Retail supply chains have grown more and more complex, and companies must have end-to-end supply chain visibility to prepare for unexpected changes in demand. As such, retailers should explore practical, relevant ways to predict demand, while continuing to deliver quality, omni-channel consumer experiences.
In this post, we’ll discuss some steps an organization can take to maximize the efficiency of their retail supply chain.
Visibility starts with data
Today’s retailers generate enormous amounts of customer, sales and product data. Advanced supply chains rely on the complete visibility of this data to ensure that everyone along the supply chain is in sync. Order placements, needed inventory, delivery schedules and more require the upmost coordination.
To support the Herculean task of curating this data, companies need a centralized, cloud-based data center. Cloud storage solutions allow everyone along the supply chain to access data from any location, while also backing up all data, which eliminates downtime risks from computer crashes and on-site data losses.
Management systems can help advance inventory management
Inventory management remains a significant obstacle for many retailers. In fact, the 2018 Retail Supply Chain Report found that 63% of respondents consider inventory optimization their second-biggest challenge, just after demand forecasting.
The average retail supply chain has more than 1,300 suppliers and over 90 logistics partners, and to better manage inventory, retailers are employing a variety of management systems.
Nearly 57% of respondents have invested in logistics systems, while 50% plan to invest in warehouse management systems. Many of these solutions integrate legacy systems, as well as advanced analytics, artificial intelligence and forecasting tools.
Demand forecasting for ever-optimal store assortment plans
Now, more than ever, customers expect the right products, when they want them. Therefore, assortment plans can’t remain static—they must adapt to changing trends. Consider a particular accessory that unexpectedly becomes trendy and sells out, or a certain sized shirt that sells out more quickly than the other sizes.
Demand forecasting tools address these issues by using real-time information to properly update assortment plans. As such, retailers will only receive the products they need, and they’ll be able to better optimize store assortments and merchandising to meet their customers’ shopping preferences.
As a result, retailers will see fewer markdowns, and improved margins and revenue.
Data consolidation allows for the advantages of artificial intelligence
Of course, artificial intelligence is one of the hottest supply chain topics today, and this is because AI can take mountains of real-time data, and predict future allocation and merchandising needs.
But AI’s capabilities don’t stop there, and AI-driven solutions can take data from internal and external sources to predict outcomes for various scenarios. This is extremely valuable for supply chains—optimal supplier selection and delivery routes can be determined with AI.
For consumer-facing efforts, AI uses customer data to create sophisticated audience segments and deliver personalized offers to customers.
Finally, AI allows for advanced pricing analytics, which helps retailers understand price baselines and elasticities for their products.
Yes, you can meet your demand
Today’s retail environment is constantly changing, so supply chains must do a better job of delivering products to stores, while also being ready to adapt to shifting customer demands and trends.
Regrettably, many retail supply chains are still playing catch-up, as they’ve yet to implement management systems that centralize data and analysis. Nevertheless, there’s no time like the present to get started.
Are you ready to take the first step in advancing your supply chain?