• Chainbalance

Make consumer behaviour the heartbeat of the supply chain

Dynamic replenishment



Every brand and retailer wants to create, produce, and sell products that make their consumers happy. Various product factors influence this, like design, colour, fabric, quality, and fit. But the supply chain is also a key factor to ensure happy customers.


Many details matter in bringing products from factory to consumer. To do this right, it’s smart to make consumer behaviour the heartbeat of the supply chain.


Availability

Availability is vital, but how to achieve the highest availability with the stock you have purchased? What to do with all different sizes and colours, should they be available in all stores? How can I make sure the colours and sizes fit with the customer profiles in each specific store?


A lot of valid questions, and there is no generic, averaged, 'one size fits all' approach to all these influencing factors. The solution lies within flexibility. When you keep the stock within your supply chain as flexible as possible, you can agilely respond and adapt to consumer behaviour. With flexibility, we mean enough stock in your stores, but not too much, and plenty of stock in your central warehouse to flexibly fulfill each store's individual needs.


With dynamic target levels adjusted to the consumer’s purchasing behaviour, you ensure the highest availability for the right products in the stores. And not just at an aggregated product level, but at SKU (stock keeping unit) level, including size, colour, or other variables. And not just across stores, but detailed for every specific store and dynamically adjusted within the season. A smart algorithm correctly changes the target levels corresponding to the product's life cycle and incorporates exceptional sales peaks, events, and end of season sales periods.


Inventory turns

The turns of your inventory reflect the fit of your products with the consumer's needs. Within fashion retail and other slow mover consumer products, this is an important measurement to steer on. By adjusting the target levels dynamically to consumer behaviour, the inventory turns will increase. There will be more shelf-space for best-selling products by lowering the target levels for the real slow movers. That way, stores unlock the hidden sales potential of their articles. By doing this, we saw examples where stores sold three times more of a product in a specific colour and size. For one specific SKU, the target level increased from 3 to 12 and all pieces were sold at their original price!


Inventory movements

Transportation involves time and money. Therefore, you need to avoid unnecessary movements. Above we already mentioned that flexibility within your supply chain is key to the right availability. The same goes for inventory movement. When keeping your stock flexible and as high as possible within your supply chain, you avoid unnecessary movements like redistribution to other stores and warehouses.


All the above highlights the main factors of making consumer behaviour the heartbeat of your supply chain. This heartbeat is critical to outperform your peers within the ever-evolving retail landscape.


Feel free to contact us and get in touch when you would like to learn more on this topic.

CHAINBALANCE B.V.
Graaf Engelbertlaan 75
4837 DS Breda
The Netherlands