WHAT’S BEING “SHOCK-PROOF” WHILE DECIDING ON SUPPLY CHAINS?

The catastrophic pandemic has discombobulated whole retail supply chains across verticals. A lot of fluctuations in demand-supply ratios have made inventory levels to fell significantly during the early phase of the pandemic.

The sprint between manufacturer-customer of the retailer has increased but the soared have been intact. From miles to miles, the congestion has been a daily bang on freight rates with an increase in service disruptions as a topping. Availability of the product while managing volatility across different fronts due to disruptions has made retail supply chain leaders get up and take appropriate measures. Conventional approaches are to be re-thought to make the inventory secure in the last month of the fourth quarter (2021).

The chaotic situation is not yet over but warehousing came as a factor for relief to the scene. It is anticipated that annual warehousing cash to-and-fro will grow by 76.2 million sqft by march 2026 (from 31.7 million sqft in 2021) and warm-hearted thanks will be given on Thanksgiving Day to the consumer demand (that has increased obviously)1.

As the lockdowns are on the ease (somehow) and consumers are/will start(ing) shifting on brick-and-mortars once again but how long will this shift remain is dependent on time. The dependency is JUST, YES, OFCOURSE, ONLY because of surprising mutation amidst pandemic. E-commerce is having a big smiling face among all these talks.

1* Economic times – Inevitably see continuing growth in warehousing and logistics: RICS Chris Nicoll

Digitization of the supply chain has added a ‘shock-proof’ element to the whole SCM. Perks of adding it are listed below –

• Fast-Up

Implementing digitization has reduced delivery time significantly. Predictive analysis is providing a specific forecast of both internal and external factors.

• Crystal Clear

The transparency added trust to the whole supply chain system and in the brand. Customer can track their order by him/her themselves.

Moving to the cloud has integrated the future into the present. With forms like SaaS, PaaS, IaaS – Cloud computing services are very scalable and have put a full stop to the expensive infrastructure.

Omnichannel by all means has grabbed more customers than multi-channel and traditional means. Even omnichannel retail experience on the conventional buying experience has attracted a greater number of eyeballs and retained them.

Here are some pointers that can add that ‘shock-proof’ element to the retail supply chain management –

1. Inventory Allocation (in a strategic way)

Many retailers find it difficult to manage inventory parts during pandemic peaks. Pullers such as market prioritization (for inventory deployments) and safeguarding promotional plans aligned with expected inventory can work out for allocating it.

2. Purchase-order flows

By optimizing and prioritizing PO flows through different modes. The total cost of ownership (TCO) view is helpful in supply chain decisions to optimize critical inventories.

3. Longer supplier partnerships

Long-term contracts can help reduce price volatilities. For eg. In warehousing, getting a rent-lease is more negotiable at the end than a monthly lock. Exploration of extended contracts with fixed yearly increases is a secure way for capacity.

4. Investing in automation (the future word!)

Exploring the space of investing in automation (even in robotic sciences) can leverage many possibilities to reduce the total cost of ownership (TCO). With continuity in disruptions (in the retail supply chain) the uncertain behavior is inevitable. Though retailers can minimize it by looking at measures mentioned for the short read.