Best Buy Caught in Supply Chain Conundrum
This past holiday season caught Best Buy Co. in a strange predicament. High demand for electronics depleted store shelves more quickly than its supply chain could replenish, resulting in as much as $100 million to $200 million in lost revenue.
Despite best efforts to match what consumers are buying with advanced supply chains, the retailer’s lean inventory practices didn’t keep pace. Best Buy has invested in e-commerce tools, as well as other online strategies, in an effort to capture sales being lost to Amazon.com.
The continued growth of e-commerce has fractured traditional forecasting tools, and contributed to challenges facing retailers when trying to determine what, when and how much stock is needed on store shelves. Shortages are expected to continue being a drag on Best Buy’s revenue in the first half of 2017.
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