The Supply Chain Black Hole
Opinion: Some e-tailers are discovering the supply-chain black hole and trying to find ways to manage it.John Charleson runs the IT department for a Toronto grocery chain called the Longo Brothers Fruit Market and his people have been using online sales to add more efficiency into the sales cycle. By having both online and offline feed off of the same inventory, grocery items with a limited shelf-life have a much better chance of being sold in time. But hes run into the recurring problem of retailers trying to have real-time inventory visibility. Heres the scenario: an online customer wants to buy six widgets. The Web siteor the customer service employee on the phonereports, "No problem. We have nine in stock." The purchases are made and the inventory is reduced to three. And heres the problem: at the time the Web customer was making the inquiry, the store didnt really have nine widgets that were clear for sale. Six of those widgets had been caught in the (cue scary music) Supply Chain Black Hole.
The cause: The black hole exists the moment a product leaves the shelf. It continues as the item rides around the store in the shopping cart, persists as the customer waits in line and, finally, the product emerges from the darkness when the item is scanned and paid for.