The supply chain spans all movement and storage of raw materials, inventory, and finished goods from the point of origin to the point of sale. As competition in retail grows, retailers are responding by increasing the variety of their products and number of channels, becoming more price-competitive, and striving for customer-centricity.
The retail supply chain management is one of the busiest supply chains. They must constantly innovate to serve customers’ changing needs, shift retail formats, and focus on price and quality. It is essential that retailers closely monitor the supply chain issues to ensure that the products are free from damage and are always on the move to provide a low cycle time.
Here are six supply chain challenges & tips to overcome supply chain issues in 2022
1. Managing Inventory
One of the biggest challenges for retailers is managing inventory. Many retailers have hundreds of locations and carry thousands of items at each place. Three specific inventory issues getting a lot of attention are:
Retail Out of Stock means when an item is not in stock or unavailable for sale, as intended, at a store. We can further clarify into
-Store level out of stock (no inventory available at a specific store).
-Shelf level out of stock (inventory in the store, but the item is not on a shelf designated for the item).
Retail Inventory Shrinkage means loss of inventory through theft or error. The most significant factors for inventory shrinkage are theft by employees and shoplifting by consumers.
It refers to inventory that is at the end of its product life cycle and also referred to as “excess” or “dead” inventory. The inventory has not been sold or used for an extended period and is not expected to be sold in the future.
Retailers need collaborative efforts to solve this issue, including planning, forecasting, and replenishment. A futuristic solution infused with retail analytics, multi-store, and multi-dimensional view of consumers can help retailers dramatically improve their inventory management.
2. Automation and Data Integration
Retailers have more opportunities for insufficient data to destroy customer satisfaction and damage the efficient flow of information across the supply chain. Additionally, corrupt data can immediately stop the physical flow of products as all supply chain participants lose visibility into what is being sold, what is available, and what is needed.
Automation powered by business intelligence is helping companies use data more effectively and efficiently than ever before. By breaking down the silos, separate data streams that previously had no way of interacting with one another in retail data, analytics helps disparate business sections communicate and cooperate as a single entity.
Automation allows data to be accurate and up to date, and more importantly, the information can be shared among staff and potential vendors. It reconciles purchase orders and billing. If the efforts are collaborative, it can also enable re-purchasing.
You can quickly move to Plan B if orders and shipments don’t meet your initial expectations by automating the flow of information with your suppliers.
3. Meeting Customer Expectations
The retail supply chain struggles to keep up with changing customer demand as they must stock more seasonal rages and assortments to satisfy their customers. Additionally, they must provide such a large variety of goods just-in-time to serve customers dispersed across multiple markets and channels.
Customer demands fast & free shipping, which is pressuring everybody in the Supply Chain. Retailers need to improve their ability to sense demand on a daily basis rather than a traditional weekly or monthly basis. Use a combination of analytics with business intelligence such as daily order history for each customer and integrated consumption and shipping data to produce more responsive short-term daily demand.
4. Omnichannel Integration
The problem in the retail supply chain arises when retailers have to maintain consistency across product offering, quality, and customer experience. This has to be implemented strategically as retailers have to streamline their inventory management and orders and transform business processes.
Increased visibility gives the retailer a better view of the entire supply chain to identify bottlenecks and other inefficiencies. Tools and technologies have been introduced to see the entire supply chain as a whole.
5. Employee Turnover
The rate of employee turnover for retail stores often runs at rates that would devastate organizations operating at the upstream echelon. The impact of staff turnover includes hiring costs, training costs, opportunity costs, employee morale, and customer satisfaction.
Retailers who invest in their people and pay rightly can prevent employee turnover. The supply chain needs the right mix of hard-working people who can quickly learn to work with the most advanced tools that will help them make smarter forecasting decisions, replenish products, and move everything to stores and delivery points.
With the right people in place, teams will be able to maximize productivity and deliver fresher sales and products to customers.
6. Keeping Up in the Technology Arms Race
Retailers’ concerns about keeping up with the latest technology solutions and demands can be seen as an extension of normal competitive pressures. When a new tool is brought to the industry for analysis, forecasting, or other aspects of logistics, it is natural to worry about your competitors investing in it.
Are your competitors already taking advantage of new technologies and preparing to leave you behind?
The pandemic has amplified the need for greater supply chain optimization and the need for faster decision-making. When it comes to the retail supply chain management system, retailers will need to prioritize omnichannel, be nimble, and leverage emerging technologies such as automation and retail analytics with BI to stay competitive and realize success.
Your business should leverage technology like ChainDrive supply chain management system to get a good pulse on everything from customer relationship management (CRM) to bringing more visibility to your supply chain. With ChainDrive, you’ll be better equipped to ensure a seamless process from distribution facilities to the store shelves that enable you to meet consumer demand and supply chain challenges. So, your business can grow more effectively and profitably.
For more information on managing retail supply chain challenges, retail logistics, retail supply chain management and omnichannel integration, request a free demo with one of our retail supply chain software experts.