Top 11 Supply Chain Priorities For Retail Companies in 2011

Supply chain consultant Tompkins Associates has released its Top 11 Priorities for Profitable Growth in 2011 report, citing three key strategies retailers should focus on in the coming year: a renewed focus on supply chain best practices, a continued need to keep inventories in check and a push to reach more online customers.

The complete list of Tompkins’ Top 11 Priorities is below:

Retail Best Practices: Best practices can have significant impact on a retailer’s bottom line, as well as their customer service. Leading practices in sourcing, transportation, inventory policies and distribution will provide significant value and increase competitive advantage.
Speed to Market: Retailers around the world are striving to reduce the amount of time between product design and placement on a store’s shelf. Competition, consumer taste and trends all increase need for speed to market. To improve speed to market, design effective and efficient supply chains – from planning through transportation to the destination.
Reduced Inventory Levels: Over the last two years, reduced inventory levels have become typical for retailers. This has created historic investigation, dedication and execution efforts to reduce inventory at the store and distribution center. Understanding how to improve overall inventory position and what tools are available (such as new software) is essential.
E-Commerce: Consumer sophistication, ease of access and retailer incentives have all boosted online sales. From network analysis, DC optimization and improved shipping practices, retailers are evaluating every angle while enhancing their direct-to-consumer service.
Uncertainty, Agility and Visibility: As the recession ended, a new norm has emerged: “Uncertainty it certain.” It is best for retailers to accept this new norm and implement agile processes that allow them to move forward. Realizing that they cannot control uncertainty and that they must respond to it can help achieve profitable growth. (Read more about how companies are dealing with uncertainty in this executive briefing from the Tompkins Supply Chain Consortium.)
China as a Market: The retail market for fast-moving consumer goods (FMCG) and luxury items is growing. Retailers who previously only sourced in China now want to enter the world’s fastest growing economy and sell in China. It is important for retailers to understand the market of Chinese consumers and plan smart entry strategies.
Transportation Spend Optimization: Often in retail, inbound and outbound transportation is managed by multiple organizations and systems. Integrated transportation planning and execution can increase utilization of private or dedicated assets, reduce errors and administration time in freight audit and pay and reduce the number of cameras.
Workforce Management: For retailers, a workforce management solution can improve scheduling, automate transmission of hours to payroll, ensure compliance with labor rules and track information about employee utilization.
Regulatory Issues: Retailers need to proactively understand and address legislation changes. For example, the Food & Safety Act change, in which food retailers are required to trace produce from the grower to the store shelf, will dramatically affect the supply chain. Disadvantage: added cost. Advantages: reduced shrink and increased sales.
Reducing Retail Shrinkage: As companies reduced staff and increased workloads, visibility decreased and best practices were ignored. Technology and better store surveillance equipment can be deployed to reduce internal theft, shoplifting, supplier fraud, accounting errors, warehouse errors and falsified store returns.
Increased Consumer Intelligence: With the ability to instantly access product information, technology is changing consumers’ buying habits. As retailers adapt to the consumer, they need to address the changes within their own supply chains. Organizational restructuring to eliminate silos, operational process reviews, improved forecasting tools and strategic planning will all be necessities in the coming year.