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Change the game, or change the rules 2

Posted: January 31st, 2009 under Business, Customer Satisfaction, E-Commerce, Economics, Globalisation, Just-In Time Delivery, Lean Production, Supply Chain Management.
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Matthew Wolstenholme at January 31, 2009 : 5:51 pm

It can be difficult to see which way is up for retailers at the moment, so will increased global risk change the rules of effective retailing and distribution?

Steady performance here (value segment), woeful returns there (some premium brands) and pleasant (apparent) surprises elsewhere (e-tailers) looking good. But studying who is winning and otherwise shows that the universal truth of success through absolute customer focus still holds.

Behind the scenes, some pretty fundamental decisions are being explored. Getting goods to retail on time is one object of excellent supply chain management. The mantra has been to strip out waste to make supply as lean as possible. Just in time production is the archetype. But this approach rest on secure supply, and when lending is tight and suppliers’ cash runs low, the risk of supply failure becomes very real. In an age of global sourcing, and in the midst of a global recession, these risks can become acute.

Some recent conversations have therefore addressed whether just in time should revert to just in case - with more warehoused stock built back into the system.

So will increased global risk change the rules of effective retailing and distribution? We suspect that, like the jumpy pronouncements on the death of capitalism in general, the arguments for bringing back slack may be a little premature.

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