Managing supply chain risks: 4 ways to avoid trouble
In a volatile business environment, companies must identify supply chain risks and act proactively to reduce the impact of disruption. Here are four key strategies.
The holidays are just around the corner, but a record-breaking Black Friday, similar to years past, may be little more than a ghost of Christmas past. Times are tough for a lot of consumers these days. Sky-high credit card debts, shrinking personal savings, rising costs due to inflation, and widespread layoffs could slow holiday spending. Experts predict a fiercely competitive season as retail brands battle for every dollar.
Retailers are gearing up for the fight. Forward-thinking brands are deep into their preparations for this most-critical time of the year, aware that a robust supply chain gives them the best chance of meeting consumer demands. A strong supply chain can also improve efficiency and customer satisfaction, two qualities that will likely be non-negotiables for holiday shoppers.An IDC study found that retailers are prioritizing supply chain resilience by taking several steps to reduce supply chain risks, including:
Boosting supply chain visibility is crucial as it allows vendors to monitor products from origin to destination, providing real-time data on inventory levels, order statuses, and goods movement. According to an IDC survey, improving visibility is the top priority for many supply chain leaders.
Increased transparency is key to quickly identifying and mitigating potential disruptions, so that supply chains remain adaptable and responsive. Additionally, it helps track compliance with regulations and standards, further strengthening the overall resilience of the supply chain.
Another key component to supply chain resilience is diversifying suppliers. Retailers should source multiple suppliers and products for their manufacturing, logistics, and transportation needs to avoid the risks associated with sole sourcing.
In IDC’s study, 34% of supply chain leaders cited supply chain partner constraints as a top challenge.
A broader range of suppliers helps protect companies from supply chain interruptions, like delays and shortages. Here are some ways to diversify:
In a volatile business environment, companies must identify supply chain risks and act proactively to reduce the impact of disruption. Here are four key strategies.
With AI’s steadily growing capabilities, it makes sense for retailers to harness its powers to automate processes and improve supply chain resiliency.
For example, AI can crunch the data to predict future buying trends to align stock and spot inefficiencies. AI systems also can improve demand forecasting by examining sales and market data to produce accurate demand predictions.
The 2024 US holiday season is shaping up to be one of the most pivotal in recent memory for retailers. With fewer shopping days, new consumer habits, and a mixed economic outlook, the stakes have never been higher.
For a lot of retailers, building supply chain resilience is easier said than done. Technology integration challenges, data utilization issues, and cost issues often hinder efforts to bolster supply chains. Strategic partners and smart investments in the right technology are key to navigating and overcoming these obstacles to building a more robust, adaptable supply chain.
Swiss retailer COOP worked with SAP to transform its supply chain capabilities. SAP Predictive Replenishment now optimizes COOP’s order proposals and makes sure inventory levels are keeping up with demand. SAP Order and Delivery Scheduling determines COOP’s optimal order cycles and implements them automatically.
COOP’s investment in digital transformation is already helping to reduce costs, boost operational efficiency, and elevate customer satisfaction for their distribution centers.
Another company, Mexican retail giant El Puerto de Liverpool, unified customer, inventory and shopping data to deliver omnichannel services to customers and inventory verification to store associates.
“It is clear that having a robust and resilient supply chain is not just a competitive advantage, but a necessity,” says Geraldo Munoz Martin, the company’s chief technology and information officer.