Many retailers are gaining new insight into their businesses by analyzing downstream data, with Wal-Mart being perhaps the leading practitioner. A new RetailWire white paper, Providing Bottom-Up Support for Wal-Mart and Other Retail Accounts, underwritten by Shiloh Technologies, is designed to be a primer for manufacturer support teams that are feeling increased pressure to be more involved in this daily decision-making process.
The extraction of insights from demand data, according to Shiloh Technologies, is being greatly facilitated by new Business Intelligence (BI) apps, such as Demand Signal Repositories (DSRs) - evolving technology that is making the daily capture, summarization, and reporting of daily item store level sales feasible. Traditionally this data would have been loaded into a data warehouse and become the basis for after-the-fact inquiries. Now, with DSRs and other BI tools, it can be analyzed quickly enough to impact results as they unfold. Shiloh Technologies attests that can be a very good thing for the trade relationship, but only if both parties are up to speed on the technology. Suppliers that are slow or unable to adopt these BI practices could find themselves "out of the loop."
Store item demand data is more precise and timely than the old warehouse shipment and order data. This granularity offers never before-realized opportunities, given the proper tools. DSRs can generate predefined reports and data 'dashboards' targeted to business users. They also provide the flexibility for business users to generate their own reports or dashboards.
DSR-enabled demand planning, according to the Shiloh Technologies' report, includes activities such as:
- Evaluating actual results against previous forecasts to adjust forecast parameters;
- Adjusting seasonality factors because of actual weather deviations;
- Requesting physical inventory audits because of zero sales exceptions;
- Projecting future promotion performance based on past results that evaluate shelf allocation, depth of discount, and outside advertising;
- Adjusting assortment recommendations based on peer comparisons;
- Recommending case pack changes based on normal replenishment;
- Automating the updates to retailer and supplier planning applications based on actual results;
- Analysis of price elasticity by regions to ensure that items are at the right price in each store;
- Monitoring of replenishment settings and in stock to be certain that you understand the true demand for your items.
With all these capabilities, Shiloh Technologies said it's clear why manufacturer support teams are feeling the need to speak this new language fluently and work intelligently with retailers on demand-based planning.
Discussion questions: What hurdles will suppliers face in adopting Demand Signal Repositories and other BI technologies? When will DSRs essentially become a requirement for servicing most retail accounts?