Modern consumers are used to the comfortable situation where any commodity they need is just a few steps or clicks away from them, being available 24/7/365. Thus, whenever we lack something, we drop by the local mall or order it delivered to our front door via the internet. But making a purchase, we seldom wonder what makes such consumer-friendly shopping possible. And the answer is pretty simple – the smooth operation of supply chains.
In the contemporary, largely globalized world, supply chains are the veins through which the blood of the economy circulates, ensuring a flawless connection between manufacturers and end-users. As the consumer market covers the entire planet and embraces an almost limitless range of products, handling supply chains becomes quite an ordeal for entrepreneurs of all kinds, especially in retail.
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Major challenges of supply chain management in retail
What are the bottlenecks that retail businesses face today?
- Shifts in consumer demand. For generations before, the chief concerns of buyers were the price and the quality of products. At the outset of the third millennium, other considerations have become equally important for consumers who make their purchasing decision. They start to wonder whether the item they fancy is environmentally friendly or what the working conditions for the personnel were on the shop floor of its manufacture. Moreover, the ubiquity of the internet gives modern consumers ample opportunities to discuss the merits and demerits of products both with the global audience and brands. Naturally, the latter are forced to promptly react to the customers’ feedback and fine-tune or even totally overhaul their approaches, which adds a fair share of volatility to the contemporary retail market.
- Diversity of sales channels. Parallel to classic brick-and-mortar stores brands own, e-commerce is getting triumphant traction nowadays. Plus, companies employ the services of third-party agents (both physical and virtual), making the distribution landscape exceedingly complex. So retail brands have to adjust their logistic policies to each sales channel and consumer category in order to thrive in the highly competitive and patchy retail market of today.
- Cooperating with multiple suppliers. Retailers of the early 21st century often have to deal with a plethora of suppliers that may have unique working schedules, currencies, and business ethics. Finding a common language with all and sundry requires utmost flexibility from retail companies.
- Climate-driven risks. With products delivered to all climate zones in any season of the year, it is quite a challenge for retail companies to keep the goods, transportation means, and personnel from harmful environmental influences. Such a task is rather demanding even when you know well what natural conditions to expect. But given the irregularity of weather patterns caused by the much-discussed climate change, this undertaking becomes a real headache.
- Intricacies of international relations. Not only storms or floods can disrupt well-greased supply chains. International confrontations, embargoes, trade and conventional wars are the risk factors that retailers have to take into account as well. So modern entrepreneurs in the industry must be not only competent in their realm but keep their sales and sails trimmed to the political winds blowing in the areas of their business interests.
These stumbling blocks are quite serious in themselves, but retail ventures have to take care of the numerous features of the supply chain lifecycle as well, including supplier relationships control, purchase and order processing, inventory and warehouse management, logistics procurement, demand anticipation, not to mention bookkeeping and other financial aspects.
Fortunately, ours is not only the epoch of globalization but of the across-the-board digitalization as well. State-of-the-art technologies enable integrating all these previously disparate assignments into one system, employing different types of supply chain management software.
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Benefits of SCM (supply chain management) software
Supply chain management tools are software apps that function as real-time analytical mechanisms enabling to manage the end-to-end flow of products and data, related to supplier sourcing, transportation, warehousing, and inventory handling. The best supply chain software also provides round-the-clock monitoring and total transparency of supply operations at each junction of the process.
Having been developing software for retail ventures for a decade, we at DICEUS know what perks tools used in supply chain management offer.
The top supply chain management software has integrated accounting modules that streamline financial operations and exclude mistakes caused by the human factor, which are likely to cost the company a pretty penny. But even apart from those valuable functions, supply management tools are instrumental in optimizing and automating many workflow procedures, which reduces both the time spent for them and the number of employees involved in often monotonous and repetitive assignments. All of this spells cutting down on overhead expenditures.
Enhanced flow of products and data
The core function of supply management software is ensuring an accelerated flow of everything related to supply – information, materials, and goods. Speed is mission-critical in the age of cut-throat competition. Departments should quickly exchange business messages, outlets should receive products on short notice, customers should get answers to their inquiries fast. Such promptness is the foundation of a smooth delivery, smart and flexible decision-making, seamless in-house collaboration, and high-quality customer services – the summands that boost an organization’s efficiency granting it a competitive edge.
Maximum customer data visibility
The most popular supply chain management software solutions contain analytical tools that give a 360-degree view of clients, their demographics, preferences, and shopping behavior. Possessing this information, the company’s experts can draw a comprehensive portrait of their customers and map out a marketing strategy to meet them halfway, which effectively turns such solutions into supply chain planning tools.
Keeping a lean inventory
Having sufficient inventory means being able to timely respond to demand fluctuations. But how much is enough? Supply chain tools can help you keep track of the roster and quantity of items you have to rule out both the absence of some products and their excess that eats up warehouse space and related expenditures. Moreover, by employing supply chain tools software, you can meticulously schedule goods delivery and shipment to drastically cut down on storage facilities.
Optimizing vendor selection
Specialized features of many supply chain software solutions enable comparison between several vendors in terms of the prices of their goods, delivery speed, support services, and other operational details. With a clear view of available options, retail managers could make better data-driven decisions and switch a supplier if their conditions stopped being most favorable.
The undeniable boons of supply chain software make it a must-have for any retail company with big-time aspirations. What are the available options in this niche?
DICEUS recommends: 5 best supply chain management tools
Having Microsoft as its most notable client (and about 400,000 smaller ones), this vendor is the global leader in terms of revenues its supply chain management products have brought. In fact, SAP is not a single solution but a whole suite of tools providing supply chain collaboration, warehouse management, integrated business planning, etc. Making use of them, organizations can significantly augment storage and inventory management, streamline shipment management procedures, and facilitate cooperation with multiple suppliers.
This software keeps abreast of the cutting-edge technologies (such as AI, IoT, and cloud deployment), which allows leveraging advanced analytics, producing sales forecasts, mapping out financial and supply plans, and doing dozens of other things that will beef up your company’s efficiency.
The only drawback of this supplier one can mention is the lack of phone- and email-based customer support.
It has the runner-up spot in revenues, outstripping SAP in the number of customers. Oracle can offer an impressive line of cloud-based SCM products covering different aspects of supply chain management: procurement, order management, product lifecycle management, inventory control, supply chain planning, logistics, and maintenance. Such a roster of tools enables enterprises not only to handle all phases of supply workflow but also to shape cost reduction and revenue growth policies based on the in-depth analysis of the customer persona.
The major shortcoming of Oracle is identical to the one mentioned above.
This logistics behemoth firmly holds third place in SCM software revenues with its solutions utilized by 20 out of the top 25 supply chains rated by Gartner that operate not only in retail but also in manufacturing, entertainment, travel, and hospitality industries. JDA’s tool is an end-to-end supply chain solution enabling both planning and implementation. It encompasses all aspects of the supply workflow – from scheduling and inventory management to workforce and task supervision with budgeting and forecasting in-between.
This software facilitates collaboration with retailers and bolsters customer service by forestalling their shopping desires. The downside of it worth mentioning is the absence of alerts that keep managers updated on every stage of the shipment process.
Infor Global Solutions
Software by this vendor is specifically honed for production planning and scheduling, opening broad streamlining opportunities for inventory optimization. Its supplier management functionality is meant to compare the quality of delivery displayed by various suppliers.
To make use of it, you have to contact the developer for a quote, yet no trial period or demo version of the solution is available to help you make up your mind.
Being not among the niche leaders, this vendor, however, shows the most robust growth pattern and offers a comprehensive suite of tools capable not only of supply workflow management but also of forecasting demand and planning the organization’s supply strategy. Among its unquestionable fortes is the procurement module that sends alerts in case any transactions demand attention, return management opportunities, and a free demo version extended to clients. Customer support is also in evidence, although only during the working day.
When you are through with the choice of the supply chain management software, you should integrate it with your existing ecosystem.
Implementing supply chain tools: Lifehacks to remember
Experts of DICEUS have amassed tons of experience in new software integration, so they consider it essential to pay attention to the following tips.
- Get all stakeholders interested. People tend to resist changes that are going to impact them, forcing old dogs to learn new tricks. To ward off this reluctance, you should communicate to the teams and individuals who will work with the new software. They should realize why it is necessary to onboard this tool, what processes and operations will be affected by the changeover, and how they will benefit from adopting it. Also, allow for some learning curve and be ready for transition period frictions.
- Choose technology wisely. The crucial choice you will have to make is between an on-premise and cloud (typically, SaaS) SCM system. The former is a good option when you have a strong in-house IT crew and sufficient budget to maintain it on a permanent basis. But for lean-minded small enterprises with no IT department of their own, the cloud is the only alternative.
- More haste, less speed. All novelty introductions should be carefully planned. While mapping out the integration strategy, don’t go for speed. Focused on immediate implementation, people may forget about risks that accompany any serious venture. So easy does it. Move gradually from stage to stage, avoiding time pressure that can do more harm than good.
- There can’t be too much testing. Since an SCM is a comprehensive issue involving nearly all departments, you should take care it runs according to expectations in all use cases and test it properly. Even when the system is put into operation, you should monitor its functioning, collect feedback from all its users, and improve underperforming elements when they are identified to nip problems in the bud.
- Canned solutions aren’t always the best option. Off-the-shelf tools (even by the top suppliers) are one-size-fits-all solutions that are meant for an average user. They are more affordable and ready for usage soon after acquisition.
But each retail organization is unique in terms of size, the products it deals in, the market it serves, shipment geography, and other aspects. Naturally, the garden variety of supply chain management software can hardly be a perfect fit for all of them. If this is your story, contact DICEUS to commission a bespoke SCM that will contain only the functionalities you need and thus will suit your venture to a tee.
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Summing it up
Modern retail business is a complex endeavor with a whole range of tasks and responsibilities to attend to. Providing an uninterrupted supply circulation is probably the most important and onerous of them given the challenges our globalized world pitches. Supply chain management software can radically streamline such efforts, facilitating workflow processes, curtailing expenditures, and boosting the efficiency of the company.