Global conflicts, economic uncertainty and volatile demand patterns have thrown supply chains (and the retailers that rely on them) for a loop. In addition, always-on, cross-device shopping behaviors mean consumers are taking their shopping across borders and, in turn, they’re asking more of already strained supply chains.
Experts agree that the supply chain has more impact on the customer experience than ever before. So much impact, in fact, that supply chain snags and delivery delays are the leading cause for wavering customer loyalty.
To effectively respond to these challenges, retailers must bolster their processes and technology stacks to ensure shoppers have access to the products they want, when they want them. While some companies are actively investing in internal, verticalized operations, others are shifting to third-party manufacturing and nearshoring to effectively (and profitably) respond to demand. And overall, retailers are focused on creating visibility and alignment to ensure they have proactive and helpful communication measures in place to support consumers when delays and out-of-stocks hit.
Retail TouchPoints’ News Editor Bryan Wassel spoke with supply chain experts for a recent special report that dug into the issues influencing retailer investments and how specific technologies will support their vision for agile supply chains.
Top Supply Chain Investments
Data standardization and integration with suppliers: A fast, flexible and intelligent supply chain is powered by rich data. Although many retailers are working to break down the silos within their organization, few have ensured complete alignment (and data sharing) with their supplier partners. Data disconnects prevent suppliers and retailers from being on the same page and aligned on supply chain performance, which can prevent retailers from proactively communicating with associates and consumers about product development lead times and delivery timelines.
“Companies like Walmart work directly with the suppliers of their suppliers,” said Bertha Martinez-Cisneros, Coordinator of the Degree in International Logistics at CETYS University. “They are even involved in the negotiation process that affects the cost of the product for the producer — so they negotiate the price of the raw material. Think about socks: they talk to the cotton producer to establish the price of the cotton sold to the company that manufactures them to ensure the quantity of product needed to supply Walmart.”
Warehouse automation: To get their operations back on track after the disruptions of the past two years, retailers are investing in automation to ensure greater levels of performance efficiency and supply chain visibility, according to Ravi Panjwani, VP of Brother Mobile Solutions.
“Shoppers expect their orders faster and they’re less willing to bear the burden of the cost of getting it to their door,” Panjwani said in an interview with Retail TouchPoints. “This, in turn, is driving warehouse and supply chain managers to seek out technologies that minimize costs and human touch points, while speeding up processes.” Warehouse automation can help improve these efficiencies and also help retailers tackle labor shortages.
Private label innovation: The typical retailer manages hundreds of brand partnerships, which opens the business up to lots of supply chain risk. Shipping delays and availability issues can cause a domino effect across a retailer’s entire network of stores, so best-in-class retailers are trying to rely less on these partnerships and invest more in private label products. For example, Trader Joe’s manages to keep new products on-trend, seasonal and unique to the brand by tapping an internal procurement team that spends months on the road to ensure the brand can source what it needs to innovate. This team uses intelligence from the supply market to guide these decisions, which is key to maximizing availability.
Download the special report to get more detailed insights on the technologies and strategies driving the new supply chain revolution.
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