Digital Product Fitting in Retail Supply Chains: Maturity Levels and Potential Outcomes
Journal article, 2019
Purpose – In retail, product fitting is a critical operational practice. For many products, the operational outcome of the retail supply chain is determined by the customer physically fitting products. Digital product fitting is an emerging operational practice in retail that uses digital models of products and customers to match product supply to customer requirements. In this paper, we explore potential supply chain outcomes of digitalizing the operational practice of product fitting. The purpose is to explore and propose the potential of the practice to improve responsiveness to customer requirements and the utilization of existing variety in mass-produced products.
Design/methodology/approach – A maturity model of product fitting is developed to specify three levels of digitalization and potential outcomes for each level. Potential outcomes are developed based on empirical data from a case survey of three technology-developing companies, 13 retail cases and a review of academic literature.
Findings – With increasing maturity of digital product fitting, the practice can be used for more purposes. Besides matching product supply to customer demand, the practice can improve material flow, customer relationship management, assortment planning, and product development. The practice of digital product fitting is most relevant for products where the final product configuration is difficult to make to order, product and customer attributes are easily measurable, and tacit knowledge of customers and products can be formalized using digital modeling.
Research limitations/implications – Potential outcomes are conceptualized and proposed. Further research is needed to observe actual outcomes and understand the mechanisms for both proposed and surprising outcomes in specific contexts.
Practical implications – The maturity model helps companies assess how their operations can benefit from digital product fitting and the efforts required to achieve beneficial outcomes.
Original/value – This paper is a first attempt to describe the potential outcomes of introducing digital product fitting in retail supply chains.
Digitalization of retail
Supply and demand
Digital product fitting