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Why do leading companies struggle with stockouts in online channels?
Some of the most admired companies, industry leaders, struggle with stockouts in the new age online channels like eCom and Quick Commerce. Their age-old supply planning and execution systems, fine tuned over decades, perform poorly compared to the start-ups operating in these channels. Why is it so?
Conventional channels like General Trade and Modern Trade have a multi-echelon distribution system, with inventory buffers available at each node. On the other hand, online channels typically operate in a lean manner. D2C channel, like selling directly to consumers from company’s website, has no intermediate inventory node.
Leaner channels require more agile operations to succeed. New competitors, born in the digital age, operate with planning and execution systems which are much more agile.
If old-age companies want to catch up or beat their new age competitors, they must focus on making their supply chain more agile.
The good news is that agility can be improved channelwise…