With the first quarter of 2015 already behind us, we thought it would be helpful to look at some of the trends and challenges in retail supply chain management that are forecasted for the remainder of the year. Supply Chain Management Review sat down with our own Mike Glodziak, who shared his thoughts and insights on the future of the industry.
Q: What new challenges should retailers be aware of in 2015?
Q: How should retailers address these shifts?
A: Empty shelves are a retailer’s biggest enemy. Because of this, speed to shelf is important. The retailer that has the widest selection of products and the fullest shelves will win. The key is to focus on fast inventory turns, quick response and getting the job done. To do this, retailers need the ability to look across their supply chain and see exactly where product is located (in a DC, on the water, in a truck, etc.) Without this level of visibility, shippers are challenged in making decisions on short- and long-term capacity. They wont know how much space they need in their warehouses and they’ll never be able to get out in front of the “tightening capacity” curve.
Q: What types of network strategies are shippers using right now?
A: We are seeing three high-level strategies.
These steps are all being taken in the name of reducing reliance on transportation while effectively managing the capacity constraint issue. A combination of these various strategies are all being employed for the shippers’ unique situations.
Q: What major threats could impact supply chain companies that service retailers?
A: Right now, we’re all dealing with increased competition, tighter logistics capacity, fewer labor/talent options and increased regulations. As a result, margins are getting tighter and we’re looking for even more entrepreneurial and creative ways in which we operate. There’s reduced leverage with building landlords when renewing or structuring new lease deals as the economy improves. With the economy and unemployment rates improving, and an onslaught of governmental regulations (particularly in California) – driver talent is at a premium. Much like the customers we serve, we have to continually focus on managing this new environment to provide high quality and service levels.
Consumer shifts have dramatically changed the playing field for retailers. Having a strong network of service providers who partner with the retailer to solve supply chain challenges is a differentiator. Learn more about our retail supply chain services expertise, or contact us to learn more about how we can become your dedicated logistics partner.
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