Supply Chain Creativity as a Competitive Advantage

The pressure is on for retailers. Consumers expect their products to be delivered quickly, accurately, on-time, and most of the time they expect it to be delivered for free. To keep up with the demands, retail organisations need to get creative and optimise their supply chain management strategy.

Managing the Supply Chain Triple Threat

Supply chain management at its core is the control over product quality, inventory levels, timing, and expenses. This ultimately leads to reduced costs and quicker delivery times thanks to tighter control of internal inventories and distributions.

Becoming quicker, cheaper, and more predictable is a difficult triple threat to manage. And where trends such as supply chain automation certainly help your retail organisation keep pace with competitors, it’s just as important to consider how wider, more creative supply chain strategies can safeguard your business in the long run and help to differentiate your business in the market.

Wal-Mart and H&M - Strategic Supply Chains and Inventory Technology

Totally reinventing your supply chain strategy might sound like a big task to take on, but there are already a few retail organisations getting it right. Wal-Mart is a global organisation with over 11,700 locations worldwide. With such widely dispersed operations, it’s imperative they focus on both their local and global supply chain capabilities.

Through a strategic emphasis on cutting costs and maintaining an efficient cost of goods sold (COGS), they’ve created an elite supply chain methodology that works for them. They’re known for their use of strategic vendor partnerships through strategic sourcing. They further improved their supply chain approach by creating networks with suppliers to improve material flow with lower inventories. And by adopting advanced inventory technology to track inventory and restock their shelves, they further cut costs that they can then pass along to their consumers.

H&M is another great example of a company getting supply chain creativity right. After a rough Q1 in 2018, the company vowed to create a faster, more flexible, technology-driven supply chain. They broke down their approach into 3 parts.

1. They reevaluated their overall supply chain to make it smarter and more flexible through investments and automated warehouses.

2. They knew they needed better insights into their processes. So, H&M adopted advanced analytics to consolidate their data and better predict trends and price management.

3. They brought things into the digital era by deciding to build the foundation for current and future technologies.

Then in late April 2019, they announced that they would offer wider supply chain transparency on all their clothing sold on hm.com. Details about where the item was produced, the name of the factory, and the address and number of workers employed at the various facilities are all included so that consumers have full visibility into what they’re purchasing.

Use Your Supply Chain as a Differentiator

So, the question stands – can you really use your supply chain as a differentiator? And the answer is unequivocally YES. Wal-Mart and H&M are two examples that just go to show that you can.

Retail organisations must be willing to innovate and improve their supply chains to meet consumers’ expectations. Those who don’t are likely to suffer declining profits, and eventually become obsolete. Manual supply chain processes take up valuable time and money and keep employees from performing more strategic, business-building tasks.

Additionally, falling behind on technologies and wasting time with on-premise system upgrades hampers your organisation from innovating and improving your supply chain. Transforming your supply chain to the cloud ensures complete supplier integration and an opportunity to use data-based information to revolutionise logistics models and inform business decisions.

Your supply chain, then, can become your retail organisation’s secret weapon to prepare for the future. You can increase profits, decrease costs, and gain an advantage over competitors all at the same time. Optimising your supply chain through decreased COGS and just in time (JIT) methods of holding inventory are why the Wal-Marts and H&Ms of the world are as successful as they are. A creative and well-managed supply chain can then be a part of your strategic plan.

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