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Global Logistics Focus Sept.21, 2015

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18A THE JOURNAL OF COMMERCE SEPTEMBER 21.2015 SPECIAL REPORT GLOBAL LOGISTICS FOCUS 2015 U. S. RETAILERS ARE "destocking" high levels of inventory, while dealing with "unprecedented levels" of out-of-stock inventory, both online and in stores, according to GT Nexus. In a consumer survey, the supply chain technolog y company found that 75 percent of shop- pers experienced an "out-of-stock" moment at a store in the last 12 months. The record online was hardly better: 63 percent of consumers suffered an e-commerce "out-of-stock." "Companies are all trying to run lean inventories, but we're still find- ing stock-out levels of 55 to 65 percent," Greg Kefer, vice president of corporate marketing, told The Journal of Com- merce. Stock-outs cost sales, while overstocked inventories can cost retail- ers millions of dollars a day. The GT Nexus and YouGov survey of 1,000 consumers show that many retailers are "wasting a bunch of money (on inventories), but they're still failing customers (with stock-outs)," Kefer said. Balancing inventory in an uncertain economic climate without doubt is a challenge. U.S. business inventories rose 3 percent year-over-year in June to $1.8 trillion, climbing 0.8 percent from May, the largest sequential increase since January 2013, the U.S. Census Bureau said. Census data show U.S. retail sales rose 1 percent in June, but inventories rose 4.1 percent. The need to serve in-store and online customers through omnichannel supply chains complicates inventory manage- ment, forcing retailers to rethink the amount of inventory they need to keep on hand at all times, where and how long they store it and how they ship it. What's needed, Kefer said, is real supply chain visibility, not just track- and-trace capabilities for shipments but broader visibility into the pipe- line of goods and supply chain data potentially connecting hundreds or thousands of partners. "Quite frankly, most companies have underinvested in the back-end," he said. "They've all gotten religion about sourcing and deal- ing with longer shipping lead times. But they don't have the IT infrastructure to manage inventory in the way they need to. Based on the results of this survey, that's costing them sales." In addition to 75 percent of in-store By William B. Cassidy OUT OF STOCK? OUT OF LUCK Retailers are striving to balance lean inventories while keeping customers satisfied, survey shows "COMPANIES DON'T HAVE THE TYPE OF SYSTEMS THAT ALLOW THEM TO RUN AN AGILE INVENTORY."

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