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Is your retail supply chain your weakest link?

In the digital age the retail supply chain directly impacts the customer experience.

Overview

Most retail supply chains lack both insight and agility. They can’t anticipate changes in customer demand or respond to them effectively. As online businesses scale, fulfillment services must be flawlessly executed, or retailers could suffer. A loss of just five per cent in market share could pull EBIT margins down by 25-30 per cent.

But by taking a more strategic approach to flexible fulfillment retailers can help realize the supply chain’s potential as a growth driver. Scenario planning, an agile supply chain and hybrid fulfillment models are the keys to success.

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Key Findings

Three key elements distinguish a strategic approach that turns your supply chain into a growth driver.

  • Scenario planning is particularly useful in highly uncertain situations because it gives insight into the unknown. “What if?” simulations can help retailers develop fulfillment capabilities with the right breadth, depth and timing (at the right cost) as consumer behavior evolves.

  • An agile supply chain that can adjust operations fast enough to respond to new situations. Analytics, for example, can give management teams deeper and fuller insights and the ability to distinguish between everyday and more strategic decisions.

  • Hybrid fulfillment models that support tailored and expanded assortments across multiple formats and channels from multiple points of origin and at multiple delivery speeds.

Recommendations

Retailers can start to strengthen their supply chains by recognizing the need for full inventory visibility and flexible fulfillment. They should examine their current capabilities. And if they are struggling to cope with new realities, they should act now to understand customers’ requirements better, embrace the need for speed, and discover how new models and paradigms can help.

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"The future is, of course, uncertain. The time to start preparing for it, however, is now."

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