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As Retail Needs Change – So Must the Supply Chains that Support Them

Supply-Chain

Few can have missed the changes happening in the retail sector. Brick and mortar retail brands are reinventing themselves and their business models to survive in an e-enabled retail world. It should not be a surprise that as retailers innovate with new store concepts, footprint and promotional models, the supply chains that support them must be increasingly agile to meet the changing needs and formats of brick and mortar and e-commerce retailers.

It is in this context that more companies are looking to add postponement as a capability within their supply chain arsenal to address the shifting consumer and market needs.

Delivering speed and agility

Multiple retail and e-commerce product formats with accelerated promotional and replenishment cycles can be supported with minimal inventory through rapid configuration within the Solution Center footprint.

Enabling new promotional and channel opportunities

Being able to respond positively and quickly to new promotions, inserts, labelling and channel requirements opens additional revenue and growth opportunities.

Delivering cost savings

With rising labor costs in China and other global manufacturing locations, the economics of postponement (reduction in transportation costs, reductions in inventory, elimination of waste and rework) regularly delivers a positive financial return.

Dramatically reducing working capital needs

Inventory has long been the buffer between extended manufacturing and transportation cycles and the replenishment needs of retail. As retail expands its number of configurations, traditional inventory models have become more costly and less effective. Postponement leverages common inventory across multiple channels, releasing valuable working capital – particularly for growing brands.

With supply chains now at the forefront in terms of competitive advantage, opportunities to deliver real step-function cost, cycle time and working capital improvements cannot be ignored – and ModusLink has taken notice, recently demonstrating over $3.5M in annual cost savings for a large, consumer electronics client. On top of the cost savings, we also were able to provide a 50% reduction in inventory by implementing a regional postponement model within its US and European retail Solution Centers.

To learn more about how to increase profitability by configuring, customizing and finalizing products using a postponement model, visit www.moduslink.com/solutions/value-added-warehousing-distribution/.

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