Who is sick of going to conferences and hearing all the big wigs s with no common sense talk about big data? Why is it that when one buzz word comes out in the technology ecosystem everyone just continues to ride the word wave. Who is making up and driving all those Buzz words? I have no doubt today I will read the phrase “Thought Leadership” again. Now that is out of the way today I wanted to discuss a few topics on the importance that Data plays in the supply chain.
Investigating the use of data within a business
Recently I have been working with a retailer that sells marine equipment. The story is interesting as it investigates the origins of data, location created, what systems hold the data, which the data is it given to, how it is sent and why is it sent.
We started off by having a conversation about his business. The business sells Marine Equipment however holds no stock. A common industry that has now been created by the ease of data management is the Drop Shipping industry.
Here is an example of a web savvy business or internet marketer that has:
1) Purchased a domain name
2) Built a WordPress website
3) Signed up for Amazon affiliates
4) Purchased a plugin to stream the Amazon feed to his website
5) Now operational
This business model almost appears to be a get rich quick scheme. Unfortunately there are some well-known facts that cannot be ignored. Firstly the margins are terrible so to make any decent money the retailer must pump serious traffic through the website. Secondly there is a high risk of duplicate content for utilizing the same data feeds from Amazon that everyone else is using. There are most likely a number of other challenges.
Why am I mentioning this business case?
What this model indicates is that data is more flexible and can be easily manipulated into the right format and the right language to be provided to the right person. It is amazing to realize how easy it is to push product feeds from a wholesaler through to a drop shipper’s website. Drop shipping is now a fairly common sales channel in which website and retailers do not have to keep products in stock or even at their location. Instead, the retailer can partner with an importer or wholesale supplier that stocks its own inventory. Once items have been purchased the drop shipper simply transfers the customer orders and shipment details to them, and they ship the goods directly to the customer. One of the largest benefit of drop shipping is you don’t have to worry about shipping, fulfillment, storage costs, purchase costs, importing or duty costs or have to worry about any type of inventory issues as the data is fed to your website as a data feed.
There are companies now that specialize in the supply chain of data. A quick glance over the internet you will discover companies that join wholesalers and importers to the drop shipper market. This business in itself is an interesting concept as they gain revenue streams from the wholesaler side by marketing the connection to more channels to sell. The connectors also make a revenue stream from the retailers by charging access fees to the stock. This to me appears to be a very clever business model making money on the logistics or moving of data.
Many businesses rely on the information displayed on their websites or shopping carts to be accurate and up to date with the latest sales activities. It is important to have synergy between the EDI links of data transmitted via an electronic data interface between manufacturers, wholesalers and retailers.
Data in the drop shipping supply chain
It is the data feeds role when dealing with order fulfillment as good data is the cornerstone for online retailers working with their suppliers. Once orders have been made online and payments have been processed, the orders need to be converted into the right format of data to be sent back to the supplier for fulfillment. Once generated these orders are picked from the supplier’s warehouse and shipped directly to customers. Having a seamless process allows items to be dispatched quickly at a lower price without the retailer requiring additional warehousing or shipping costs.
Technology improvements and shift from B to B to online
Warning more buzz words on approach. With a shift from Bricks and Mortar shopfronts to “Bricks and Clicks”, the type of technology used is worth discussing. In the past traditional data movement has been around EDI interfacing and the ability to integrate via traditional commerce standards. Many traditional businesses wholesalers and retailers have spent an absolute fortune on legacy style systems or on premise inventory or warehouse management systems. Moving data seamlessly from legacy style systems to the new formats is a common challenge.
Watch out! Here comes the cloud
Been to NRF or Online retailer? Well unless you have been sleeping under a rock the new age of cloud technology poses an interesting alternative with lower costs and higher flexibility. This then poses another data question for the traditional retailers as they ask how I get my data from my legacy system to these new cloud operators. There are companies that provide the bridge between traditional Electronic Data Interchange services and cloud or online retail shopping carts, in turn this allowing retailers to expand their operational reach by either.
There are a number of business that have had made a large investment traditional business software. Some companies have custom designed unique software in place as they were operating well before the excitement of the cloud. Typically these businesses are looking to not replace the existing systems and processes integrated into their businesses. In many cases businesses are happy to simply have a bolt on or an extension as long as the data in the supply chain is smooth and seamless with their current practices.
Data can also be considered to be the blood of the business with it being required to flow through most systems to sustain and empower several different business functions from sales, CRM systems, marketing, warehouse, and accounting. Data needs to flow between internal business units, flow in from suppliers and flow out to potential sales channels. Having the right systems to interpret and provide in the right format at the right time is an essential ingredient in the supply chain.
— July 20, 2015