Supply chain reliability highlighted at Sri Lanka retail forum
ECONOMYNEXT – Sri Lankan retailers should ensure they have a reliable supply chain with suppliers kept informed of demand forecasts and changing trends if unexpected inventory problems that leave customers dissatisfied are to be avoided, an industry official said.
“Supply chain is the foundation of retail,” Suren Sornalingam, vice president of sales and operations at Info-CTRL and former head of operations at Kingfisher PLC, UK, told the ‘Sri Lanka Retail Forum 2017’. Firms like Alibaba had fundamentally used supply chain innovations to disrupt the retail industry, he said.
Panic orders to make up for sudden inventory shortfalls arising from poor forecasting and planning could have a massive working capital impact and erosion of cash, Sornalingam said.
“Accurate demand forecasting is critical,” he told the forum organised by Sri Lanka Retailers Association, which operates under the aegis of the Ceylon Chamber of Commerce. “If you don’t get the data right and you don’t have the right kind of data, you can forget about the future.”
Sornalingam said people and succession planning in retail firms was important to avoid problems caused when staff get shifted around to give them wider exposure to the business. “Collaboration is key,” he also said. “You must have conversations with your vendors and collaborate regularly with them rather than be in silos.”
Retailers should ensure their vendor gets weekly sales reports that could help improve forecasting demand, Sornalingam said.
This could help suppliers leverage economies of scale given their link with other buyers and sometimes reduce costs.
Retailers should also review routes to market to reduce lead times and improve working capital, Sornalingam said.
(COLOMBO, Sept 14 2017)