Publications
Beating the odds in retail buying - How to get the best balance of product cost, lead time and re-order policies
Getting sourcing decisions right first time every time is not a luxury but a necessity in the unpredictable, fast moving retail industry. But it is incredibly hard to make the right buying decisions, because there are so many variables: cost, lead time, response to consumer trends, likelihood of mark-down, variability of demand and forecast accuracy. Each of these are difficult to analyse, and there is an element of chance in changing consumer tastes and factors such as the weather. It can seem as though the odds are stacked up against the retailer.
These decisions have a hugh impact on retailers' success. Take fashion retailer Zara, which has based its entire business model on a fast and reactive supply chain, where product is manufactured in Europe. Other retailers, eg Marks & Spencer, have shifted much sourcing to the Far East, enabling them to offer more competitively priced products while maintaning or raising margin, and hence improving their financial results. But others have bucked this trend. For example, value clothing retailer Peacock Group halved lead times and boosted results by moving most product soucing from the Far East to Europe and the Near East.
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