Many retailers focus on distribution from DC to store (outbound), as opposed to supplier to DC (inbound) – even though it can be proven that focusing on inbound flow can reduce a company’s working capital by as much as 10-15 percent. In addition, retailers can experience reduced stock-outs, improved available to promise (ATP) for both retail and e-commerce, and decreased operating expenses. While this is one industry example, the benefits of managing inbound flow from vendors applies to other industry verticals as well.
We believe that to effectively manage an organization’s outbound flow, the company’s inbound flow and allocation processes must be defined. Enabling technology (PO management, vendor compliance, inventory visibility, events and alerts, KPIs and reporting) will provide visibility and metrics to reduce the variability (lead time) in the supply chain.
Partnering with a value-added service vendor that understands the importance of managing a company’s inbound flow and allocation processes is the first step in conquering the changing challenges and variability between supply and demand.