Increasing complexities and unpredictability in global supply chains have necessitated that organisations not just focus on making their supply chains more resilient and flexible but also show innovativeness with the efforts. In this blog, retail and eCommerce consulting firm YRC highlights five innovative approaches to achieve the stated objective with an emphasis on supply chain management in retail industry.
Use of Advanced Technologies
Today, Artificial Intelligence (AI) and Machine Learning (ML) are being increasingly used for both a wide range of reasons. One of them is to extract complex insights that can be used to increase resilience and flexibility of supply chains. With the ability to process exhaustive data and learn to improvise, AI and ML can significantly boost the outcomes of analytics. This affects the ability of organisations in reading or predicting potential disruptions in supply chains. Self-learning allows AI and ML-powered analytics solutions to come up with suitable solutions towards risk mitigation and optimising operations. Combined with other tools and technologies like retail SCM software, AI and ML also improve real-time monitoring of supply chain activities.
Internet of Things (IoT) appears next. Devices in an IoT network are equipped with advanced sensors and data collected from these sensors can then be used to monitor and control several operational aspects remotely. For example, IoT makes it possible to keep track of storage conditions in remote warehouses from another location. Combined with AI and ML capabilities, IoT devices can also self-regulate to stay within the operational standards. What these activities accomplish is not new but now these are automated with lesser human intervention and more accurate outcomes.
Furthermore, there is blockchain technology which helps bring more transparency, authenticity, and accountability to supply chain operations making them more resilient.
Revamped Risk Management
Diversification is one of the best proven tactics to minimise risk exposure in any field and it applies to supply chains as well. The essence of diversification has not changed but how it is achieved in contemporary times has. For example, having multiple sources of procurement is a common strategy but real-time bidding and flexible contracts make it more suitable in the backdrop of today’s supply chain dynamics.
Today, strategies like nearshoring and reshoring are regaining emphasis. Nearshoring refers to bringing supply chains in greater proximity to home geography. Reshoring is having it all back at home. Both nearshoring and reshoring points are aimed at achieving objectives like reducing lead times, improving control, better communication, reducing geographical challenges, reducing logistics costs, shrinking the supply chain network for risk mitigation, etc.
Agile manufacturing is another known concept that has emerged back from the shadows. Achieving cost reduction, meeting demand fluctuations, and accommodating omnichannel has brought the limelight back to agile manufacturing solutions.
A more proactive approach to supply chain risk management is identifying risks and staying prepared with contingency plans and strategies. Again, the use of AI and ML-powered analytics and real-time monitoring solutions provide a significant edge in risk identification and coming up with robust solutions – something which human intervention might not achieve as optimally as these technologies.
Collaboration with Suppliers
Collaborative and close working relationships with suppliers play an important role in making supply chains more robust and agile. This could be both on and off the papers but it is important to have expectations established. There is tremendous scope of flexibility available on the part of suppliers if they are on the same page. Suppliers may have no apparent reason to adjust their policies and processes to suit the precise business requirements of each client. However, this could be changed on mutually beneficial terms as well as understanding. The underlying essence is that a company-supplier relationship is that of growth partners in respective ways. For example, with technological collaborations, suppliers can allow greater transparency and visibility into supply chains. The insights, reporting, and monitoring are useful for improved demand forecasting and inventory management. Suppliers can use the same technological capabilities to meet their own business needs like achieving cost-efficient supply chain management.
A more direct form of working in close proximity with suppliers is outsourcing. The basic tenet of outsourcing is letting the experts do their jobs in ways that are mutually beneficial to both parties. As a bonus, outsourcing service providers are often in positions to offer scalability thereby enhancing the agility of supply chains. A simple example of this is 3PL service providers. They already align their offerings to suit segments with unique requirements which makes the day for organisations that fall in such segments.
Improving Supply Chain Design
Supply chain design refers to the set of strategies, policies, and planning governing the flow and functioning of inventory, information, and other resources and capabilities over supply chain networks. The quality of this design leaves a direct impact on supply chain resilience in retail and eCommerce. Supply chain designs must be kept simple and sorted. It helps in better management and bringing improvisations. One way to achieve this is by breaking down supply chains into manageable units. Periodical evaluation of the retail inventory control strategies is also highly recommended.
The use of the right technological solutions also plays a pivotal role in supply chain design improvement. All the planning and decisions must find realisation with the desired impact. Technology helps here with real-time monitoring and information-sharing and enabling fast communication.
Sustainability and Ethical Sourcing
At the outset, organisations have the responsibility of maintaining high standards of sustainability practices. Looking for motivation from the external environment does not present organisations in a good light or as responsible entities. However, there is growing pressure on companies or organisations to follow practices that promote sustainability and ethical sourcing. This pressure is coming from all quarters including governments, customers, climate activists, NGOs, media, social media influencers, and even value chain partners. The solution here is to proactively adopt relevant sustainability measures, including ethical sourcing, and promote it as well for competitive leverage./p>
About Your Retail Coach:
YRC is a retail and eCommerce consulting house with expertise in startups, management, transformation, and expansion. With a scaling international footprint and over 10 years of demonstrated experience, YRC has worked with over 500 clients in 25+ sectors with a success rate of 95%.
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Author Bio
Nikhil Agarwal
Chief Growth Officer
Nikhil is a calm and composed individual who has a master’s degree in international business and finance from the United Kingdom. Nikhil Agarwal has worked with 300+ retail e-commerce brands and companies from various sectors, since 2012, to define their growth strategy and achieve operational excellence. Nikhil & his team have remarkable success stories of helping brands achieve 10X growth.
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