An article published in the New York Times last year summed up the frustrations of consumers and retailers: “The World Is Still Short of Everything. Get Used to It.” The title says it all. From high-tech computer chips to cement and building materials, no industry has been untouched by the ripple effects of the pandemic’s disruptions.
Experts now believe that these supply chain issues will persist until 2023. Retailers have no choice but to adapt or die. To help your store through these challenging times, here are some supply chain solutions to become shock proof in 2022.
Analyze and Evaluate
Before the pandemic, supply chains were either taken for granted or built for efficiency not resiliency.
Retailers need to perform a thorough audit of their supply chain. This can involve brainstorming scenarios and simulations to identify when and where excesses and shortages are likely to occur. This can provide actionable insights that will optimize operational metrics.
According to McKinsey, a sustained effort to improve supply chain from end to end can increase sales by 3 to 7 per cent, improve margins by 1.5 to 2.5 per cent, and boost working capital and cash flow by 15 per cent.
If your business doesn’t have qualified supply chain experts in house, then it would be wise to outsource.
To accommodate the unpredictable times of deliveries, staff must understand the big picture of the supply chain. By taking the time to train and educate your staff instead of treating them like cogs in a machine, they will be able to react with agility instead of waiting for direction from managers. In the pandemic, an efficient, agile team is a must have.
If you’re usually keeping two-months worth of inventory, it would be wise to expand that up to five-months worth, says industry expert Joe Stefani. Aggressively doubling down on inventory where possible will go a long way to help outlast stretches when stock is nowhere to be found.
If stock is simply unavailable, this is an opportunity for brands to push or launch alternative options that come close to matching the same consumer needs.
Switch up Supplier Relationships
This is also a great time for retailers to re-examine their suppliers and from where their products are sourced. Finding local suppliers is an ideal way to simplify the supply chain.
Retailers can also develop their relationships with suppliers by communicating their needs and shared goals, particularly with regards to demand planning and forecasting to optimize inventory.
Strengthening the alliance between retailers and suppliers will help improve value, measure performance, and enable better conflict resolution.
Along with supply chain solutions, Storesupport can help with retail audits, inventory management, merchandising maintenance, stock replacement, product change-outs, and outsourced store management. For more information call1-877-421-5081 or visit www.storesupport.ca.« Back to Blog