Supply chain problems plague retailers

Written by By Ernie Sandoval, CNN

A supply chain generally runs smoothly when companies ship billions of dollars of goods every year. And businesses rarely run into substantial bumps in the road when it comes to pricing or inventory.

A few years ago, though, when things started to go wrong, it became the talk of the town.

What was so unexpected was the sudden burst of complex problems — once unheard of — involving over 50 companies involved in a single multinational transaction.

Tilney Best Buy, a London-based retail banking business, acquired Datalogix, a marketing analytics company located in New York.

Discover, a payment service company, acquired Zipcar, a car sharing company in the United States.

Kraft Food Group, an American company, and World Cup yogurt producer An��cearii merged.

Walmart acquired and opened its online market places.

In total, 25 companies made the journey from one system to another and some struggled or halted altogether. Since then, every one of the major companies involved has worked to make things better, said Terry Lewis, an executive with Datalogix.

Supply chains are increasingly complicated, and that process “is an area where a bit of ill will is being passed around from one business to another,” he told The Local , a German newspaper.

Datalogix helps retailers and brands execute large, complex promotional campaigns.

Each one of the five problems eventually found its way onto board charts of the UK’s Serious Fraud Office, and forced the companies involved to cooperate with regulators.

Datalogix’s reports revealed that it was making more money because of how its clients were selling foodstuffs. In fact, there was a glut of Walmart items in its warehouses, which meant the business was “overcommitted” by 200%.

The company wrote off an estimated $300 million in inventory.

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