I got a first-hand look at the retail industry's struggles with supply chain visibility this past Christmas season. My mission, for much of the month of December, was to track down a pair of the wildly popular Ugg boots for my 14-year-old daughter.
No problem, I thought. A quick trip online should do the trick. However, a check of several Web sites revealed that the specific style of boot I needed was on back order until April. That raised an immediate red flag; it would seem that the Australian company that makes these boots has some serious customer forecasting issues.
Unnerved, I headed out in a snow storm—the third storm in eight days— to a local shoe retailer. I'd checked its Web site almost every day, and the big delivery of Uggs was supposed to arrive the morning of Dec. 20, five days before Christmas! This was it. Either score the top item on my daughter's wish list now, or have one unhappy teenager opening gifts on Christmas Day.
I received ticket No. 26 when I entered the store shortly after 8: 30 a.m. Seemed like a good omen. A short time later, the store manager announced "good news and bad news." The good news, she said, was that the truck of Uggs was due to back up to the store at 11 a.m., over an hour earlier than originally planned. The bad news, she informed the crowd (which had by now swelled to more than 100), was that the delivery would contain 10 fewer cases of Uggs (120 pairs) than the store had expected.
How could this be? Again, my thoughts turned to supply chain visibility. How could the delivery be 10 cases short? What type of forecasting tools were they using? Was a malfunctioning WMS system or an out-of-date DC going to cost my kid a happy Christmas? Why don't they put RFID tags on these boots, anyway? Then they'd have much greater supply chain visibility. And at $149 a pair, it would certainly cut down on costly shrinkage.
Then, something happened that helped restore my faith in the Uggs supply chain. The store clerk had obtained a fax of the manifest listing the products included in the delivery. All the customers lined up, 1 through 100-something, and the store clerk asked each customer what style of boot he or she needed. If your product wasn't on the truck, no need to wait around for another 90 minutes till product was unloaded.
I ended up with the correct size boot, and the correct style, but in the wrong color, although it was barely a shade off. My reasoning was that if my daughter didn't like what she opened on Christmas Day, then she could simply swap them out for the right color when the store's next shipment arrived in January.
Hey, after witnessing Uggs' supply chain visibility in action, we might as well test its reverse logistics process too.