Retail Supply Chain Practices

The retail supply chain must change the way in which they support the business to improve flexibility and most importantly support the changes in the ways that consumers interact with retailers through omni channel shopping and purchasing.  Just as the retail business must change to support frictionless shopping and purchasing across all channels to meet the changing demands of consumers, the retail supply chain must change in order to support the inventory replenishment and delivery across cycles.  The impact of these demands on the retail supply chain require a flexibility in communication, capabilities and expanded collaboration across the extended supply chain.  The key to meeting the demands is developing robust flexibility into the supply chain framework to react and support changes.

The good news is that the supply chain has been forced to react to pressures and changes to the practices over the years from a combination of changing manufacturing demands, natural disaster and cost pressures so the supply chain is in a position to provide leadership and direction to retailers.  The supply chain industry has spent years reacting to continuous disruption and these disruptions and practices to sense and respond to changing demands can provide the necessary framework for the large legacy retailers to support the frictionless omni channel retail requirements.  

Retailers must first change their supply chain practices to conform with a new omni channel market framework that supports a single inventory position across channels that provides a basis to support fluid movement of inventory across channels.  These practices require a change for many retailers in their operational practices as well.  To be more specific as an example, the retailers must extend their supply chain practices across all channels to support pick, pack and ship operations to customers, between stores and between warehouse in any direction.  This brings an increased demand across the entire supply chain for labor, transportation, inventory control and accuracy including expansion to inventory and sales forecasting and planning.  

These changes are focused mainly on the when and less on the actual functionality and expands the retail supply practices directly to the retail store shelf.  The supply chain function does not change, in other words product will be picked and packed, however these functions will be performed at the store as well as in a specialized distribution center.  The results of these expansions in supply chain practices are an increased focus on inventory management along with an expansion of labor in the and capabilities across the omni channel marketplace.

These changes in retail supply chain practices will bring increased cost management pressures to address the labor expansion in the retail stores.  Much of the expansion can be supported by repurposing labor and changing job roles and responsibilities.  These will require analysis and measurements through labor standards management which is again an expansion of supply chain practices across the omni channel outlets.  The challenge to the retail supply chain is to revise the view and activities in retail store outlets to align standard supply chain practices to all retail channel outlets.  

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?