The post last week reviewed retailers’ response to the dramatic change in consumer expectations and what that means to your small business.
The posts this week and next week will review important buzz words that your retail buyers may use when negotiating with you either during the establishment of your company as a supplier or as your relationship evolves.
Understanding these buzzwords will help you better understand their perspective and goals so that you can forge a long-term profitable relationship.
Omni-channel – The use of multiple channels to provide information, pricing, selling, and delivery of product to consumers. Channels include online internet sites for PC’s, tablets and smart phones, brick-and-mortar stores, television, and old-fashioned direct mail. Omni-channel is typically associated with consumers use any of the channels whenever they want, where ever they want and with the expectation that the experience will be consistent and seamless.
Push Supply Chain – Products are procured based on a top-down approach to predicted demand. Requires higher inventory costs and is slower to adjust to dynamic market conditions. Has lower shipping costs due to larger and less frequent shipments. May drive volume discounts from bulk purchases from suppliers.
Pull Supply Chain – Products are procured based on a bottom-up process that is uses actual end-consumer purchases. Inventory costs are minimized. Shipping costs are higher due to more and smaller shipments. Volume discounts may be less likely from suppliers due to suppliers’ higher inventory costs and increased shipment labor costs.
Demand-driven Supply Chain – Similar to pull supply chain. Incorporates demand signals from end-customers and may include forecasts as described in the push supply chain definition. May include more extensive sharing of demand of information with suppliers in order to help prevent inventory outages or excess inventory anywhere along the supply chain.
End-to-end Supply Chain Process – Designing supply chain responsibilities as a holistic unit from consumer to retailer to first tier suppliers to second tier suppliers. Efficiency and win-win goals are taken into account to facilitate an approach that works for all parties in the face of rapidly evolving competition.
The post next week will cover inventory buzzwords you must know in order to understand your buyers.