Is your marketing being sabotaged by poor inventory planning?

#1 on our list of logistics best practices is:

 1. Inventory is planned according to the best information available from forecasts of known accuracy and market information from suppliers, marketing, the sales force and customer feedback.

There is no more important activity in the whole of supply chain than inventory planning.  Correctly determining when and how much stock should be procured will impact every other supply chain activity and affect the value an organisation provides both in cost and service delivery to the market.

Global pricing transparency finally forces the big retailers to tackle the big brands

DJs drop their prices as a result of their strategy to harmonise local and international pricing to compete with overseas internet sales.  Some people are asking if we have been ripped off in the past and why didn't they do this before.  

People are blaming DJs but it is not entirely their fault. Yes we have all known about international price discrepancies for as long as we have had international travel (since colonisation). But it was and is the brand owners who were using Australia as a profitable milk cow.

Pricing into a market has nothing to do with the cost of the item and everything to do with how much the market will bear. So if the general market pricing is high then why would you price your products significantly lower than other similar brands? What has forced the change is much greater price transparency coupled with the ability to purchase that the internet has given to everyone globally.

The market is now global and the brand owners local market price gouging strategy is crumbling. Well done DJs for fighting this much needed fight. This is part of the inevitable set of permanent changes to retail that is working its way through the economy. It feels like it's long overdue but the impact of internet sales is still relatively small (5-8%) and recent. Large companies, complex systems and long term business arrangements are slow to react, but at least we are seeing a move.  I am sure the other large retailers are doing the same thing and the mid-market and smaller retailers will get the flow on benefits.

I think another factor going on is the rise of the Australian dollar coupled with the maintenance of prices on some products to maintain local currency relativity.  If the prices on some luxury goods were suddenly dropped to global pricing then previous purchasers may be upset and brand credibility and prestige would be reduced.  The extreme example of this for me is the Porsche 911 which sells here for around AUD$300,000 compared to US pricing around USD$90,000.

I expect the next few years in retailing (and B2B) to be very interesting indeed.

If warehousing, logistics and supply chain are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

5 Rules for managing expiry dated stock

Expired stock?

Managing expiry dated, use by or best before dated stock can be a real headache for the inventory manager.  My background is in pharmaceuticals and medical devices but many of the same principles apply to food as well.   I also think that even non-expiring product has a use by date;  particularly electronics and fashion or anything that behaves like these products.  Once it gets old, you either can't sell it at all or its value diminishes rapidly.  So here are my rules for managing expiry

Can we manage expiry dated stock better?

A great discussion on Linked In, about the possibility of extending the expiry life of medicines after a recent study revealed that some drugs may retain viable potency for decades; long after the product officially expired.  The possibilities of some drugs being able to be sold with very long expiry dates is tantalising and holds the promise of

Logistics vs. supply chain - what's in a name?

An interesting discussion on Linked In recently about the meaning of Logistics vs. supply chain and how people think about these terms.  My perspective is that the reason this is so hard to nail down is that

Think like a futurist or you are living in the past!

The world is changing faster than we can keep up with these days.  Almost every day I read about someone building something that for me is totally unexpected or I can see that it is a totally logical progression, but is happening now rather than several years from now as I might have expected.  You now have to think like a futurist just to keep up because the future keeps happening now instead of in the future where it used to belong.

It reminds me of the Red Queen's race in "Through the looking glass ..." by Lewis Carroll

"Well, in our country," said Alice, still panting a little, "you'd generally get to somewhere else — if you run very fast for a long time, as we've been doing."

"A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to

We all want the same thing - more profit!

Unfortunately we don't get more profit by focussing on profit.  More profit comes from having the right products and services that are valuable and desired by the market, letting people know about them and executing their delivery brilliantly.

That last one, brilliant execution, is where Logistics Help comes in.  We have developed a best practice model of supply chain.  Thirty one key best practices that you should be aiming for and that we aim to implement in all our projects.

The last mile and the smashing of the power of centralised distribution

How to do the last mile in the direct to customer supply chain has been bothering people for a while now.  With the rapid growth in online sales, there has been a growing use of the workplace as a delivery point for personal purchases.  Whilst this may be fine for the odd delivery or two, it is obviously unsustainable if everybody is doing it, (it doesn’t scale).

I have always thought that the best person to do the last mile was the customer.  After all we are already used to doing it for our store purchases.  We stop for fuel, pick up food from the local supermarket, go shopping on weekends and carry all the stuff home ourselves.  We are now seeing the fight for commercialisation of the last mile hammering another nail in the coffin of retail stores, playing out as we speak.

Why GST free international sales are not killing local retail

With Amazon.com recently being forced to pay state sales taxes in the USA some people are raising the question again about why GST cannot be levied on overseas based online retailers.  Well, this particular issue is a domestic U.S. problem where state sales taxes vary from one state to another and no international borders are crossed, so the problem is a little simpler to solve. 

We also do not have this issue in Australia.  GST is national and is levied on online purchases from Australian companies. The collection of GST on low value purchases from overseas is said not to be economically viable; however I am sure it could be done by data collection from banks, Paypal and other

Nowhere to hide!

One of the big themes of the 21st century is the free flow of power transparency and control of information to the consumer.  KV Pharmaceuticals were granted exclusivity by the FDA on a life saving drug that used to cost $20 but they raised the price to $1500.  They were called out for unconscionable behaviour in a Facebook campaign and are now in Chapter 11 bankruptcy.

The consequences for KV were dire but the principal applies to all companies everywhere.  The internet leaves you nowhere to hide if your price, service, fulfillment, social or ethical behaviour, environmental policies - whatever does not meet with acceptable standards you risk being found out and publicly called out by your customers or commentators.

If warehousing, logistics and supply chain are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

Three ways to sell online

There are three types of online businesses.  

• The single brand direct to consumer, 
• the direct retailer of many brands and 
• the brand aggregator.  

An example of a single brand would be Apple, or fashion brands like Carla Zampatti, Roman Daniels or specialty boutique brands like Farmhouse Muesli.  The single brand has a unique product story that people seek out because it offers them something they cannot get anywhere else.  This is the strongest and safest strategy, make and deliver something unique that people want and you will never have to compete solely on price.  The single brand has the luxury of being able to choose whether to outsource their logistics because price is less of an issue and their margins are higher.  If their brand has no

Green Supply Chain - what you need to know and what you should be doing

The climate change debate has been raging for some years now.  Some people think the climate is warming, some think it is not.  Some think it is warming but there is nothing we can or should do about it, but the majority view is that climate change is our responsibility and we can and must do something. 

Well now, it doesn’t really matter what you think, because the tide of public opinion, government action, energy investment and technology development, is now on an irrevocable path towards       a low carbon economy.

The three major drivers towards a low carbon economy  (apart from the science) are:

What can the pharmaceutical industry learn about branding from the consumer goods industry?

In Australia, where drug advertising on TV is not allowed, the corporate branding of drug manufacturers is not all that strong in the general population.  Where advertising is allowed for over the counter medicines the branding is product focussed rather than manufacturer focussed.  This seems to me to be at least in part due to the industry practice of selling drug brands to other manufacturers or retiring them to a generic manufacturer once they are off patent.  The ongoing consolidation of manufacturers also means that manufacturer brands change or disappear every few years.  As a consequence

The Growing World of Online Supply Chain

Online retail sales were only 5% of all retail sales in 2011 according to NAB  and Australia lags behind the rest of the world, (which is unusual for us). The online retail (and online B2B) market is set to grow rapidly over the next few years and whole new supply chains are going to be established and old ones are going to die (or shrink or adapt) as the traditional retail shop supply chain

Logistics consulting is free!

In 1979 Philip Crosby published his seminal book Quality is Free to break the perception in America at the time that adding quality to manufactured goods was a costly and unnecessary expense. Crosby helped to redefine what quality meant and helped to launch the revolution in quality management that is now an accepted part of almost every aspect of business operations now.

Former CEO of Avis, Robert Townsend said that a business consultant was someone who borrows your watch and tells you what time it is and then walks