Woman in a retail clothing store
Chapter 5

Key Takeaways

We’ve highlighted some of the challenges in the above pages, but what about the solutions? Below are five things for retailers to think about as they map out supply chain strategy in 2024 and beyond

1. Tech investment pays off in long run

Although retailers acknowledge it is difficult to find funds for tech transformation when margins are squeezed, emerging capabilities in automation, Artificial Intelligence (AI), machine learning (ML) and analytics can future-proof and bring long-term cost savings.

Ali Rezvan, retail director at Microsoft UK, says technologies such as AI, ML and cloud “Offer retailers the insight they need to build resiliency into their supply chains – one that bakes in business continuity and streamlines operations, to prepare them for the challenges of the future”. (12)

Systems that enhance supply chain visibility are vital in an unpredictable environment

Thakrar says: “We’re looking at technology to drive efficiencies in various departments – and automation is a key focus. By embracing technology and elements of automation, if there is a change in your teams or staff leave you don’t have to go through the whole learning curve again – it may need to be tweaked because some processes or activities have changed but actually it’s minor tweaks and you retain the knowledge.

2. Data-led approach boost visibility

Retailers have plenty of data, but they don’t always know what to do with it

Working with companies like HSO, they can make better sense of the information at their fingertips to drive supply chain improvements, with HSO’s Microsoft partnership opening the door to implementing data visualisation tools such as Power BI

“Our most used data proposition is retail KPI control towers,” Rose explains. “These are specific retail dashboards, designed for specific roles within the organisation:

  • Supply chain
  • Warehouse
  • Sales

It takes the retailer’s data and presents it in format that can be drilled down.”

Example of the Supply Chain Intelligence Hub for the Warehouse Manager

Rose adds: “It enables retailers to make decisions on short and long-term contracts based on performance. They they can use it to make informed decisions on suppliers based on past data

Example of the Supply Chain Intelligence Hub for the Supply Chain Manager

Rose adds: “It shows order rate by day and items in stock which is all very important to ensure warehouses are used optimally."

Example of the Supply Chain Intelligence Hub for the Regional Sales Manager

HSO can also support with more sophisticated data plays, such as digital twinning – a nascent technology that analyst firm Gartner describes as being able to “revolutionise demand forecasting accuracy, vastly improve customer experience, and serve as a critical input to enhance the use of AI/ML tools”.

Rose says: “This is tech used by companies to better plan and be more proactive than reactive in shorter time frames. “If you don’t have a data warehouse or know how to use data lakes then digital twinning is something for well into the future. For those who do, it enables them to use historic and real-time data to run scenarios on anything including how to optimise, such as optimising warehouses and modelling shop floors."

3. Change in leadership

Thomas Pocock, senior director at Gartner, suggests a radical rethink in terms of staff responsibility and tech investment can unlock the supply chain’s potential. “Supply chain leaders must reevaluate how they look at the individual, community, and technological potential available to them in order to achieve a new peak of productivity to enable their objectives and break out of a pattern of low and stalling labour productivity,” he said.

He added: “To combat change anxiety and overload, supply chain leaders must design opportunities for humans and machines to learn from one another in a safe environment." (13)

Several retailers freshened up their supply chain leadership structure in 2023, as new challenges call for different approaches to running the department. Online fitness brand Gymshark saw the need for its first dedicated supply chain leader in 2023, bringing in ex-Lacoste EVP of operations, Laurent Madelaine, while Matalan recruited Phil Hackney as chief supply chain operations officer with responsibility for delivering “executional excellence” across Matalan’s logistics and supply chain (14)

4. A need for diversification

If the pandemic taught retailers anything it is that supply chain diversification is crucial.

Primark estimated it missed out on circa £1 billion of sales in the pandemic because it only had stores an no e-commerce, which were forced to temporarily close. And recent supply chain disruption has led retailers such as Decathlon and B&Q to launch their own marketplaces, connecting brands directly with shoppers through online platforms (15)

It’s best for retailers to focus on diversity in their supply chains – you can’t have all your eggs in one basket,” argues Rose

“One supplier on bulk discount is not best practice anymore. Why not have multiple, better, and more secure relationships – and slightly more expensive supply chain – so if any turbulence arises, you can ride it out."

Sometimes a whole transformation strategy is required. The modern day user case example of supply chain transformation is ASOS. New initiatives to ease excess inventory include a partnership with luxury discount
website Secret Sales and the launch of Sample Sale, where ASOS items can be bought for £5, are part of an overarching c-suite-led supply chain transformation that aims to make each order more profitable and reduce inventory levels considerably.

We are improving the shape of our buy – buying more of expected best-sellers (backing the winners) and reducing intake on the long-tail,” explained Calamonte

ASOS is cutting lead times in own brand goods from around 20 to two weeks and “better leveraging relationships with our best suppliers to remove unnecessary administrative processes, which can increase speed and lower cost”. Calamonte added: “It may also mean consolidating some of our own-brand suppliers
or relocating some of our sourcing. On the partner brands side, we have already removed unprofitable, non-strategic brands from some or all territories.” (16)

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