Optimizing Retail Operations Through a Data-Driven Supply Chain
Today’s business environment is rapidly evolving and so are the complexities of the retail supply chain. With so many moving parts that includes suppliers, inventory and logistics, retailers must identify and understand the common pain points and find practical ways to address them. This is best done by taking a data-driven approach to build a faster, smarter and more resilient supply chain operation that can weather the ups and downs of it.
Advantages of Data-Driven Decision-Making
Fostering a data-driven approach creates a culture of informed collaboration, accountability, and continuous improvement. With it, retailers are better equipped to anticipate challenges, align strategies across teams, and adapt to rapidly changing market conditions.
There are four key elements of a retail data-driven supply chain, each playing a crucial role in transforming raw data from internal systems into actionable insights.
1. Let the Data Lead
Pivotal decisions demand clarity and precision, and big data is fundamentally changing how businesses operate today. Traditionally, supply chain leaders relied on historical purchasing patterns to determine how much stock to hold, assuming that past trends will repeat. However, artificial intelligence and machine learning analyze immense data sets and uncover multidimensional connections that would otherwise remain hidden.
From inventory control to supplier issues and inaccurate demand forecasting, retailers must lean into the numbers. Data-driven companies are three times more likely to report improvements in decision-making compared to other companies that don’t use data. Relying on hard numbers helps retailers make decisions in alignment with real-world conditions since demand, logistics and inventory levels constantly change.
2. Using Composable Technology
A hallmark of data-driven organizations involves these cutting-edge systems, such as AI, ML and predictive analytics to interpret vast amounts of data. Traditional software are typically large and monolithic in size, requiring a commitment to the platform.
A composable supply chain uses modular, scalable and customized solutions that can be updated or replaced without disrupting operations. Think of composable software as pieces that snap together like plastic building bricks. Each “piece” of the system is designed as an individual unit that can be integrated with or swapped out for other solutions without breaking the entire supply chain.
A composable framework enables retailers to plug in targeted capabilities like AI-assisted inventory optimization or simulation modeling to fill the gaps. This approach means continually evolving decision-making without overhauling the tech stack.
The shared access of a composable platform also fosters collaboration where teams align their efforts around consistent insights to make decisions that benefit the entire enterprise.
3. Cross-Team Integration
Integration across teams provides free sharing of data across different departments within an organization. Decisions are then made on a unified understanding of data, ensuring alignment in goals and strategies.
When all teams have visibility into the same data sets, there's less room for miscommunication or competing priorities and it strengthens a company’s ability to adapt in the face of rapid change. In the long term, cross-team integration builds trust, accountability and efficiency. It ensures that every decision is informed by the best available data and aligns with the company's collective goals.
4. A Focus on Metrics and KPIs
A vital part of maintaining clarity and accountability, key performance indicators (KPIs) identify and set measurable benchmarks to guide decision-making and evaluate success. KPIs allow supply chain leaders to quickly identify areas of success, address weaknesses, and make informed decisions to drive improvement.
In the long run, embracing a data-first mindset not only improves operational performance with unbiased insights, it will help retailers make smarter decisions, reduce costs, and ultimately deliver superior customer service.
Jeff Metersky is senior vice president of strategy and innovation at GAINSystems, a supply chain performance optimization platform.
As the senior vice president of strategy and innovation at GAINS, Jeff Metersky leverages his extensive industry, software and consulting background to enhance the strategy, positioning, and vision of GAINS' solutions, which enable data-driven decision making and continuous improvement for supply chain operations.
