Supply Chain Disconnect
Effective retailing technology allows companies to manage inventory by efficiently storing, shipping, and stocking items that its customers want. Inventory management is key to a company's success or failure, and Kmart seems to be the poster child of poor supply chain management. Since as far back as Joseph Antonini's leadership, Kmart has had logistics issues. 1 Another recent CEO, Chuck Conaway, went so far as to admit that supply chain management was “the Achilles Heel” of Kmart. 2
“Supply chain management” is simply the latest buzzword— replacing “inventory management”—used to describe the information flow from cash register to store computers to an orderentry system that keeps product replenishment in sync with store needs. Supply chain efficiency, says Liz Simpson, a business commentator who writes regularly for a U.K. supplier magazine, is knowing what each store needs through an IT network that enables inventory to be supplied directly from the supplier, rather than through enormous warehouses. That's what Wal-Mart has been striving to do for years, and where Kmart should be headed. Sadly, Kmart hasn't made much headway of late.
Boasted Sam Walton in his biography, years ago, “I think it's fair to say that our distribution system today is the envy certainly of everyone in our industry, and in a lot of others as well. We