What retailers need to think about this Christmas:
Retailers need to be anticipating how the consumer buying patterns will change over Christmas. They may consider that many consumers will spread the cost of Christmas over a longer period by buying early and for this reason frozen turkeys may be more popular than usual. Avian flu is another factor that will make sourcing produce interesting for supply chain managers and retailers this Christmas and earlier this week it was announced that all poultry and captive birds must be kept indoors to fight this. Smaller farmers that historically have allowed their birds to free range at a low cost will no longer be able to do this which will drive up the cost of producing a turkey. Inevitably it will also mean many of the free-range producers will not be producing turkeys this year. Don’t expect there to be a shortage of Turkeys this year but do expect that they will cost more and might not be available from your usual source.
So what can retailers and supply chain managers do?
What has been shown to be a key success factor in the past two years is having good supplier relationships but ensuring that you are not inadvertently ending up in a single source position. It will also be important for retailers to have up to date and informed data. Unless companies have the right data, end to end supply chain management does not work. Tactical decisions need to be made with real-time data for short-term drops or spikes in demand. If companies have good data intelligence then strategic demand planning can be deployed in times of disruption because planners have more confidence in data quality and insights into consumer behavior.