top of page

The Challenge of Supply Chain Optimization in a Post-COVID World

Intelligent and efficient supply chain management is a key success factor for retailers. Today’s consumers demand unprecedented product variety, availability, and access, making retail supply chains more complex than ever. Retailers that are able to evolve legacy supply chain management processes and implement new technologies will enjoy enormous advantages over those that don’t proactively invest in supply chain optimization.

Consumer demands for product variety are clearly evidenced by the enormous SKU proliferation that has occurred over the last two decades. There are now nearly 40,000 new product launches per year in grocery stores alone, twice the pace of twenty years ago. Retailers must adapt their product offering to individual consumer's budgets, tastes, and values, which makes it difficult to manage inventory and maintain profitability. Beyond the variety in product offering, today’s consumers also expect retailers to meet them wherever they want to shop, in brick and mortar outlets or online.

To deliver a truly frictionless omnichannel experience, retailers must identify and take action to seize opportunities for both organizational and technological improvement. Legacy supply chain organizations are burdened by cross-functional silos and segregated business processes. This causes waste, poor data hygiene, and a variety of inefficiencies. For example, supply chain professionals spend more than 50% of their time working in Excel, even when they have access to advanced planning systems. Software-assisted planning is regularly manually overwritten by planners, and data is siloed and disconnected from business objectives. This leads to inaccurate forecasting, poor inventory management, and lost sales.

To stay competitive, retailers will have to create a single view of the customer and integrate it into their supply chain. They must learn to use advanced analytics and machine learning to accurately forecast demand and make inventory optimization a continuous business discipline. Technology alone is not enough: Retailers must break down silos and create cross-functional teams that work together to achieve business objectives. By embracing these challenges, retailers will be able to meet customer demands for omnichannel convenience and variety while delivering strong business results.

32 views0 comments

Recent Posts

See All

Planners play a critical role in creating competitive advantages for retailers, contributing directly to margin enhancement and customer satisfaction. Unfortunately, they routinely spend most of thei

How Supply Chain Genius Creates Value for Consulting Organizations Executive Summary Effective supply chain management is a critical growth enabler for retailers, and consulting companies play an impo

bottom of page