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Why Retailers Need a ‘Glass Pipeline’ to Facilitate Inventory Efficiency

From natural disasters to political upheaval, retailers with global operations now need to expect the unexpected. And one of the best preparedness plans is expanding visibility into multiple links of the supply chain to enable more agility and flexibility.

To guard against disruption, some retailers hold safety stock or excess raw materials. But amassing inputs or inventory puts them at risk for markdowns or lost investments if merchandise goes out of style or materials deteriorate before they can be used for production.

“We need to realize that inputs and finished goods are all inventory, so if we’re holding onto raw material and components, somebody’s paid for them already,” said Gary Barraco, senior director of product marketing for supply chain software firm E2open.

In a discussion with Sourcing Journal president Edward Hertzman, Barraco explained how visibility throughout the supply chain is the solution to achieving more efficiency. This involves being able to see what inventory and materials multiple tiers of suppliers are holding, allowing companies to avoid overstocks while also preventing go-to-market delays for time-sensitive launches.

Removing silos between brands and supplier partners is also essential in reacting to and navigating challenges. “If we’re looking at a situation where we need to shift our sourcing…we need to know where to go next and we need to collaborate well with our suppliers,” Barraco said.

Watch the video to learn about the savings impact of efficiency, how technology can solve fashion’s raw material management problem and why visibility can help retailers avoid disappointing customers.