Key Supply Chain Challenges all Retailers Need to be Aware of Today

Written by Raghav Sibal, Managing Director, ANZ, Manhattan Associates

The retail landscape is significantly challenged today. With supply chain issues impacting stock levels, increasing volumes of returns and increased customer expectations in relation to online deliveries, local brands will have a hard time satisfying customers in 2022. As a result, retailers will find that they quickly need to adopt new systems and approaches to enhance their supply chains and meet consumer demand for a seamless and more personalised shopping experience.

So, what supply chain challenges should retailers be aware of, and how can they overcome these?

Returns management will increasingly impact consumers’ perception of retail brands

While eCommerce has served as a lifeline for retailers over the past year, the ever-increasing volume of returns poses significant challenges, including impacting consumer perceptions of a retail brand. The returns process can regularly make or break the overall brand experience, and savvy retailers are increasingly viewing the return process as an opportunity to further engage with customers, providing, as it does, an additional touchpoint to enhance the overall customer experience.    

Retailers today need to have greater visibility and more intelligence around their inventory, regardless of where it is currently residing in their network. Smarter front-end omnichannel systems capable of efficiently dealing with customer enquiries and greater insight into data around transportation processes will be the key areas for brands looking to solve the challenges presented by the growing returns trend.

The war for talent will put pressure on supply chain operations

Given the extent to which a positive or negative customer service interaction can have on a shopper’s perception of a retail brand, the war for talent and the need to retain high performing staff will create additional business pressures. In such an environment, organisations need to focus on selling themselves as an employer of choice and create and promote initiatives that set their business apart in a competitive hiring field.

Given the need to retain IP in a challenging hiring market, more employers are focusing on career planning and succession internally to ensure adequate support and training for workers to move up the ladder. Many supply chain and retail organisations also offer financial support for further tertiary education studies or provide retention bonuses to ensure continuity.

New approaches can help solve fulfilment challenges

As eCommerce and ‘store to door’ delivery continues to grow, many retailers are struggling to turn a profit from online sales. The challenges of the last two years didn’t just fast-track eCommerce uptake. They also accelerated advances in technology, pushed businesses to revaluate traditional models, and forced many to rethink relationships between retailers, disruptive start-ups and automation, setting the scene for a radical shake-up of fulfilment strategies over the coming year.

One of these fulfilment strategies and one of the most cost-effective trends retailers and supply chains are adopting is micro-fulfilment. Micro-fulfilment involves moving out of large singular DCs to smaller and more local and convenient hubs. By expediting the fulfilment process, micro-fulfilment gives brands the opportunity to get goods to their customers quicker whilst also providing a convenient collection point for consumers. With the adoption of this kind of smart fulfilment method, retailers can get their goods to consumers faster, cheaper and more efficiently.

Manage stock visibility issues through advanced technology

With supply chain issues leading to stock level challenges for many retailers, the last thing any business wants is to run out of stock – or worse, to later find out that the stock they needed was in the warehouse the whole time.

To mitigate this, operational visibility and forward planning remain fundamental to retail and supply chain continuity and efficiency. To gain these insights, solutions like a Warehouse Management System (WMS), which integrate all sales and distribution channels into one place are required. With innovations like a WMS, retailers have absolute transparency around their goods. They can review the rules of stock allocation, temporarily giving priority to in-store stock over warehouse stock, thus, freeing up any trapped inventory confined within closed stores.