Many businesses in the transportation and logistics industry use retail supply chain analytics to predict the future. By leveraging historical information and data, experts can predict how to optimize revenue. Using these analytics can be incredibly helpful for even the most inexperienced practitioner. But their value isn't limited to forecasting the future. The right applications can be used to understand what's happening in the present and what happened in the past. That information holds value and empowers companies to achieve increased throughput.
Retail supply chain analytics helps pinpoint exact numbers. That makes finding the perfect order rate more manageable. From the moment of order creation to the time it's delivered, shippers need to know whether it was shipped through the proper distribution center and service, was it damaged, and did it arrive on time and in full. This should be non-negotiable for those who want to succeed in the transportation industry.
Another critical feature in retail supply chain analytics lies in the cash-to-cash cycle time. This does not purely point to financial gains but the complete functionality of the supply chain. Essentially, less time spent addressing mundane errors means more opportunities to drive the overall profitability of the enterprise. Utilizing data normalization practices will help dramatically reduce back-end processes. And when 80% of invoices have some type of discrepancy, this step is essential to improving in the future.
As the preferred and most common financial function used by supply chain experts, total supply chain management cost of percentage sales refers to the absolute supply chain and transportation network cost. Tracking total costs as a percentage helps to identify your total profitability in more granular detail to understand where costs are increasing and alludes to why. For instance, that helps with identifying future cost impacts on an ongoing basis, such as GRIs or peak surcharge increases. Planning for such impacts will be critical to understanding profitability going forward. And there are other implications for getting into deeper detail with SKU-based profitability to understand where to target your promotions and marketing efforts too.
The fill rate in retail supply chain analytics refers to the order fill, line fill, and unit fill. This keeps track of the fill rate, especially while in full performance. All three cover the percentage of orders delivered on the first attempt, the number of line orders delivered on the first attempt, and the number of items delivered on the first attempt. Additionally, using data, you can quickly analyze which day of the week or times are more successful. Letting the customer choose their delivery date gives you more certainty that they will be around to increase the fill rate.
Another great use of retail supply chain analytics is simulation and scenario analysis. These function as a pro and con list to help shippers identify when existing processes might need to change. Today's shippers already have access to demand forecasting capabilities. As explained by McKinsey & Company:
"Typically, planning is already the most data-driven process in the supply chain, using a wide range of inputs from Enterprise Resource Planning (ERP) and SCM planning tools. There is now significant potential to truly redefine the planning process, however, using new internal and external data sources to make real-time demand and supply shaping a reality."
This combined approach can breathe new life into supply and demand optimization while reducing confusion over which scenarios and steps will prove most beneficial. Additionally, it will help determine the best and worst cases through the supply chain.
Capacity planning and demand forecasting is another excellent use for retail supply chain analytics. Accurately forecasting shipments is critical for the parcel carriers when the volume is this high across the board. As seen during peak season, companies like Nike, Footlocker, Gap, and others were shut off from carrier capacity because they reached their allocation limits. Using historical data and sales forecasts, shippers can model what their volume will be for the upcoming year in addition to estimating costs. And if a shipper is catching up to their volume allocations, they can start looking into other carriers' volumes.
Route optimization reduces the number of extra miles truckers need to drive and the associated risks. For example, Identifying and monitoring which routes are more efficient can be an easy way to reduce costs and improve customer experience. Eliminating unnecessary miles creates opportunities to accommodate more transactions. For retail supply chain analytics, this one use case will help save even more money.
Going green isn't only good for the environment. It is also beneficial to your profitability. By utilizing the right and cheaper services, typically ground, you can reduce environmental impact. That will also encourage customers to use a slower option like ground. By utilizing shipping data, you can analyze the impact and tweak services used according to zip codes or regions to further enhance sustainability.
Demand forecasting includes the tools needed to optimize profitability based on supply chain data. Using data, shippers can create an evolving sales forecast to predict transportation procurement needs, plan inventory replenishment and adjust the allocation of inventory across their full networks. The historical data insights from transportation analytics can further improve forecast accuracy, reduce costs, and automate planning in inventory management and transportation capacity procurement. These tools are invaluable in retail supply chain analytics and allow for a more complete view of the network size and volume.
Accounting accuracy and payment management can be a real cost-saver. Continuously auditing and monitoring invoice accuracy and payment processes will provide insight as to where high costs and spending are more prevalent. Knowing where to locate that data will make it easier to solve those issues.
Using the right retail supply chain analytics will help boost retail profitability. And using these tips as a guide will enhance your shipping strategy and lead you to the path of success in the supply chain. However, not all analytics platforms are equal; not all systems can truly compare apples to apples to ensure your accessorials, net costs, and overall hassle decrease. Intelligent Audit can do all that and more. Connect with Intelligent Audit to get started today.
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When creating a strategy to optimize your shipping network, you must keep in mind that each new warehouse should accomplish 3 goals