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dgoodwin

113 Posts.

08/09/17

07:30

Post #: 27077334
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Originally posted by Trae ↑

Some of my own knowledge to help with the interpretation of data.

In simple terms, retail companies typically hold inventory in DC's (Distribution Centres) & Retail Stores (Bricks & Mortar Physical Stores).

Online Sales are typically supplied via one of the following 3 logistics channels:
1. DC => Customer
(Large companies usually have a network of DCs.DCs may be dedicated to online [A "Dark Store"] or may supply other DCs, physical stores & online)

2. Store => Customer
(This is where a larger store, perhaps situated in the region closest to the customer, supplies both foot traffic customers & online orders)

3. Vendor or 3rd Party Logistics Partner => Customer
(This is where the entity selling the goods runs the website however never physically comes into contact with the product. More common for large goods - not hair product)

The retail sales platform (computer systems) will calculate an ATP quantity (Available to Pick / Available to Promise) that is reflected on the websites or in store POS (Point of Sale Computer System) screens to satisfy customer inquiries.

The physical location that supplies the online sales will typically have a 'Safety Stock' or 'Re-order point' level to ensure the ATP is not depleted to zero in less time than it takes for the company logistics to refill the stock at that location.
Because the safety stock exists to prevent out-of-stock situations, online sales ATP logic very rarely looks at more than one location.

This means that when you're attempting to determine the suppliers SOH (Stock on Hand) by pressing buttons on their website you're likely only checking the stock in one of many locations (The DC or store that supplies online orders of that product to your location) and the refill of stock to that location may be from another internal DC or Store and not necessarily an immediate order to the Vendor (Advangen).

I do see some value in tracking online 'Available to promise' quantities via our customer websites however without inside knowledge relating to their internal logistics channels we should be aware that the numbers are only indicative / represent the tip of the iceberg.

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That was a very useful and thorough explanation of the retail supply chain. Thanks for taking the time to post.

CDY Price at posting: 2.3¢ Sentiment: Buy Disclosure: Held
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Neiman Marcus, page-8

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