Throughout the United States, even in Springfield, it's impossible not to spot at least one convenience store. In the city of the Simpsons, it's called "Jet Market" and it's managed by Apu Nahasapeemapetilon. He's the unfortunate and frequent victim of regular robberies by some of the worst characters of the famous animated series.
Among the many problems that Apu's business is experiencing, there's one that happens more frequently than others. Stacked on his shelves are dozens and dozens of expired products. To "solve" the problem he either corrects the date to extend its life by a few more days or he puts them under special offers. The ultimate goal is to trick the most gullible, such Homer Simpson, into buying them.
However, the strategy does not bring great benefits. Homer is not the only inhabitant of Springfield after all, and as expected the shop lands in hot water.
The problem of Apu and of all retail managers
Fortunately, not all managers subscribe to Apu's model of problem solving. Many constantly look for tools to address their daily supply chain management difficulties. Globalization has made a more complex supply system involving people operating across the world who play roles in a complicated interdependent network.
For example, in the automotive sector, there's a wide network of suppliers spread all over the world. And with the growth in role of e-commerce and the internet, logistics processes have greater implications on customer satisfaction. Just one hitch in the chain and the customer won't hesitate to head to the competitor site, to say nothing of negative comments on platforms and social media. (Want to get a better understanding of how Business Intelligence can greatly improve your retail business? Download our FREE ebook now: Business Intelligence in Retail!)
A valid alternative to Apu's method: Business Intelligence
Business Intelligence provides a number of methodologies and tools, primarily the ability to integrate information from sources that are very different from one another. Data on reception, storage, returns, receiving and delivery status are included within a single, specially-built database.With interactive reports and dashboard support, you can also monitor day by day, hour by hour, minute by minute, the status of your wares, all with a 360° view.
Sometimes, however, it's not enough to have an overall view. You'll also need to focus on some particularly important and delicate parameters. In this case, it is possible to build Key Performance Indicators that can communicate the health status of the chain in real time or define alerts that will call the manager's attention if sensitive values exceed a certain threshold. These tools allow you to make important timely decisions. The manager can then plan in advance and reorganize the chain by managing risky situations, such as stock damages, which can hurt the business.
In addition to managing the unmanageable, Business Intelligence allows you to generate predictions through several of its tools.
One of this is what-if scenarios: starting from a series of variables evaluated crucially within the context, different possible situations are constructed, from the most unfavorable to the most convenient. Through this, you can prepare different strategies so you'll never be caught unprepared. Predictive models can go in an even more aggressive direction. Machine learning techniques train algorithms that can predict, with some degree of accuracy, what will happen in the future from the analyzed historical data.
With these two methods, it's possible to know the events that can affect supply chains in advance and allow you to make adjustments in time. At the same time, it will also allow you to take advantage of positive trends to stay ahead of your competition.
Business Intelligence helps in managing all the logistics activities as it increases the flexibility of the system by anticipating and managing any inconvenience. It also increases the efficient management of stocks by providing data and information sharing vertically and horizontally. Furthermore, it increases the resilience of the company as it minimizes direct, indirect, and brand image costs.
Who knows what Apu could have achieved if he managed his store with BI. To help improve your supply chain management and avoid selling expired products to the poor citizens of Springfield, download our FREE Business Intelligence in Retail eBook, a comprehensive guide of all the BI tools and benefits retailers can take advantage of! Best of all, it's free!