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March 2014

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Top Priorities for Supply Chain Executives

As competition grows more fierce, retailers must align planning decisions with demand—especially with the advent of online megaretailers that can combine competitive pricing with an extremely efficient supply chain.

"Retailers are asking, 'How can I push the needle by offering competitive pricing and flexibility in fulfillment while still maintaining solid margins?'," says Mike Johnson, solution director, Oracle Retail.

Single View of Demand
Demand is a moving target that is constantly affected by changes in pricing, promotions, assortment, and other factors. Retailers must combine these influences with historic data to create a truly informed forecast.

"To achieve this, you have to have single set of data all on a single platform, including financial planning, assortment planning, demand forecasting, supply planning, and supply chain execution," says Johnson.

Granular Planning
With such a platform in place, retailers can achieve the high level of granularity they need to compete. "Then you can plan stock levels down to the individual product and location, not just for today but for any day into the future across your entire connected, multiechelon supply chain," adds Johnson.

Because Oracle combines this level of granularity with the industry's most advanced retail science, retailers can create truly optimized plans—all the way down to product, location, and day.

Proactive Supply Chain
Traditional retailers can leverage both their store and warehouse networks to fulfill customers in ways pure-play retailers can't—including store-pickup and traditional shopping transactions. The challenge is to maintain service levels and flexibility without driving up inventory costs.

"To achieve this, supply chain managers need to spend more time planning and less time troubleshooting problems," says Johnson. That's made possible when supply chain planning and replenishment are tightly integrated with demand planning—and driven by advanced retail science.

Oracle has a dedicated team of retail science experts charged with actively cultivating new science, from initial research through consultative offerings and all the way to packaged products. Academic partnerships, such as the one with the MIT Sloan School of Management, as well as with other universities, reinforce the strength of that science.

Return on Inventory Investment
Retail merchandisers face a never-ending challenge to maximize customer satisfaction while minimizing inventory costs. It is always a matter of give and take, and the decision-making process is necessarily complex.

Today's wide assortments and multiple touch points complicate matters even more. To maximize return on inventory investment, retailers need to take into account the unique characteristics of each channel or location.

"Retailers need multiple replenishment methods, inventory management techniques, and forecasting approaches," says Johnson.

Oracle Retail customers have saved US$3 billion in one-time supply chain inventory reductions, and inventory reduction benefits of 5 to 30 percent for many Oracle Retail customers. Oracle Retail customers are also experiencing profit improvements of 0.5 to 5 percent from increased sales, up to 5 percent improvement in productivity derived largely from offsetting the need to add staff as sales grow, 10 to 20 percent reductions in waste and spoilage, and up to a full percentage point improvement in gross margin. Contact Oracle Retail to learn more.

Learn more about the top priorities for supply chain executives. Read the Gartner, Inc. analysis of the competitive landscape for retail supply chain software, including market share analysis for retail supply chain planning and execution software. "Competitive Landscape: Target Transformational Software Opportunities Emerging in Retail." (3 January 2014 ID:G00255330, Analyst(s): Jeffrey Roster, Chad Eschinger)

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