Supply Chain Execution: What You Can Be Doing Right Now To Improve
If you’ve heard about our most recent Supply Chain benchmark report – or the condensed eBook version of it – you know that our focus was on the outbound side of the supply chain – the ability to get product from a retailer out to the consumer.
But amidst all the challenges that we point out (and there are challenges aplenty), what can retailers do, right now, to get ahead? Our recommendations are as follows:
There are going to be retailers that survive this tumultuous time in our industry, and there are going to be new retailers born within its chaos. New retailers will have an entirely different supply chain structure, but established retailers who survive will have had to significantly alter the flawed supply chains they’ve already been using for years (even decades).
When the dust settles, survivors will have one thing in common: they will have thought differently about what they needed to do to get their execution up to snuff to meet growing consumer expectations. This requires leadership at the highest levels – it is nothing short of a board room issue. We also recognize that turning around something so large and complex can seem daunting; but that wide-scale progress comes as a collection of many small steps.
The first right now is to think differently about what your supply chain can – and should – be. Today’s is just not working. These are not easy conversations, and will vary wildly from one brand to another, but they MUST start to happen.
Trust Your KPIs – Or Invest Until You Can
Winners are much more confident in not only the inventory accuracy and visibility technologies they use (and are planning to use in the near term), but also in the ways in which they measure these tools’ effectiveness. If you cannot rely upon the data your systems currently provide about inventory in the store, at the DC, or in transit – it is time to upgrade until you can. The ability to trust inventory-related information is rapidly approaching table stakes at this point, and retailers who cannot fulfill their end of the deal (having what the customer wants when she wants it) will rapidly fall off the scene.
Don't Fear Amazon: Respect The Consumer
It is far too easy to throw your hands up in the air and take a fatalistic view of the future of retail. “Walmart has squeezed us at the store and now Amazon is squeezing us even harder online” does not benefit a retailer. In fact, that very sentiment has played a role in the demise of many once-relevant retailers simply by throwing them into a state of inaction. Its very introduction into the minds of an organization can have lethal effects.
Instead, recognize something far more important: this isn’t about Amazon, or any other mass merchant, for that matter. It’s what they have been able to offer the consumer that has enabled them to steal some of your sales. What was it those shoppers preferred, and can you compete there? If that answer is “free two-day shipping and we can’t do that” - then find something else that you can offer that Amazon can’t yet. Chances are, after some thoughtful consideration you’ll come up with a list of things, and chances are even greater that those things will involve your employees interacting with consumers. Respecting the person who’s really in power will serve you far better than fearing the scary monster that’s currently wreaking havoc.
Take A Risk
If the full report proves anything, it’s that our industry simply cannot wait any longer to solve supply chain issues. Consumers have consistently told us there are things that matter to them as much – if not more – than price, and the ability to get what they want exactly when they want it is chief among them. If you don’t accurately know what your inventory is, where it is, or how you can get it, you are operating on borrowed time. The good news? All of retail lags other industries here, so it’s not like you’re that far behind your competitors. The bad news? There are a handful of powerful retailers that have recognized supply chain execution as “the next big thing” for several years now, and the work they’ve put in is about to pay dividends.
Success does not come without risk. Now is not the time to ignore the importance of fulfilling customer demand in hopes that what worked in the past will be good enough for the future. It’s not. It’s not even good enough for today. It’s time to take a risk on the next big thing.
If you’ve haven’t read the report, check it out.