The supply chain crisis has plagued retailers in a variety of industries since the COVID-19 pandemic began. By all indications, it shows no signs of stopping and has the potential to get worse. Costs continue to climb while labour remains scarce. Here are six tips to help retail companies manage the rising costs throughout the supply chain.
Identify Logistical Flaws
Most retailers experience inefficiencies when transporting products, but they can’t forget about the rest of the supply chain. It’s critical that managers inspect their retail space’s workflows from start to finish. Orders, packaging, shipments, and deliveries should have no hangups.
If a specific step is lagging behind, managers might need to add extra hands or implement wearable digital tools with built-in artificial intelligence (AI). These devices track activity levels, heart rate, and other indicators of employee productivity. Every minute counts in retail settings, so these tools can make a huge difference in cutting costs.
Cut Back on Packages and Shipments
One of the supply chain’s greatest problems is the rising cost of packaging materials. Plastic, cardboard, and other raw materials are more expensive than ever.
To deal with this growing issue, retailers need to start a formal review process that compares materials’ quoted prices and what the vendor actually charges. This way, managers can change their shipment prices accordingly.
It’s also a good idea to consolidate shipments into larger bundles. Combining shipments from different suppliers headed to the same destination will save everyone time and money. As a bonus, it also makes the supply chain more eco-friendly.
Invest in Advanced Analytics
Retailers can more easily identify a supply chain’s flaws through new analytics tools. Thanks to developments in AI and the internet of things (IoT), these tools can gather advanced data that gives managers new perspectives on their work. They predict future trends or backlogs, identify new risks, and help business partners collaborate to reduce time, effort, and costs.
As all retail veterans know, informed decision-making is the most important aspect of supply chain management. Armed with detailed information about past, present, and future inefficiencies, retailers can make their workspaces more efficient than ever before.
Automate More Steps
Along with digital analytics tools, retail managers can use order management software (OMS) to make each step in the supply chain more accurate and time-efficient. For example, an OMS can automatically send out purchase orders and invoices to clients. The labour for these tasks can get redistributed to other areas that need it.
An OMS also automatically retrieves and consolidates order information from dozens of channels based on the company’s preferences. It provides constant updates about the shipping status, tracking information, and estimated costs of each order.
Reorganise the Inventory
A retail space is only as successful as its inventory organisation. Using the aforementioned analytics tools, managers can easily determine whether their current setup is saving or costing them money. Even the smallest factors can impact the bottom line, from shelf layouts to the locations of popular or unpopular products.
Monitor Changing Customer Demands
Retailers know better than anyone that customer demands can be extremely fickle. They change day by day, month by month, and season by season. By monitoring their shopping habits and ordering patterns, managers can see upcoming market trends and get ahead of the competition. The more information a company has about its customers’ behaviours, the better prepared it will be.
Modernize Your Retail Workspace
Many U.K. stores have gone under in the last two years waiting for the supply chain crisis to blow over. Waiting won’t get us anywhere. Retailers need to use the advanced analytics tools available to them, identify inefficiencies, and make informed decisions to escape the crisis. Using new technology is always intimidating, but it’s a step companies must take to survive.
