Guest Column | June 19, 2013

Complete And On-Time: The Key To Mitigating Retail Margin Risk And Ensuring Brand Protection

On-time and complete is one of the best KPIs for measuring merchandise plan execution success.  See how your company can increase your percentage of on-time and complete fulfillment.

Catch up with part 1 here.

By Richard Wilhjelm, VP, Sales & Business Development, Compliance Networks

In my previous article in May, we discussed the concept of retail margin risk and the 5 critical steps supply chain professionals could take to mitigate it. Retail margin risk, by definition, is the potential permanent loss of margin due to internal and external performance-related events. A major contributing factor to lost margin opportunities is the persistent out-of-stocks (OOS) that plagues the retail industry. As part of an ongoing series, we will examine each of the 5 steps retailers can take to mitigate risks beginning with one of the most crucial, complete and on-time delivery.

On-Time And Complete

A good exercise for a supply chain professional is to walk over to their favorite merchant and ask the key question, “In order to ensure merchandise plan execution (or hit your margin number), what matters most to you?” Nine out of ten times the merchant response will be on-time and complete. Merchants can live with poorly stacked pallets, funny looking cartons, non- existent shrink wrap and improperly placed labels as long as correct merchandise is there in a timely matter. While the previously mentioned failures can affect overall supply performance and add avoidable costs, none with the intensity and impact as on-time and complete. Why? Because in today’s promotionally driven omni-channel enhanced market place, nothing impacts the customer more than an empty peg hook. And most especially an empty peg hook that was previously advertised as being full. As Camille Fratanduono, Assistant Vice President for Pricing and Replenishment for Pep Boys stated in a recent SCD broadcast, “In stock is no longer a luxury in our business, it’s a necessity !” And the potential downside isn’t just the temporary loss of margin to the retailer; it is also an incalculable damage to the retailer’s brand.

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