3 Key Questions Surrounding Transforming Retail Supply Chains

We attended the Retail Industry Leaders Association (RILA) conference recently where the conference was devoted to 3 key questions surrounding transforming supply chain:

  • How does supply chain technology enable retailers to deliver better customer service?

  • What does it mean to transform a supply chain?

  • What new capabilities can retailers acquire to optimize their supply chain?

What then are some of the keys to those earlier 3 questions?  

How does supply chain technology enable retailers to deliver better customer service?

The omni-channel retailer and consumer is the new normal. Customers expect to: 

  • Buy online, pick up in store

  • Buy online, return at store

  • Buy through any number of social media channels without being transferred to the site

  • Search inventory and be alerted when something is back in stock

What consumers now expect is, as we know it, incredibly difficult from a logistics and fulfillment perspective but competing with the massive scale and pricing power of Amazon requires finding new and innovative ways to connect with customers. 

Think of Bonobos (personal shopping assistant helps you select custom clothing) or West Elm furniture opening a hotel where customers can sleep/live in their furniture. Retailers are seeking new ways to engage customers and deliver better service. This is where transformation comes into play. New retail models mean new opportunities to capture data and delight customers. 

Delivering that experience requires a new, agile supply chain to keep up with your partners in retail and ultimately, consumers.

What does it mean to transform a supply chain?

The easy answer is being able to meet the consumer wherever they want to be. Omni-Channel is the new normal so how then do we go about transforming an industry that has been in existence for as long as humans started trading goods?

The answer is DATA. Any company that wants to be relevant in the future needs to control and leverage their data.

In order to meet the customer wherever they want to be we actually have to be there before they know they want to be there. Say that two-times fast. Our fastest mode of transportation is air but even air takes time and for many industries is cost prohibitive. That means our ability to predict, plan, ship, and fulfill has to improve. 

It’s one thing to know ahead of time that demand is going to increase or decrease, but how do you plan for the unplannable? How do you know your container is going to miss transhipment? What do you do if your manufacturer has a fire? How do you pivot if your supplier is going to be short? Many of these things can’t even be guessed at by humans but these types of problems are tailor made for Machine Learning algorithms and Artificial Intelligence. Solutions to problems are always directly at a machine’s fingertips.

There’s only one problem. Supply Chain data is AWFUL. It’s in multiple formats, it’s incomplete, late, inaccurate, the list goes on. So, the very first fundamental thing that all supply chain groups must do to transform is have a comprehensive data strategy. Your data has to be accurate, it has to be complete, and you have to have the systems in place to leverage it. Seems simple, but remember what we know, supply chain data is messy at best and awful at worst.

That brings us to the next question.

What new capabilities can retailers acquire to optimize their supply chain?

There are really two ways that an organization can control and manage their data. Manually (which is what everyone in the industry has been doing for years) and programmatically, with Machine Learning and AI. 

Employing armies of keyboards to sift through spreadsheets, EDI messages, multiple supply chain platform formats, and the telephone to cobble together a supply chain is the industry norm. This  is simply not scalable and you are still working with terrible data being massaged by humans. Not a good idea.

There are tons of tools to go after in Supply Chain that without a doubt can help you optimize everything from sourcing to fulfillment, but no matter how modern a new solution unless you master your data first they will still always be built on dirty data. Dirty data that will begin introducing compounding errors across your entire supply chain as it flows between your systems. We would argue that the #1 tool to acquire is something that masters your data.

There you have it, 3 very key questions that the industry is pondering as it moves towards what we hope to be a data-first approach to supply chain transformation.



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