State of the Retail Supply Chain in 2021 and How You Can Prepare
During the pandemic, supply chains began to bend under the weight of customer demand. And everyone struggled, as a result. Non-perishable essentials quickly dwindled on retail store shelves, as carriers were scarce. Wholesalers and vendors — particularly those with perishable items like milk — were forced to dump products. And customers were unable to get access to what they needed.
But even with many countries around the world on the mend, there are a lot of question marks surrounding supply chain operations.
In this post, we’ll look at the current state of the retail supply chain and discuss a few strategies you can use to prepare for the future.
Where Do We Stand Post-Pandemic?
Even though toilet paper shortages are no longer common in most grocery stores, retail supply chains aren’t operating at peak performance either. In fact, in a recent NRF letter to President Biden, the organization’s CEO cited several ongoing maritime supply chain disruptions that were harming retail and eCommerce businesses.
As a result of these disruptions, the NRF explained that 70% of surveyed retailers had added 2-3 weeks to their supply chains, 85% were experiencing inventory shortages, and 75% (mostly small businesses) had been forced to pass the extra cost along to their customers.
However, retail supply chains are not all doom and gloom. In fact, the NRF acknowledged that even with the port backlog and 1.2% decline in retail sales from April, May had seen growth at an unadjusted YOY rate of 17.3%.
How Do You Prepare Your Supply Chain for the Future?
Given the lackluster supply chain performance in May and the level of uncertainty many businesses are facing in 2021, it’s critical that retailers take a proactive approach to their retail supply chain management. Here are a few ways you can do that.
It’s impossible to develop a strong retail supply chain strategy when you don’t have all the information. If you try, you’ll likely wind up guessing at a variety of important junctures. This can lead to poor inventory management and shortages if demand suddenly spikes or carrier capacity drops.
Taking a step back and assessing your inventory levels (not just in one location, but organization-wide), enables your team to more easily see what your current inventory needs are. With this information in hand, you can plan your inventory replenishment and upcoming season more strategically.
Even if you can see exactly where your current inventory levels are, it’s hard to know what you’ll need in the next six months. Not only does demand change seasonally, but major events (like pandemics and economic booms and busts) can quickly upend a sound inventory management strategy.
By layering predictive analytics on your inventory management solution, you can cross-analyze your inventory levels with customer demand. This enables you to successfully plan inventory purchases and source products before you even need them, thus keeping you ahead of supply chain slowdowns and minimizing the impact of disruptions in the market.
Partner with a 3PL with Global Distribution Centers
International supply chain disruptions are difficult to avoid. After all, you need international supply routes to procure products from places like China and deliver them to customers around the globe.
However, by partnering with a 3PL that has fulfillment centers in multiple countries, you can more easily navigate international shipping — as the products are housed on-site and shipped to customers in the surrounding regions.
While this doesn’t guarantee that you’ll avoid port congestion, it does increase the likelihood that you’ll be able to reach customers all over the world with greater ease.
Retailers and eCommerce businesses are continuing to face a number of supply chain challenges in 2021. However, by expanding your inventory visibility, using predictive analytics, and partnering with a 3PL, you can minimize the future effects of supply chain disruptions on your business.