Technology is the key to creating a fully agile and future-proof supply chain
From the impact of ongoing bottlenecks caused by Covid-19 and the raft of changes to EU/UK trading regulations as a result of Brexit, to the energy crisis and inflation, never before have retailers faced such a huge level of disruption to their supply chains as they have during the last two years. These challenges have affected all corners of the retail industry, from initial stages and materials sourcing to partnerships and final mile delivery.
The challenges of the last few years have also put a spotlight on retailers’ reliance on single suppliers and single country supply routes for many organisations, which has forced many retail sector companies to rethink their networks and consider supplier diversification to ensure continuity in their supply chain. Alongside this, it’s also vital that businesses innovate their supply chain processes and look for ways to utilise data technologies to gather invaluable insights, which they can use to prepare for a more sustainable future.
The 2021 data strongly suggests that… the worst effects of the pandemic are over for the retail market at large.
Innovation provides invaluable insight
Retailers must innovate, seeking advanced technologies to transform their supply chain from purely that of an operations hub, into the epicentre of business. Technologies including AI, machine learning and cloud offer retailers the insight they need to build resiliency into their supply chains – one that bakes in business continuity and streamlines operations, to prepare them for the challenges of the future.
Anticipating shifting demands and trends with precision is one of the best ways to succeed in a challenging, fast-moving retail landscape. That said, in the new world of hybrid work and e-commerce, retailers must almost move away from everything they used to know about historic patterns of consumer behaviour and towards an informed, investigative model, where data drives decisions and promotes agility.
Advanced analytics and real-time data led insights can ensure that a retail business is making informed decisions at any moment. There are hidden insights buried in supply chain operations that have enormous power to drive new standards in efficiency and sustainability, as well as aid with scenario planning. Visibility is crucial, and the only way to achieve true agility, by enabling businesses to spot problems before they occur, coupled with end-to-end transparency.
The real-time insights and operational overviews that cloud-based systems can offer can be transformational to the running of a retail business. Rather than continuing to simply react to change, businesses can proactively arm themselves with the tools to unify data and receive predictive insights from AI and IoT across their operations. From planning and procurement, order fulfilment, production and stock to warehousing and transportation, operational efficiency, product quality and profitability can be boosted with the use of the right technology.
Driving up environmental standards
Alongside the ongoing impact of the pandemic, there is an additional challenge facing retailers that they cannot afford to ignore. Climate change and the pressing need for supply chains to become more sustainable is an important factor that all retail businesses must address. Consumers are increasingly demanding climate-conscious goods and are engaged far more than ever before with the subject of where their purchases originate from. Alongside the post-Brexit transition period during which trade is less frictionless than it once was with Europe, many organisations are looking at ways to simplify and even shrink their supply chains in an effort to move towards a more adaptable business model.
Retailers are more aware than ever of how important sustainability is to their customer, but despite this, only 40 per cent of UK retailers are yet to apply environmental standards in their supply chain. Gaining a greater understanding of a business’ in-motion operations can allow retailers to spot opportunities to make improvements. For example, they could look at how to introduce recycling, repair or refurbishment into their supply chain and low carbon transport and logistics options, as well as collaborating with other suppliers and retailers to promote greener attitudes towards purchasing and waste among their consumers.
Furthermore, retailers can also utilise technologies to digitise their value chain and build a connected data strategy for monitoring their emissions, waste and energy usage throughout their operations. This is particularly poignant as energy prices increase and pressure is added to profit margins, meaning any steps taken now to reduce emissions and boost sustainability will likely be considered a wise business decision.
Reacting quickly to any scenario
There were many examples during the pandemic of certain goods surging in popularity, for example bicycles and desk chairs as the workforce began working remotely and travelling in confined spaces came became high-risk. Those businesses that were able to react to these consumer trends quickly, saw their profits jump as a result.
Supply chain management tools such as Microsoft Dynamics 365 arms organisations with the insights they need to make rapid, intelligent and data-backed decisions in a challenging market. Whether retailers need to shift their stock around, make changes to where it’s held and scale up with any growth patterns they experience, delivering stock to the right place at the right time to keep up with customer demand is still the number one goal. Becoming a truly agile and streamlined business is only possible by making use of the advanced analytics and real-time data-led insights that technology can provide.
It is vital that businesses innovate their supply chain processes and look for ways to utilise technology to gather invaluable insights.
To find out more about Microsoft UK and the services they provide to the retail industry, click here.
This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.