3 reasons to connect your supply chain and category planning processes to drive true demand

Why it’s more important than ever to connect the dots in a post-COVID world

Increasing knowledge, gaining efficiencies, and providing consumers with the right products at the right time has become even more critical to the evolution of retail. Many retailers continue to operate in siloed systems which naturally cause inefficiencies and unclear communication. By breaking down these silos; starting with supply chain and category planning, retailers can leverage internal knowledge along with consumer trends and demands to increase sales and amplify the in-store experience.

Supply chain and category planning: putting the pieces together for success

Yesterday’s forecast models aren’t designed to learn and understand data and contextual data sets. Further they weren’t designed to influence other systems. An understanding of true demand is needs to be the primary influence on the supply chain ecosystem. To that end, retailers must step up their game to address the aftermath of COVID by fully integrating their category planning, agile merchandising and supply chain systems.

Supply chain planning and category planning have always been inextricably linked. With AI, we can add intelligence for both supply chain and category managers and create a much more unified planning process across the retail enterprise. Frankly, it’s long overdue.

To fully understand and benefit from true demand, forecasting models must do some extra things that they’re not doing today. The way forward is a supply chain that is integrated with category planning and agile merchandising systems to deliver a true demand forecast.

An integrated supply chain and category planning approach has multiple benefits:

  1. Real-time data consistency – When a new product is created as part of an updated assortment optimization, it is immediately available as part of the supply chain’s master data set, eliminating gaps and error rates
  2. Shelf-connected replenishment -Improved accuracy through the system’s ability to understand changes in the assortment and understand contstraints from the physical space for the products on the shelves
  3. True Assortments– A Demand aware assortment starts with understanding True Demand. Retailers don’t have time to manually adjust assortments. For example, if a product isn’t available to be ordered for a certain store, it cannot be added to that store’s assortment. Additionally, if an item has little demand prediction, low loyalty scores then several duplications of space will not provide incremental value.

Retailers who adopt this approach realize a minimum 1% growth per category per year along with a more streamlined workflow, cutting the reset cycle by a third.

To meet the ever evolving consumer demand, retailers need to be agile with their assortments while being aligned with their supply chain. By removing silos, opening lines of communication, and reallocating time, retailers increase efficacy to achieve their goals.

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