Abraham Lincoln is widely considered the greatest President in history. He preserved the Union, abolished slavery and helped to strengthen and modernize government and the economy. He also led a fragile America through one of her darkest and most crucial periods – the American Civil War.
In the early days of the war, there were lots of competing ideas about how to secure victory and who should attempt it. Most of the generals at that time had concluded that the war could only be won through long, savage and bloody battles in the nation’s biggest cities – like Richmond, New Orleans and even Washington.
Lincoln – who taught himself strategy by reading obsessively – had a different plan. He laid out a large map and pointed to Vicksburg, Mississippi, a small city deep in the South. Not only did it control important navigation waterways, but it was also a junction of other rivers, as well as the rail lines that supplied Confederate armies and plantations across the South.
“Vicksburg is the key”, he proclaimed. “We can never win the war until that key is ours”.
As it turns out, Lincoln was right.
It would take years, blood, sweat and ferocious commitment to the cause, but his strategy he’d laid out was what won the war and ended slavery in America forever. Every other victory in the Civil War was possible because Lincoln had correctly understood the key to victory – taking the city that would split the South in half and gaining control of critical shipping lanes.
Lincoln understood the key. Understanding the key is paramount in life and in business.
It’s no secret that many retailers are struggling – especially in terms of the customer journey – most notably when it comes to retail out of stocks. Retail out of stocks have remained, on average, sadly, at 8% for decades.
So what’s the key to finally ending out-of-stocks?
The key is speed and completeness of planning.
First, we all know that the retail supply chain can and should only be driven by a forward looking forecast of consumer demand – how much you think you’ll sell, by product and consumption location.
Second, everyone also agrees (though few understand the key to solving this thorn in our ass) that store/location on-hands need to be accurate.
But the real key is that, once these are in place, the planning process must be at least done daily and must be complete – from consumption to supplier.
Daily re-forecasting and re-planning is necessary to re-orient and re-synch the entire supply chain based on what did or didn’t sell yesterday. Forecasts will always be wrong and speedy re-planning is the key to mitigating forecast error.
However, that is not enough to sustain exceptionally high levels of daily in-stock. In addition, the planning process must be complete – providing the latest projections from consumption to supply, giving all trading partners their respective projections in the language in which they operate (e.g., units, volume, cube, weight, dollars). The reason is simple – all partners need to see, as soon as possible, the result of the most up to date plans. All plans are re-calibrated to help you stay in stock. And the process repeats, day in, day out.
We have retail clients that are achieving, long term, daily in-stocks of 98%+, regardless of the item, time of year or planning scenario.
They understand the key to making it happen.
Now you do too.