Retailers Lack A Well-Articulated Supply Chain Strategy, According to BearingPoint Study

Kurt Peters

McLean, Va., December 1, 2003 - Four out of the six major retail segments lack a well-articulated supply chain strategy outlining an inventory management approach, according to a survey-driven study, “Inventory Management 2003: Communication and Technology Bear Renewed Promise,” developed by BearingPoint, Inc., (NYSE:BE), one of the world’s largest business consulting and systems integration firms. This is BearingPoint’s third annual study on inventory management produced in conjunction with Chain Store Age and appears in the magazine`s December 2003 issue.

The survey represents the opinions of executives from an extensive cross section of the retail industry, including department store, big box, specialty, drug store, home improvement center and supermarket retailers, each of whom generate $500 million or more in annual revenue.

“Institutionalizing the day-to-day operations with a well-defined supply chain strategy can help focus an organization and enhance its capability for managing inventory,” said Kevin Boyanowski, a managing director with BearingPoint’s Retail practice. “The dynamics of the business and the ever-changing demands of the consumer can alter the key elements of any strategy. We believe that these strategies can never be stagnant.”

Among the study’s key findings:
• The Supermarket, Department Store, Home Improvement Center and Drug Store segments had the highest number of respondents who did not have a supply chain strategy;
• 44 percent of those surveyed indicated they had no consistent approach to inventory management;
• 96 percent cited the need for further employee training to help maintain inventory control and integrity;
• 20 percent indicated a year-over-year increase in the use of communication tools with suppliers.
• 53 percent selected radio frequency identification (RFID) as an emerging tool to help eliminate obstacles to maintaining inventory integrity.

"Technologies such as RFID and automated inventory alerts will alter the physical inventory landscape in the years to come," said Boyanowski. "As merchandise is sold or missing, such rapidly developing technology will proactively allow store associates to address inventory levels and quickly identify opportunities."

Other emerging inventory management trends revealed in the study include: increased internal and external collaboration in the form of category management and vendor-managed inventories (VMI); the drive to balance customer demand with floor space; the increased adoption of the Internet as a tool; and the momentum to improve the customer experience with in-store kiosks and in-store terminals.

Copies of the study are available at http://www.bearingpoint.com.

About BearingPoint, Inc.
BearingPoint, Inc. (NYSE:BE) is one of the world’s largest business consulting, systems integration and managed services firms serving Global 2000 companies, medium-sized businesses, government agencies and other organizations. We provide business and technology strategy, systems design, architecture, applications implementation, network infrastructure, systems integration and managed services. Our service offerings are designed to help our clients generate revenue, reduce costs and access the information necessary to operate their business on a timely basis. Based in McLean, Va., BearingPoint has been named by Fortune as one of America’s Most Admired Companies in the computer and data services sector. For more information, visit the Company’s website at www.bearingpoint.com.

This press release may contain forward-looking statements, the accuracy of which is necessarily subject to risks, uncertainties and assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and the factors discussed in our most recent Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Lizette Kodama
BearingPoint, Inc.
(212) 954-2461


BearingPoint, Management, Manufacturing, marketing, supply chain