The role of supply chain management in retail scenario of today

October 17, 2019
Written by:
Supply chain management

The 15th Annual Global Shopper Study by Zebra Technologies highlights trends directly impacting shoppers’ buying decisions. In the last 15 years, 75% of online shoppers preferred items delivered, and 64% favored retailers that offer alternatives for picking up items in stores and locations. Moreover, about 80% of consumers like retailers that provide easy and hassle-free returns. Interestingly, about 62% of online shoppers registered satisfaction with returns and exchanges by mail.

With such heightened delivery expectations, are you equipped to deal with these challenges?
To adapt to changing shopping trends, role of retailer in supply chain are making strategic shifts. They’re re-configuring retail spaces, with 49% focusing on order pickups and 45% converting POS areas to self-checkout. AI plays a central role in demand planning and assortment optimization, with 40% of retailers utilizing it. Additionally, 80% emphasize advanced order management and fulfillment as pivotal future technologies, highlighting the significance of distributed order management and demand planning.

Here, an eCommerce SaaS-based warehouse management system can help retailers get real-time visibility, scalability, and market reactivity.

In this article, you will learn how to keep up with the omnichannel demands. Before that, let us tell you what is Retail Supply Chain Management.

What is Retail Supply Chain Management?

All the processes you utilize to ensure your products reach the customers, from obtaining the raw materials managing inbound materials & production processes to last-mile delivery of those products at your customer’s doorstep, are known as retail supply chains. When you optimize all these processes to increase both speed and efficiency, it becomes supply chain management in retailing.

All that needs to be done is to optimize the processes so that you can deliver the products in your customer’s hands as fast as you can, but at the same time, you don’t want to pay an exorbitant amount to do that.
Hence, retail supply chain management calls for your processes to be both efficient and affordable. Now that you know what supply chain management in retail management in retailing is, let us tell you its importance.

Role of Supply Chain Management in Retail

The differentiating factor of retail supply chain management from other supply chain management is the volume of product movement and the fast-moving nature of the products of the retail industry.
The supply chain in retail sector must be monitored very closely and be free of glitches as the products are always on the move, and the cycle time is very low.
Zebra’s Study states, “38% of online shoppers were unsatisfied with the returns/exchange process.”
Logistics can be very challenging at times, and when you are new at retail, they may appear to be overwhelming.
If you are encountering problems like delayed fulfillment times, high fulfillment costs, and the inability to offer competitive shipping options and prices, then it’s high time to streamline your supply chain. Here, an efficient warehouse management system can induce a big difference.

Want to know how? Follow these five steps

1. Optimizing Storage Space
If you investigate how you use your storage space, you may be paying for too much space. You might even be wasting money paying your staff to search for stored items.
Another possibility is that as your warehouses are not efficiently designed for item storage, the time taken to do inbound and outbound processes is greater and difficult to manage.
An effective storage strategy can help you reduce your storage space and personnel costs. Automation and process consulting can help improve productivity and profitability. The less human touch in the inbound and outbound processes, the better in reducing errors and eliminating bottlenecks.
Automated warehouses enable easy data collection across the supply chain which also helps take better decisions via real-time collaboration between departments. Layouts that are efficient also help in a smoother transition to complicated and advanced operations, such as cross-docking, bulk-breaking, etc., reducing overhead charges and manual errors.

2. Use of Multiple Suppliers
Putting all your eggs in one basket is never a good strategy. If you only use one supplier, you eliminate competition for your orders.
Find several suppliers who can compete on price, and use several of them at all times so you can avoid costly delays in receiving products. Using multiple suppliers protects you from spending money on less-than-satisfactory service.
Dealing with multiple suppliers simultaneously creates a bargaining power which isn’t only limited to monetary benefit but also in terms of product quality and delivery time. Suppliers compete to become the preferred choice, so they supply better quality products at a competitive rate if there are economies of scale to achieve. This, in turn, reduces your return costs, ensuring higher revenue and higher profits.

3. Faster Movement of Supplies
If you can find ways to expedite shipments from suppliers, you can order closer to the time you need the supplies. Ordering far in advance can incur warehouse costs because you have to store them so that they’ll be available, and products are more likely to get lost or damaged.
In addition, examine whether you can shorten the time it takes you to transport supplies from where you receive them to where you need them.
The easiest way to achieve this is by using an optimization program to create efficient pickup & inbound routes. This can be done by a simplex function on your spreadsheet or can be achieved by specialized software in case your business scale in larger. Optimizing this process reduces the cost of after-order replenishments, hence reducing overhead costs and eventually boosting your bottom-line.

4. Evaluating Customer Demand Patterns
Evaluate customer-demand patterns frequently to see if you’re seasonal and even monthly assumptions hold up.
Adjust your supply ordering based on your most recent evaluation, and you will be ordering in a way that’s more closely tied to what you really need to have on hand. Based on how you want to manage your inventory, you can choose to either lag the demand (keep somewhat less inventory than your demand in the warehouse) or lead it (keep more than the demand).
The most efficient way to manage demand patterns is to access clean and clear data across your entire supply chain in retail sector and have real-time visibility of the inventory at different locations. Once you have the historical data, you only need to analyze what’s going on to conclude the inventory levels you need. You can choose to keep a safety stock with you, which acts as a buffer for a proverbial rainy day, and on top of that, any strategy amongst LIFO (Last In First Out), FIFO (First in First Out) etc., depending on the category of products you are dealing with.

Seasonality of demand is another variable that you need to consider. In case you are dealing with products where sales are highly seasonal, you have to be prepared for a particular season well in advance. However, during the other seasons, you can choose to reduce manpower or inventory levels to ensure you don’t overshoot your yearly budgets and don’t end up with large amounts of unsold inventory. So, plan your employee numbers and stocks efficiently to manage this.

5. Optimizing Ordering Process
Part of your supply chain costs come from your ordering system. You could be over-ordering if you have multiple people filling out requisitions, using multiple software or even paper checklists.
In addition, if there’s no approval process and individuals can order supplies whenever they want, you could be ordering things you don’t need. Examine your ordering process to see if it is causing waste.

Automating orders with the help of a warehouse management system or warehouse control system is the best choice for this scenario. You can create your own algorithms to calculate inventory and place delivery or replenishment orders as quickly as possible when it goes below a certain level, which will reduce turnaround time and manual errors. You can use a spreadsheet too; however, ensure that you have real-time updates from multiple sources so you don’t miss out on any.
You can also use Advanced Shipping Notice (ASN) for regular delivery schedules. These ensure that you don’t have to keep more inventory with you, and you can seek regular delivery from your suppliers. Establishing an optimized cycle will make it easier for the suppliers to plan production and shipping.

In Summary
You can operate more efficiently when you streamline your supply chain management in retail management process using ecommerce SaaS platforms or warehouse management systems. You’ll speed up order processing and save yourself money.
You can perform processes like splitting orders for optimized fulfillment, managing multiple suppliers or fulfillment locations, managing Drop shipping, and much more.
All it takes is assessing your present procedures and figuring out where to make enhancements. We can help you do that. Make a business inquiry to know how we help brands like you optimize the supply chain process.


Want to grow your business?

Your staircase to
growth is here!

Quick tricks for growth:

  • Reconciliation of overcharges
  • Single inventory dashboard
  • Reduced order processing time
  • Standard and accurate data

Want to know how to do this? Don’t worry!



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5 years ago

Nice article on optimizing retail supply chain.

5 years ago

Thanks for the article! What modern customers want is faster and more transparent delivery. It’s great to have an app for tracking every step of the process.