Consumers are putting some serious pressure on retailers when it comes to delivering products. Retailers must be able to provide different delivery options to multiple destinations. They also must deliver accurately and on-time. And, shipping must be affordable (read: free).
That’s a tall order for retailers. If you’re a growing business, it’s hard to understand and realize the benefits of optimizing your supply chain management. In this article, we’ll cover the basics of supply chain management and why you need to make it a priority for your business.
What is Retail Supply Chain Management?
If you’re new to the game, logistics can seem overwhelming. You might think that you’re not big enough to be throwing around terms like supply chain management. But, if you’re experiencing growing pains like delayed fulfillment times, high fulfillment costs, and the inability to offer competitive shipping options and prices, then you’re ready to optimize your supply chain.
Your retail supply chain is the processes you use to get your products to your consumers. It encompasses everything from obtaining the raw materials to make your product to delivering that product into your consumers’ hands.
Retail supply chain management then is how you optimize those processes to maximize both speed and efficiency. You want to be able to deliver your products into a consumer’s hands as fast as you can. However, you don’t want to pay outrageous amounts to do that. You must also optimize your processes to be as efficient and as affordable as you can.
Many retailers use logistics software, 3PLs, and integration companies to ensure they’re optimizing their logistics as best as possible.
Why is Retail Supply Chain Management Important?
It can be easy to overlook the importance of supply chain management. You might undervalue its effect on your business operations. But, we think otherwise.
Proper supply chain management is important to retailers of any size. It can have a big impact on your costs and gives you a competitive advantage. If you plan on thriving in today’s crowded, competitive retail space, supply chain management should be one of your top priorities, if not the very first.
Lowering Retail Supply Chain Costs
As briefly mentioned above, retail supply chain management focuses on delivering your products as quickly and affordably as you can. Diving into your supply chain processes can help you determine areas where you can cut costs. You’ll be to increase your bottom line without even selling more products.
Some areas where you can usually save costs are improving your storage strategy, improving supplier relationships, analyzing customer demand patterns, and moving supplies faster. Check out this article for other cost reduction strategies for supply chain management.
When you streamline your supply chain management process, you break down silos and operate more efficiently. You’ll speed up order processing and save yourself money. All it takes is evaluating your current processes and determining where you can make improvements. This article provides an in-depth look at how you can find opportunities for supply chain savings.
Gain a Competitive Advantage
By making your supply chain more efficient, your business won’t be the only one saving money. Your customers can too! Businesses with low supply chain costs can lower their prices (without going into the red). Your customers will appreciate this.
Supply chain management also helps you deliver a better customer experience. You’ll be able to offer better delivery options and shipping prices. Then, you’ll build trust with your customers when you deliver accurately and on-time. Don’t overlook the importance of doing this for your customers.
According to the UPS Pulse of the Online Shopper,
48% of online shoppers find guaranteed delivery dates important when checking out online.
If you’re a retailer who can consistently deliver, consumers will choose to buy from you again and again.
Optimizing Your Retail Supply Chain through Integration: Compete with the Big Guys
Big-box merchants like Home Depot and Walmart have large departments dedicated to managing their supply chain. It seems that they have all the power when it comes to negotiating with their suppliers. SMB owners often feel that they can’t compete with the likes of Amazon because they just aren’t equipped to do so. They don’t have the same tools, budget, and relationships.
However, it doesn’t have to be that way!
Integrating your retail systems gives smaller retailers like yourself the power to compete. You too can offer free, 2-day shipping and trust your products will get there in time. If you can perform advance logistics operations, then you’ll have more power with your suppliers.
Multichannel management platforms like nChannel’s integrates your eCommerce store with your ERP, 3PL, or other backend systems so you can optimize your retail supply chain. You’ll be able to perform processes like these and more:
- Splitting orders for optimized fulfillment
- Manage multiple suppliers or fulfillment locations
- Manage drop shipping
To learn more about how integration improves your supply chain management, check out this solution.
More Retail Supply Chain Best Practices
There’s a lot of variability from one business’s supply chain to another. But, you can optimize your current processes through best practices, strategy, and integration. It takes time and investment, but it’s worth it! Your customers will thank you.
To keep reading about more retail supply chain best practices, check out these other articles:
- Big Trends in Supply Chain Management You Need to Know About
- Why Your eCommerce Delivery Strategy is More Important than Ever
- Why Distributed Order Management (DOM) is Key to Your Retail Success
- Reverse Logistics: Where Online Retailers Should Make Improvements
- What is a 3PL and Why are They Important to Retailers?