The Limited manages supply for its nine retail operations as well as for two it recently spun off. Each unit has hundreds of stores, and each store has thousands of SKUs. The sales each year in just one chain of stores can build up to a billion rows in a bulging data warehouse, and there's no adequate forecasting tool that can work with that level of detail, McFadden says. Forecasting and replenishment systems must be detailed and be able to quickly present the right information to the right people including suppliers. But faster transportation is usually more expensive, and it can be risky for retailers to ask suppliers to directly supply merchandise to stores because suppliers may be unwilling to break shipments into the exact quantities needed.
Detailed systems can help manage that, too.
Increasing granularity, or being able to show more fine detail, also applies to assessing inventory costs. Only when the costs are fully understood can a business realize which items contribute most to their margins and should, therefore, be a supply-chain priority. Finally, retailers and other businesses need to keep their various planning arms in synchronicity. Financial planners must talk with store planners and product planners to ensure that inventory moves in a way that allows each plan to be realized rather than inadvertently thwarted, Girard says. Although it's technically difficult, optimizing inventory allocation is also fraught with new opportunities for businesses, Smith says.