Lead Time Forecast in Today’s Customer-Centric Retail Environment

As we discussed in part one of our Lead Time Forecasting series, time is money and an accurate lead time forecast is critical for your business. Lead Time forecasting is considered the time from when a Purchase Order is placed until the goods are ready and available to sell or ship off the shelf. This week we take a look at how a lead time forecasting impacts your customers

Does Lead Time ruin your Customer-Centric Sales Environment?

Are you like the many retailers focused on delivering a customer-centric experience? Amazon.com leads the industry in providing a true customer-centric experience that is focused on delivering the best possible customer experience and believe that by delivering this experience its business will continue to grow. Based on the customer-centric model, let’s take look at how an inaccurate lead time forecast can have a real impact on your customers’ experience.

Lead Time Forecast in Customer-Centric Retail

In a traditional retail culture, if you sell 1000 units a day of item X and plan on the lead time taking 10 days but the goods are not available for 12 days, then you just generated 2000 lost sales units. Now let’s look at this from a customer-centric perspective. Customer A relies on your store to stock item X. On day 10 Customer A arrives to find your shelves out-of-stock. He is disappointed in not finding the needed item and pulls out his smartphone to find the closest retailer with item x in stock. Customer A leaves your store with a bad experience. Due to an inaccurate lead time forecast, you have a dissatisfied customer and potentially a lost customer. Now multiply this by the 1000 units over the 2 days and you have 2000 unhappy customers.

Now more than ever technology puts the power in the hands of the customer. Knowing the correct lead time and the ability to correct for changes in lead time is important to you, your vendor/supplier and ultimately your customer. Your ability to deliver a customer-centric solution relies on a complete picture of your forecast including lead time.

Join our Blog, share your thoughts today: How does Lead Time impact your Customer-Centric Retail Environment?

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Stuart D

Stuart Dunkin is a strategic visionary who leads by calling on his broad range of experience as a former retail executive as well as a consultant for top retailers and for the E3/JDA software company. He founded Data Profits to solve a real-world problem plaguing retailers today – the disjointed relationship between supply chain data, people and business goals. He has experienced first-hand the challenges and frustrations that occur when decisions are made based on wrong data, which often leads to the wrong actions being taken with crippling results like overstock, out-of-stock, and increased working capital.
Stuart graduated from Auburn University, with bachelor of science in business administration.