How the Modern Retail Sector Benefits from Supply Chain Management
Supply chain management (SCM) is one of the most valuable benefits to a growing business. It allows retailers to meet the demands and pressure of customers, optimize their processes, and reduce costs. But how does SCM provide these advantages? Here’s what you need to know about supply chain management in Toronto and Vancouver, and how it benefits the retail sector.
What Is Retail Supply Chain Management?
The retail supply chain includes the various processes a business uses to get its products to its customers. These processes include getting the raw materials to build the products, packaging it for delivery, and transporting it to the customer. Supply chain management optimizes these processes to make the flow of products faster and more efficient. The goal of any retail business is to get your products to your customers as fast as possible, while reducing costs on your end. Many businesses will turn to a third-party logistics partner that has the technology, software, processes, and manpower to optimize their supply chain for them.
How SCM Benefits the Modern Retail Sector
Reducing Retail Supply Chain Costs
To deliver products as quickly and affordable as possible, it is important to find out which processes cost the most and where revenue is being used inefficiently. Some of these areas may include your storage strategy, supplier relationships, analysis of customer demand patterns, and the speed of moving supplies. Improving these areas can produce significant cost savings.
Your inventory is money sitting on your shelves, and if you are improperly using your warehouse space or failing to restock in time for customer orders, you could be losing revenue and hurting your business’ reputation. SCM allows you to review your inventory levels in real-time, so you can make sure your stock balances with your needs. It also enables you to work better with your suppliers to focus on demand planning and forecasting you can stock up on the right items, and stop ordering dead or out-of-season products.
Omnichannel Operating Model
Over the past few years there has been a shift in customer buying patterns. Brick and mortar stores are expected to integrate the way customers interact with their products in person and online. This integration of digital and physical shopping avenues is possible through an omnichannel operating model. By using technology to manage warehousing and transportation, customizing the consumer experience, offering better and faster shipping, and tracking, the customer can have a seamless experience with your business.
When it comes to mitigating risk, collaboration is key. But you cannot produce or analyze information properly without visibility. SCM helps you to review your processes so you can catch issues early on and proactively resolve them.
Forecasting Techniques and Methodologies
Generating forecasts is key for planning and making the right decisions about budgeting, sales, marketing, raw materials, production, risk assessment, and more. Forecasting is a feature of SCM that is performed on a regular basis and it offers a variety of benefits:
- Improves supplier relations and purchasing terms
- Better use of resources
- Optimizes inventory levels
- Improves distribution planning and logistics
- Boosts customer service levels
- Facilitates performance management
Compete with the Big Players in the Market
SCM used to be intended for big companies, but even small- to medium-sized businesses can stay competitive with the help of these programs. SCM through third-party logistics enables smaller companies to improve their processes, find cost-effective solutions for transportation, gain access to better inventory management and on-time delivery, and more.
Customers expect great service and that comes down to getting the products they ordered on time. If problems arise, customers expect transparency to understand what went wrong, and how the business is working to resolve it. If you are unable to make your customers happy or resolve their issues in an efficient manner, you risk negative reviews and a dent in your reputation. Nowadays, dissatisfied customers can easily go online and post criticisms about your business or service. It is more important now than ever before to focus on implementing SCM to improve customer satisfaction.
Healthier Supplier Relationships
To succeed in the retail industry, your business needs to have successful relationships with its suppliers. Both teams work together to improve the efficiency of the work you do together, so the better you can communicate and manage your own processes, the better you can resolve conflicts or issues in the future.
Hire Lean Supply Solutions to Manage Your Retail Supply Chain
Even if your business is smaller, SCM is still something to consider. While the aforementioned benefits clearly apply to larger companies, your company can also benefit from these points and gain a competitive edge. SCM can help you improve your budget, inventory prices, and your customer experience.
Working with a 3PL provider can help you deal with the challenges of a growing business. With their supply chain services, they can manage all the tasks above so you can have peace of mind and focus on other core responsibilities. A 3PL provider will also offer you many advantages such as supply chain management software and technology that increase visibility and communication between you and everyone in your business network.
If you are looking for the right company to partner with, Lean Supply Solutions is the answer. We rise to the challenge of meeting our clients’ needs through our services, which include product fulfillment, warehousing and distribution, e-commerce fulfillment, warehouse pick and pack, order fulfillment, and more. To learn more about outsourcing to our supply management in Toronto, or to ask any questions, contact us today.