Merry Christmas...unless Santa ordered your gifts from an online retailer

Merry Christmas...unless Santa ordered your gifts from an online retailer

Posted on December 23, 2011 0 Comments

Black Friday and Cyber Monday have become just as much a part of the Christmas holidays as stockings, midnight mass, a large man with a white beard in a red suit, candycanes and packed malls. North American retailers look to this season as their...well...Christmas. A time when they will push their finances into positive territory, make profits and fill coffers with cash for the upcoming year. We have all read about the horror stories that are also linked with this shopping season: stock outs, long lines, unruly clients and the list goes on.

Of course now you can avoid these hazards of leaving the safety of your home to do Christmas shopping and instead tackle your entire shopping list in the comfort of your home, while you are at work (take advantage of that high speed connection...I sure hope my boss isn't reading this) and even via your smartphone or tablet. It is so easy - use Google or Bing to find your items, do some price shopping, look for any deals on shipping or discounts, enter your credit card, hit "buy" and voila...your shiny new train set, book, tv, hand knit sweater, box of chocolates, lego city police station, iPad etc etc...will be dispatched to you. Most sites are now so kind as to tell you when is the absolute LAST moment you can order so that Santa will ensure you receive your desired items by Xmas.

But wait, it is not as simple as that. While the user experience has become much easier and truly allows a wide array of choices and prices, the fulfillment that empowers this process is only becoming more complicated. Bah humbug is what is usually muttered from the supply chains that have to fulfill these orders. Retailers start planning early in the year and are positioning inventories, in some cases, as early as August. Warehouses, transportation and store shelves assets have to be planned well in advance: what items will be in high demand, in what geographic locations, at what price...add to this the fact retailers are dealing with multiple suppliers who themselves guessed it...multiple suppliers. Never mind the supply chain processes needed to build an Xbox, or packaging all the pieces for the Lego City Police station, determining the right combination of size and color for the Paul Smith shirt collection, and the list goes on. All these factors render the fulfilment process for all those holiday goodies a challenge to even the best of retailers and supply chains.

So no surprise that certain retailers are not able to fulfill their online orders, companies like Best Buy are finding themselves in a pinch. Looking to alleviate the strain on their brick and mortar stores (as well as push inventory back into distribution centers) they sought to push consumers online for their holiday shopping, however poor visibility and a lack of connection between their plans and execution led them to where they are today: not being able to fulfill client orders! Ouch. Best Buy, themselves, admitted that there were orders from as far back as November that could not be fulfilled.

As I thought about this I remembered a piece done by SC Digest in the spirit of the holiday, click here. The point of this "supply chain christmas carol" is the need for great connectivity between systems and suppliers and improved visibility into your channels. Do you have the inventory in your system but it is in the wrong location? Are demand and POS data showing you that an item you thought might be a good seller is becoming a red-hot item (think of the Furbies or Wii crazes from Xmas past) or is an item you thought would be a hit with 10 year olds a dud?

During many conversations I have had this year, I get some looks like "I don't need that level of visibility" when I talk about gaining real time visibility, but as the Best Buy case demonstrates if you are measuring visibility "success" in terms of months maybe that is not the answer either.

Happy Holidays to all! And if Santa or whomever is bringing you a gift is a few days late, you can always blame their supply chain.


Guy Courtin

View all posts from Guy Courtin on the Progress blog. Connect with us about all things application development and deployment, data integration and digital business.


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