Monday, June 8, 2015

INVENTORY -- HIDDEN ISSUE OF E-COMMERCE IMMEDIACY & MUTICHANNEL



E-commerce immediacy is sweeping across the globe. It has become a selling and supply chain paradigm.  Delivering customer orders within 48 hours of placement is a megatrend. 

E-commerce is the beginning.  Immediacy will move across channels, markets, and industries.

Additional inventory -- aka, additional working capital or reduced liquidity-- is an underlying factor.  Many companies incorrectly focus on it.  They deal with--
  • Urge to increase inventory because of additional channels
  • Allocating inventory by channel
  • Not recognizing that inventory "optimization" struggles in reality of multichannel sales.
These do not really work.

The better approach--as part of the New Supply Chain/the Blue Ocean Supply Chain is to:
  1. increase inventory velocity to inventoryvelocity2
  2. compress time
  3. move the supply chain upstream to key suppliers as determined by supply chain segmentation
  4. elevate integration of process and integration of technology to advanced levels