Availability improvement, whilst with its clear links to inventory optimisation is a standalone strategy for increasing customer satisfaction and sales potential. With some retailers even considering it as a “significant competitive advantage”. Over the years many businesses, particularly retailers, at some point in time have made improving availability priority in their business strategy. Some businesses having found their unique balance between availability and stock investment, making significant increases in their retail sales and also improving business stock. Others sadly, have pushed the envelope too far and whilst increasing sales, have seen increased business costs and stockholding destroy all positive gains. It is a balancing and blending process that requires a very clear understanding of your brands customer service level requirement, how it is measured and against your stock holding and business costs. Only then will both shareholders and customer alike reap the value benefits.
Improving customer availability.
At Sigma we have helped business identify, develop and deliver multiple availability strategies, for improving on shelf or online availability. In all cases with the simple objective of increasing sales and customer satisfaction. These strategies have required the engagement and support across multiple departments (and suppliers) to create a fully aligned and integrated strategy. The starting point in many of these strategies was to understand the availability requirements and the various measurements throughout the supply chain and across differing product categories, to deliver the greatest results. In some cases following customer surveys and modelling exercises, live trials were conducted to truly understand the benefits and the associated operational requirements for all prior to a major launch across the business.
Customer surveys can be an interesting start point.
The benefits of identifying and delivering a strategy to increase customer availability are significant. Should you embark upon such a strategy these clear, many cases measurable, benefits should form the foundation of your strategic deliverables. These can include several or even all of the following:
♦ Increased sales on shelf or on line.
♦ Improved customer satisfaction.
♦ Increased sales from new launches or campaigns.
♦ Greater sell through on seasonal products.
♦ Competitive advantage.
♦ Reduced write down costs.
♦ Improved system forecasting of orders.
♦ Greater supply chain efficiency and flow of goods.
♦ Improved metrics and KPI management.
♦ Reduces store stocking costs and improved customer service.
Making Availability a Priority,
Making availability a priority is a relatively simple thing to do. At the heart of which needs to be a very clear understanding of the measures, requirements and consequences. If you cant measure it you cant manage it, a familiar phrase applicable to availability management. There are multiple points across departments at which availability or service level will need to be accurately and timely monitored throughout your supply chain. From your suppliers availability of product and subsequent service level, through to hourly “in store availability” checks, these potential “point of failure” require regular monitoring and action taken. There are also variations to consider for different product types based upon there their lifecycle, seasonality and importance to your customer. In all cases building availability onto your customer business plans through to all departmental strategies and targets will ensure availability is a priority. As with all KPI’s they should also form part of your business meetings, daily discussions and weekly and monthly reviews.
Availability is a big factor impacting on customer spend.
Simplifying the Complex.
We have developed a range of tools, models and management techniques to help you identify and deliver your optimised customer availability. Strategies of this nature, whilst seemingly complex, must be delivered in a clear and simple manner to ensure maximum impact. These strategies must be firstly founded on the recognition that there is a business commitment to improving customer availability, with an acceptance that to do this, all departments involved will be required to sign up to the cause. Without exception. Sponsorship for these types of programme should be at the highest level possible, with a clear and impartial lead with authority and a clear project plan. When correctly broken down, with clearly defined measures and areas of responsibility, the complex becomes much less so. At all points within the supply chain it is important that those involved are monitoring, feeding back and acting upon all areas impacted. With solutions identified and implemented at department level. Aligning availability to to all departments is essential to minimise or even reduce associated costs, be this minimum order quantities, case sizes or shelf fill capacities all play a valuable part in the strategy.
Creating Business Sentinels.
Availability strategies once delivered, must become engrained and part of a business as usual culture for all departments involved. Without such, all benefits realised will be lost over time. Business planning, future strategies, departments, suppliers and individuals should be linked to the KPI’s agreed and regularly reviewed with action taken on any shortfalls. Your availability KPI’s, when built effectively throughout the business, should become “timely sentinel’s” safeguarding and protecting your business and your customers needs. In every instance and case it is essential that those involved act on any shortfalls or findings as part of the day to day operation. Be it an empty shelf in store or a pending delivery shortfall. Customer availability must become part of your broader customer centric business strategy.
Give us a call to find out more about how we can help you.
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