverse for vice versa, but it's
critical to manage each independently to ensure
success for customers and the wider business.
3. Offer customers access
to the 'long tail'
In traditional retail, a company has a physical
bricks-and-mortar store where they'll stock the
best-selling products. However, consumers now
require access to a 'long tail' of products, and
companies must provide these in a convenient
and competitive manner. More and more retail-
ers are using online and virtual inventories as
a way of providing extra product options and
choice to consumers, most of which will have
For example, if this week's new trend is gold
high-end smartphones, stores will stock lots of
the gold smartphone. However, they can only
carry limited stock in-store from a capacity and a
working capital perspective, and therefore other
SKU may miss out. Thought also needs to be
given to the consumer who wants a red one -- if
the store doesn't have it in stock, do they turn
the customer away? The most successful retailer
will encourage consumers to browse its 'long tail'
on an online catalogue in-store via a virtual inven-
tory, and then place their order in-store as well.
This allows retailers to offer a range of products
without having to keep them in stock-- providing
consumers with a wide choice, but without the
inventory risk to the retailer.
By embracing this trend and being in a
position to offer consumers as much choice as
possible, retailers won't get left behind and can
open the door to more revenue opportunities.
Relying too heavily on bestsellers and trying to
pick the next winning product means there is a
risk of too much inventory.
4. Delivering in style
Shoppers want unique treatment from brands.
They want to feel special and to form relation-
ships with them, and for brands to successfully
retain brand fans and attract new evangelists,
they need to deliver this on a consistent, ongoing
basis. Gone are the days of a one-size-fits-all
approach. In the wireless space, in particular,
we're seeing an evolution in tailored service, but
companies should be doing even more to deliver
a seamless end-to-end interaction.
Part of this is the way goods are delivered.
Consumers want deliveries completely tailored
to their needs and they are willing to pay for
the convenience. This includes same-day
delivery, after hours/weekend deliveries, SMS
notifications of delivery status, and set-up of
equipment at home. They also want the comfort
and convenience of shopping online at home or
work and the ability to collect their purchases
in-store. In the very near future, mobile devices
will be ordered, and they will arrive, pre-loaded
at the consumer's destination with full settings,
images, contacts all in place.
For this to work effectively, personalised
supply chains will need to be developed. A
unified point-of-sale inventory system will be
required to enable same day deliveries, for
example, and fully integrated relationships with
logistics partners will be essential in getting
delivery information sent to consumers.
5. Product lifecycle is shrinking
The product lifecycle is shrinking and this can't
be more apparent than with smartphones,
"The range of profitable opportunities that exist for those retailers that are nimble
enough to respond to the movements of a tailored supply chain are endless."
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