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Supply chain is the vital link to success

I was struck by Sir Philip Green’s comments on BBC Radio Four’s Straight to the Top last week.

Discussing the pressure on retailers to be competitive in a rocky climate, he said the supply chain is everything.

No one would doubt his opinion, but there is a lot to that seemingly simple statement. Online trend analyst company WGSN’s Sandra Halliday touched on part of it in the same programme. She mentioned the importance of a fast reaction to opportunity; in fashion, miss a trend and it’s gone forever.

Putting the right product in the right place at the right time is always important, but during a recession it is fundamental.

Driving efficiency into the supply chain, and driving costs out, has to be a main focus.

Most people know that reverse logistics, cross-docking, consolidation and other desirables could make a difference.

But between every retailer and the ideal supply chain there is the pain of change. And that idea is trapping retailers between a rock and a hard place.

They need to change to stay competitive, but in a depressed market they cannot afford any interruptions.

But change we must and the winners will be the retailers who do it rapidly. Twelve weeks’ stock might simplify the logistics, but you pay for it in flexibility as well as in the overheads. And pushing the problem down the chain to the supplier is a temporary fix because you can’t risk supplier relationships for short-term gain.

Tough times demand hard decisions, but rapid change now will ensure survival, bolstering your position and positioning you to emerge as a stronger, more competitive business.

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