The pandemic has catalyzed supply chain transformation for many global retail enterprises. As a direct outcome, erratic fluctuations in demand have destabilized almost every leg of the global retail supply chain.Today, 96% of retailers are all set to make their supply chains more agile while 90% say they need to be more resilient. All these factors create significant pressure on retail CSCOs as they move from deciding not just whether change is necessary, but how to effectively improve the much needed resilience and agility without lowering margins.
A recent study by Harvard Business Review Analytic Services and GEP, reinforces this fact as more than 72% of companies believe their key supply chain capabilities including supply planning, demand planning, warehousing and logistics, procurement, and inventory management ought to be digitally immature.
So, how can CSCOs bring in the much needed organizational agility without compromising on the quality of processes?
Firstly, they need to focus on the integration of people, process and technology, by simply aligning planning and execution activities to deliver an enhanced and more predictable customer experience. Secondly, prioritize upstream and downstream supply chain operations to match with optimized inventory levels, capacity plans and material flow.
Here is a 3-seed strategy to help CSCOs navigate in this seemingly “no-win” retail environment, which can address the current shocks and create a more resilient foundation for the future.
- Visualize: Put the spotlight on the complete picture to understand the disruptive dynamics currently at play at every stage of the supply chain.
- Navigate: Maneuver through the near and mid term journey to pursue key strategies which help mitigate disruption over the next 12 -18 months.
- Enable: Restructure supply chain networks to ensure resilience for the future and address significant capability gaps which can fuel improved operating models.
Embracing The Top Priorities for Digitally Mature Retail Supply Chains
1. Optimised operating costs
Most retail stores have experienced that enhancing efficiencies of in-store processes across the board can cut operating costs in the long-term. Further, processes like inventory management, optimizing inbound shipments, stocktakes and replenishment can all be streamlined with AI-driven cost-effective technology. The focus should move from doing things cheaply to managing them more effectively.
2. Accurate Data + Increased Supply Chain Visibility
During turbulent times, accurate data, enhanced supply chain visibility, and powerful AI and ML driven analytics can prove to be game changers. A mature granular data-driven model with drill down item-level visibility across the supply chain provides greater decision making capacity, precise demand prediction and inventory optimisation across store networks.
3. Intelligent pricing decisions
Step away from siloed pricing and promotion decisions and adopt dynamic pricing strategies. Price changes for products on promotion must be aligned across all selling channels and finally integrated with the financial plan so that retailers can target the right customers and overcome unwanted market segments while avoiding margin degradation.
4. Demand- driven inventory & capacity planning strategies
Reliable demand forecasts are integral to order, allocate, and replenish inventory and plan capacity levels accordingly. Retailers can ensure better margins through proactive and optimized markdowns and improve capacity utilization through better visibility into capacity requirements and proactive bottleneck elimination.
At ThroughPut, we take supply chain visibility seriously. We believe that in order to streamline retail operations in good times and also maintain business continuity during disruption, CSCOs need real-time, data-driven actionable insights.
Meet the ThroughPut team @ The Retail Supply Chain & Logistics Expo, taking place at London’s ExCeL on the 2nd & 3rd March 2022.
Join us as we showcase our solutions to decode the impact of AI-driven Retail Supply Chain Optimization and how we create unparalleled excellence for today’s retail supply chains, through Visibility, Collaboration & Planning.
Alla Anashenkova, Head of Product Management and Sales Engineering at ThroughPut Inc.,will be sharing leading competitive strategies on leveraging AI to improve material and free cash flow across the end-to-end supply chain. In this session, she will cover specific use cases & case studies to showcase how companies can use AI to leverage their existing data in advance to sense shifting demand patterns, segments and prioritize the SKUs for each period to optimize their Supply Chains & Operations to increase Output, Inventory Turns & Profitability.
We are eager to solve your retail supply chain challenges through our Award Winning AI-powered Demand Planning Solution. Just like how we have successfully optimized 100,000+ SKUs for Europe’s biggest retail chain and delivered million $ savings for them, all in a matter of a few weeks (not months!)
Click here to join us at our booth.