Table of Contents
More Supply Chain Content
Get the latest e-commerce industry news, best practices, and product updates!
Table of Contents
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More Supply Chain Content
Get the latest e-commerce industry news, best practices, and product updates!
Table of Contents
More Supply Chain Content
Share This
Get the latest e-commerce industry news, best practices, and product updates!
The retail landscape is an ever-evolving platform as businesses race to touch the leading milestones. One of the quintessential goals in the retail industry is to provide the best quality customer service. As the traditional brick-and-mortar retailers expand their online presence with new offers to re-define the online shopping experience, vertical players like Amazon, Bose, and Nike push their direct-to-consumer service through both online and offline modules.
With the current e-commerce scenario, a common goal for all companies is to meet the customer needs as comprehensively as possible, and adapting their supply chain is one of the primary hiccups faced.
E-commerce service is much more than traditional brick and mortar or online fulfillment, as retailers often have high stakes. Statistics show that about 84% of the total consumer base stated that they are unlikely to return to a brand or a service again if they already have a poor delivery experience. Around 92.6% consider the delivery experience to affect their brand loyalty significantly. Thus, the retail base must provide the customers with an optimized product cycle.
Adapting a successful retail supply chain network can bring in a massive value for retailers, e-tailers, and other sections associated with supply chain management. Supply Chain Management is the most effective way of synchronizing the whole process from the production line to the end consumer. Retail Supply Chain Management ensures effective inventory control and an accurate product delivery process, despite the most challenging aspects of online selling.
What is a Retail Supply Chain?
For any business to succeed in the present era, it is critical to adapt to the latest measures of providing services to improve profitability. With the ever-increasing dynamic market and the advancement of technological innovation, there is a subsequent change in the retail market. The continuous change in the consumer market demands a smooth and comprehensive inventory decision and distribution management.
The retail supply chain summarizes the products, information, and financial aspects in each step from supplier to manufacturing units to storage to wholesaler to retailer, and finally, to the customer. With the aim of ultimate customer satisfaction through a minimum investment, the retail supply chain involves managing the flow of material and information. By optimizing retail supply chain decisions, the company can maximize profits.
How does the Retail Supply Chain work?
The retail supply chain encompasses every step from obtaining the raw materials to storage, manufacturing, shipping, and delivering to customers. However, if closely monitored, each step in a supply chain can seem overwhelming if treated separately.
A successful retail supply chain aims to shorten the product cycle and deliver it to the customer in the shortest time possible without paying outrageous amounts. It might seem easy to overlook the importance of a supply chain and undermine its value, but the retail supply chain process optimization results in more efficiency along with affordability.
Many retail bases use shipping software, 3PLs, or integrated companies to increase efficiencies and automate their supply chain process. The retail supply chain streamlines the supply chain in the following ways:
Optimize Storage Space / Automated Inventory
Storage and inventories are the most crucial step in a supply chain. Poorly designed warehouses or extra spaces are the most costly factors. Thus, an effective inventory strategy can help reduce the storage space and increase productivity and profitability.
Automated warehouses are the future of e-commerce. It enables the accessible collection of data across the supply chain, enabling real-time collaboration among all the departments. Results? A drastic reduction in overhead costs and manual errors.
Multiple Supply Input
A single supplier strategy eliminates the possibility of competition and can cause costly delays. Using various suppliers enables a company to avoid spending on less than satisfactory services, with the constant competition for better quality product supply at a competitive rate. Multiple input strategy effectively reduces return costs, ensuring higher revenue with higher profits.
Optimize Faster Supply Movement
Finding ways to expedite supplies only when needed lowers warehouse costs and reduces product damage. The most convenient way to shorten the supply route is by creating optimized multiple inbound routes. This helps a company reduce the cost of after order replenishments and reduce overhead costs.
Evaluate Market Demand
The most efficient way to acquire and study customer demand patterns is to have clear access to a large database across the entire supply chain. Analyzing the current market demand can ensure real-time visibility of the storage and inventory and make use of it strategically.
Optimize Manufacturing Product Line
After evaluation, the retail supply chain management advances to the activities needed for manufacturing, production, product testing, and packaging. Manufacturing is the most crucial metric-intensive step in the supply chain, which provides a clear idea of quality levels, production input, output, and productivity.
Strategize Logistics Network
Transportation is one of the major areas in a retail supply chain. A reliable and affordable logistic network isn’t an easy find. However, adapting to customize logistic network designs can suffice the needs and efficiently manage the supply chain.
What is Retail Supply Chain Management?
All of the steps required to ensure the smooth transition of the products to the consumers’ doorstep are collectively known as the retail supply chain. A deep understanding of the demand market and optimizing the retail supply chain processes to increase both speed and efficiency calls for the defining strategy of retail supply chain management.
The difference between retail supply chain management and other supply chain management lies in the volume of product movement in the retail industry. Retail supply chain management calls for close monitoring and maintenance to ensure the process is free from any significant defects in the extremely low product cycle time.
Why is Retail Supply Chain Management Important?
National Retail Federation (NRF) states that more than 65% of the consumers lookup for free shipping thresholds before adding a product to their shopping cart. 39% of the online shoppers prefer one to two days of shopping and around 29% discard the product due to the unavailability of fast and free shipping.
Thus, the importance of retail supply chain management is a two-way road, beneficial for both the retailers and the customer base. Additional capabilities include:
- Real-time monitoring of the inventories and order system.
- Provides an efficient structure for goals, boosts productivity, and increases revenue.
- Suggest concrete and operational methods for companies to evaluate their procedures.
- Acquire practical and functional protocols for easy inventory management and order fulfillment.
- Ensure high-quality customer service and satisfaction.
How do you lower Retail Supply Chain costs?
Retail supply chains in modern times are more complex, intricate, and widespread, leading to a considerable probability of risks and financial challenges at each step. The supply chain strategy contributes more to the everyday operating expenses of a company. Thus, the implementation of cost reduction strategies results in long-lasting management with an improved budget.
However, there is nothing called an exact cost reduction strategy for businesses to follow. Retail Supply Chain strategies help by typically following some basic methods to create a cost-efficient supply chain process that develops over time with the business.
Optimized warehousing
Inventory and storage contribute to one of the most enormous financial outlays in retail supply chain management. Thus, warehousing and inventory have to be fully optimized and operational as per market demand to reduce overall performance and costs. This will result in lowering some of the basic cost-efficient measures like space hoarding, damaged products, or heavy packages. Supply chain analytics can help automate the storage facilities, which can reduce the overall workforce and cut costs by a significant amount.
Hiring the right people
The human resources in an industry can either speed up or slow down against the market demand. Thus, choosing a suitable employee base can increase efficiency and process the orders promptly and are easy to interact with and optimize the staffing as and when needed.
Set up a customized shipping and transportation facility
The fulfillment is the most significant and most expensive factor in the Retail Supply Chain. Thus, consolidating shipments in a customized manner or taking help from outsourcing partners is proven highly beneficial in lowering operational costs.
Embracing technology and automation
Implementation of the right technology can appear to be a considerable investment, yet they are truly beneficial in the long run. NRF analytics shows that as of March 2019, the annual labor expenses for a warehouse with 150 employees amounted to $4 million, with average performance.
Though automation has quite a questionable reputation in most sectors, if implemented correctly, it helps in creating the most efficient supply chain with reduced labor costs. Minor improvements in storage monitoring, preparation of orders, product tracking, and data interpretation can be more efficient if automated. Technology helps in saving a lot of money without compromising the operation.
Retail Supply Chain Best Practices
An optimized strategy needs to operate smoothly to provide excellent customer service. At the same time, it is also essential to implement a positive transition experience for the workforce.
A company can reap the best out of the strategies with a few basic yet effective practices like:
Involving executive leadership
While an automated system is self-sufficient, yet encouraging the leaders to invest in retail supply chain management provides a reliable anchor for the new ways. This helps in ensuring constant and consistent interaction channels and smooth processing.
Incorporating strategic technologies
Retail Supply Chain Management is a more complex process. Thus, implementing the right management software and applications helps integrate the system and boosts the overall performance.
Investing in multiple shipping channels and software
Incorporating multiple shipping lines helps in easy and fast customer service. An efficient, customized shipping software helps retailers organize, process, and ship orders reliably and affordably.
However, most retail supply chains might not have the infrastructure to specialize in logistics, third party logistic(3PLs) partners are an efficient way to outsource the fulfillment process, at an affordable cost.
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FAQs
Retail supply chain management is the way of optimizing the processes associated with a supply chain. It maximizes speed and efficiency with an insight to lower revenue.
The advantages of an effective retail supply chain include:
- Increased Productivity
- Better Inventory Management
- Encouraging Organizational Cohesiveness
- Increased Order
- Processing
- Optimized Logistics
- Positive Customer Service
The advantages of an effective retail supply chain include:
- Increased Productivity
- Better Inventory Management
- Encouraging Organizational Cohesiveness
- Increased Order
- Processing
- Optimized Logistics
- Positive Customer Service