How Retailers Can Better Manage Supply Chains in 2017
Consumer behavior and expectations have changed. The new buying experience with online shopping is putting retailers and their suppliers under pressure to deliver more goods, to more locations, faster. To compete in today's hypercompetitive landscape, retailers should reimagine the supply chain as a digital supply network that combines services, talent and information. B-to-B cloud technologies can redefine traditional supply chain networks and have a great impact on the way retailers do business.
Looking ahead to 2017 and being mindful of these shifts, retailers must understand what B-to-B cloud technologies can do for them, and take advantage of these four essential trends:
1. Network collaboration: Network collaboration consists of retailers and their suppliers working together to achieve mutual improvement. Retailers are seeking to adopt B-to-B cloud integrations more and more to better manage their suppliers, improve product availability to consumers, streamline replenishment and reduce stock-outs, while at the same time reducing inventory. In a recent study by the University of Tennessee, “Transform Your Supply Chain With Collaboration,” success stories on network collaboration show bottom-line results: “lead times reduced by nearly 60 percent; forecast accuracy improved by over 30 percent; and inventory turnover increased by 9 percent.”
2. System integration: With the increase of network collaboration between retailers and suppliers, the importance of data consolidation and automated processes enhances. Today, more than 51 percent of ERP data comes from external sources. Failing to automatically consolidate this data in an ERP system can have significant consequences affecting delays, unexpected expenses and customer dissatisfaction. B-to-B cloud integrations provide automated processes to improve efficiencies both internally and externally, reduce cost and time to market, and boost ERP performance. B-to-B integration boosts the return on the ERP investment.
3. Drop shipping: Retailers are considering drop shipping as an additional model to cater to the rising demands of online shoppers. This solution offers retailers a wider selection of products as well as flexible delivery locations with less capital and owner overhead to manage inventory. However, drop shipping presents its own challenges, including inventory issues, shipping complexities and delivery errors. Putting B-to-B cloud technologies in place, retailers can address these issues by syncing their inventory with their suppliers, tracking customer orders, shipments and deliveries, and evaluating their suppliers’ performance. The benefits of drop shipping can allow retailers to expand their reach, expedite their delivery and maintain customer loyalty.
4. End-to-end visibility: The goal of end-to-end visibility is to allow easy access and use of large volumes of data so retailers can identify and make informed strategic business decisions. Understanding and sharing data across the organization will help retailers identify new opportunities and implement effective strategies based on insights that will provide a competitive market advantage and increase customer loyalty. B-to-B cloud platforms enable real-time collaboration that makes it possible for retailers to take advantage of big data flowing from their trading partners and turn it into predictive analytics that thereby enhances planning and forecasts trends, improves responsiveness, and increases awareness to change.
Retailers are increasingly taking advantage of B-to-B cloud solutions for specific activities like network collaboration, system integrations, drop shipping and end-to-end visibility to improve supply chain efficiency, reduce operation costs and increase customer satisfaction. B-to-B cloud technologies help retailers realize major benefits from these key trends that are redefining traditional supply chain networks and adapt to the new age of consumer behavior.
Peter Edlund is the senior vice president of global product marketing at DiCentral, a provider of EDI supply chain management software service solutions.