Omnichannel Retailing Demands Supply Chain Transparency
Stephanie Dula 25 Nov 2015Black Friday and CyberMonday are just right around the corner, but the 2015 holiday shopping season is already upon us. Today’s retailers compete in an unprecedented omnichannel environment where consumers demand faster shipping times, price-matching guarantees, larger and more diverse selection, and on-demand customer self-service portals, among other things. Consumers are getting better at gathering actionable information from multiple sources, including retailer websites, social channels, brick-and-mortar establishments, and mobile apps in order to acquire the items on their list in less time for less money.
The most innovative retailers have turned increasingly to back office operations and in particular, supply chain data management, to get a leg up on the competition during the holiday shopping frenzy. During the course of our extensive market research for the 2015 Purchase-to-Pay for Retail Report, we spoke to several retail innovators in search of proven guidelines to ensure maximum supply chain visibility. When developing a plan for maximum purchase-to-pay efficiency during times of high-demand, it’s important to focus on these three key areas:
1. Supplier communication
Leading retailers know that supplier relationship management is crucial to on-time delivery for their customers, especially when shipping time is often the primary decision-making factor. Many retailers provide the use of a self-service portal by which suppliers can relay their concerns, accelerate payment, update catalog information, and upload required documentation. Retailers can send their inventory information and shipping preferences to suppliers, gaining the ability to make more efficient operational decisions in how they order and receive products.
2. Manual payables processes
Manual processing is a costly, time-consuming culprit lurking in back office operations in many industries, and it remains a very real problem for retailers as well. Invoice workflow automation goes a long way in controlling issues of time, accuracy, and cost—especially when considering the fully-loaded processing cost per invoice. According to our research, most organizations do not track their invoice processing costs, which prevents
them from properly identifying and correcting process inefficiencies. Automation solutions also increase organizations’ ability to capture early payment discounts and reallocate AP staff to more strategic tasks.
3. Working capital tools
Supply Chain Finance and Discount Management (SCFDM) is a business strategy that optimizes working capital and supply chain collaboration for both buyer and supplier relationships by seeking tailored payment terms for services and materials. In years prior, discounts were driven by suppliers as an incentive to secure early payment and garner enhanced visibility into invoice status. With modern Dynamic Discount Management (DDM) solutions, buyers proactively propose early settlement discounts to suppliers in order to decrease purchasing costs and mold a more competitive supplier landscape.
