Research & Trends: Redefine The Role Of Safety Stock For Mobile Commerce

By Matthew Deeter

From the financial results turned in from most retailers and manufacturers, the 2010 holiday season was a profitable one. This result is not only because consumers increased their purchases, but also because the industry as a whole had a better handle on their inventory. It is no accident, as retailers and their trading partners have spent millions of dollars on forecasting systems providing true visibility into customer demand. With this new information in hand and the appropriate internal controls to adjust purchase orders, manufacturing schedules, and delivery dates, product markdowns and buy backs have been greatly reduced. While these new business processes have increased the flexibility of the supply chain, in my opinion, one area that requires a review for multichannel retailers in 2011 is the role of safety stock.