Adapting the Supply Chain for High-Demand Products
Today’s retailers are faced with major challenges. They need to offer the most advanced and savvy products, get those products into the hands of customers as quickly and as cost effectively as possible, and meet demand and keep shelves stocked.
Due to technological advancements, high consumer expectations and the lightning-quick pace of the retail industry, the supply chain aspect of the business is even more challenging. The following tips can help retailers that are faced with increases in order volume adapt their supply chain systems to meet demand and consumers’ ever-changing expectations:
1. Make room for the warehouse of the future. The warehouse of the future has the flexibility to shift gears with changing conditions, but forecasting for new technologies and the rapidly expanding Internet of Things is a difficult puzzle to solve. Though increases in high-demand products can be a good problem to have, not all logistics providers are structured operationally to accommodate demand. Retailers faced with this need should work with their third-party logistics provider or ensure their own supply chains are linked geographically to allow for significant improvements in speed to market, in addition to developing custom engineering for packaging, optimizing the shipping process to decrease costs, and using automated solutions to improve quality and reduce costs. Retailers could also consider expanding their fulfillment centers’ production cells or modifying shift schedules and scaling up associates to efficiently get the product directly to stores and individual users.
2. Address modern day consumers’ needs. Consumers are shopping online more than ever, and they expect competitive pricing, in-stock merchandise and fast delivery — all at the same time. Therefore, today’s brick-and-mortar and online retailers are faced with the challenging task of meeting the fast-paced, ever-changing needs of consumers. This is challenging from a supply chain perspective, but the brands that fail to meet consumers’ expectations are at risk of losing loyal customers.
Since retailers must manage hundreds of thousands of locations and carry thousands of items at each location, conditions like out-of-stock, outdated product and inventory shrinkage are common. As a result, it’s becoming more common for retailers to rely on supply chain partners to become the system of record for inventory. For instance, retailers will send their data to a third-party logistics provider or link their point-of-sale (POS) system with a provider to offer an up-to-date, holistic view of what’s immediately available on store shelves. This helps to satisfy consumers’ desire for immediate access to information, but it also requires retailers to be able to deliver an intuitive experience in-store and online.
Apparel retailers are doing a good job of successfully building a new retail model to address consumers’ demands. To successfully meet demand, the supply chain has to be flexible and agile.
3. Embrace the Internet of Things. The Internet of Things (IoT) is escalating at a furious pace and soon there will be more than 26 billion devices connected to the internet. This means retailers and manufacturers will face even greater complexities.
At the same time, the IoT impacts the supply chain’s organizational structure. For instance, supply chain tasks such as planning, procurement, supplier management and logistics are better addressed by data-driven, intelligent systems. Retailers should take advantage of IoT technologies amid the global supply chain to improve customer service, revenue growth, profitability, sustainability, security and risk mitigation, among other things.
Technological innovations and a hyperconnected world have significantly influenced consumer behaviors and expectations. As a result, retailers’ supply chains must adapt to handle demand, or you run the risk of becoming obsolete.
Bashar Nejdawi is the president of Ingram Micro Mobility in North America.
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