Efficient retail supply chain risk management is paramount to ensure seamless operations, meet customer demands and foster resilience in the face of ongoing volatility.
Through greater collaboration and leveraging technology, you can achieve a more nuanced and dynamic understanding of your supply chains to manage complex risks more proactively and outsmart disruption. More sophisticated perspectives on your retail supply chain risk can also help differentiate your customer experience around the so-called ‘last mile’ of supply chains.
In this insight, based on findings from the WTW Retail Futures report, we offer six headline actions to mitigate retail supply chain risks and bolster your overall supply chain risk management and resilience.
01
Collaboration with your supply chain partners can give you greater transparency, strengthening your ability to identify potential risks.
By leveraging cloud-based platforms, artificial intelligence (AI), and machine learning (ML) technologies, you can facilitate real-time data sharing and collaboration with partners and suppliers. Through better communication and information sharing with supply chain partners, you can proactively mitigate risks and be alert to potential disruption before it manifests.
Continuously visualising your organisation’s assets and third-party relationships throughout your supply chain on a common intelligence platform is one way to clarify complex supply chain exposures. Alternatively, you can consider sharing demand forecasts, production plans and inventory levels to ensure alignment across supply chain stakeholders and minimise potential disruption.
02
A robust OMS can give you comprehensive information on inventory levels, shipping status and other vital supply chain metrics. With a centralised view of inventory across multiple sales channels, you can make accurate inventory decisions, minimise when items aren’t available when they’re needed for sale and enhance your ability to respond to customers’ changing demands. An effective OMS also facilitates fulfilling orders more efficiently and reduces the risk of disruptions. You can leverage advanced OMS capabilities such as automated order routing, real-time inventory updates and intelligent order prioritisation to optimise your overall supply chain operations. By integrating your OMS with other systems, such as warehouse management systems (WMS) and transportation management systems (TMS), you can also get visibility on the inter-dependencies throughout supply chains, enabling you to better coordinate moves to mitigate potential risks.
03
Predictive analytics and AI technologies are playing an increasingly pivotal role in augmenting supply chain risk management. By analysing historical data and patterns, these technologies can identify potential supply chain risks and enable you to proactively mitigate them.
You can deploy predictive analytics to optimise inventory levels, identify alternative suppliers and develop contingency plans. AI-powered demand forecasting models, meanwhile, could help you anticipate fluctuations in demand and adjust your inventory levels accordingly.
AI can also automate repetitive tasks, such as order processing and shipment tracking, freeing up resources for more strategic supply chain risk management activities.
04
Retail supply chain risks are dynamic and constantly evolving. These often complex and inter-related exposures demand a robust monitoring and evaluation framework and the ability to adapt your supply chain risk management strategies accordingly. Do you have the framework and capabilities to regularly assess geopolitical, economic, and environmental factors that could impact your supply chains? Are you conducting regular risk assessments, engaging in scenario planning and developing contingency plans to mitigate potential disruptions? These and other ways you can continuously monitor and evaluate risk can ensure your supply chain risk management stance is more proactive than reactive.
A proactive stance on supply chain risk management can let you get ahead of emerging threats and take appropriate action to minimise their impact. Leveraging external sources, such as market intelligence reports, industry trends and geopolitical analysis can help you stay informed, as can ensuring your enterprise risk management strategy includes horizon scanning on emerging operational and supply chain challenges.
05
Relying solely on a single supplier heightens your vulnerability to disruption. By collaborating with diversified suppliers you can ensure continuity of supply, negotiate more favourable terms and have alternative options lined-up when disruptions manifest. Detailed due diligence early on in new supplier relationships and regular communications throughout your relationship are essential to understanding your partners’ capabilities, vulnerabilities and potential risks.
Conducting supplier assessments will help you evaluate suppliers’ financial stability, production capacity and risk management policies and procedures, allowing you to push for further assurance as required. Diversifying your supplier base and strengthening relationships from the outset can more generally foster openness and trust and enabling effective risk management strategies, such as joint contingency planning.
06
For online retailers, the so-called ‘last-mile’ – where goods are transported from the last distribution centre to customer's doorstep – represents opportunities for supply chain innovation and optimisation.
One area to consider is whether you can leverage your current operational footprint to improve last-mile delivery. This may mean, for example, evaluating whether it’s more efficient to deploy physical stores to fulfil orders to reduce the time, cost and distance involved in deliveries. You can also consider incentivising customers to collect in-store to reduce the potential for last-mile disruption.
Another opportunity to mitigate last-mile disruption is to create ‘digital twins’ of supply chains. This involves using real-time data that mirrors and monitors your supply chain continuously. Digital twins can help you optimise the flow of resources across your supply chains to reveal further last-mile journey efficiencies, as well as alerting you to potential disruptions further upstream.
For a smarter way to proactively manage your retail supply chain risks, risk management framework, capabilities and strategies, get in touch with our retail sector experts.
