Top Strategies for Retail Supply Chain Resilience and Savings

The retail supply chain has faced some of the most significant challenges of any sector in the wake of COVID-19. Learn strategies to keep supplies flowing.
Written by:  Mark Saltarelli
Published:  July 1, 2024
retail manager easily managing supply chain

The global supply chain continues to be a hot topic of conversation. Although the COVID-19 pandemic brought to light the true complexity (and delicacy) of distribution channels, the economic and geopolitical landscape of the last few years continues to highlight the need for flexibility and proper planning in the supply chain. 

Technology and good processes can ease the flow of supplies and inventory for brands across all industries. Still, retail brands face unique challenges in keeping their supplier network strong and the flow of goods smooth. Many that relied on one or two main suppliers have learned that diversification is the best way to navigate this new reality. 

This article shares the techniques and tools the retail supply chain can depend upon to deliver consistent results for its internal and customer-facing procurement needs.

Download the free ebook: 5 Ways Your Purchasing Process is Leaking Cash, (And How to Fix It)

What is retail supply chain management?

Retail supply chain management means managing the flow of goods and services through a retail outlet. It encompasses various activities and processes, such as: 

  • Sourcing
  • Purchasing
  • Inventory management
  • Transportation
  • Warehousing
  • Vendor management
  • Customer service

Retail supply chain management aims to coordinate these processes efficiently and effectively. When the process is done well, management meets market needs while minimizing inventory costs and reducing issues. By optimizing the supply chain, retailers ensure their operations maintain high standards.

5 Common retail supply chain management challenges

Retail brands face unique challenges in supply chain management. Although retail can have healthy profit margins, unaddressed issues can affect bottom-line performance and customer satisfaction. 

From the volatility of global markets and fluctuating consumer demands to the complexities of logistics and inventory control, retail supply chain obstacles require strategic planning and agile responses. Additionally, post-pandemic constraints add more layers of complexity to navigate. 

A retail business that plans for the following common challenges fares better in the changing supply landscape:

  1. Demand forecasting accuracy: Predicting demand can be challenging, leading to out-of-stock items that require replacements or substitutions. Keeping an eye on product levels with strong forward-looking analytics helps smooth out the rough terrain of stocking products.
  1. Supplier relationship management: Strong relationships are the new standard for keeping orders on schedule and ensuring high-quality service and products. Developing a supplier management program and scorecard ensures vendor service remains competitive.
  1. Logistics efficiency: Managing the cost and reliability of transporting goods from suppliers and distribution centers to in-store locations can be challenging, especially for brands with multiple locations. The right technology and supplier agreements can ease the costs and burdens of planning across an organization.
  1. Technology integration: Lack of visibility is the silent killer of budgets and processes. With so many vendors and orders moving through organizations, it’s important to integrate technology into supply chain management. The right tools can help brands solve their operations' efficiency and visibility challenges.
  1. Indirect spend management: When managing purchasing, it’s not just inventory procurement that matters. Retail brands require a steady source of materials and products to keep operations running smoothly. Managing supply levels and tracking open purchase order activity as closely as wholesale and manufacturing orders is integral to ensuring cash optimization and strong financial performance.
5 Ways Your Purchasing Process Is Leaking Cash, (and How to Fix It)

5 Ways Your Purchasing Process Is Leaking Cash, (and How to Fix It)

Identify top areas where your current purchasing process might be falling short—and costing you BIG.

Download the ebook

The lasting impact of COVID-19 on the retail supply chain

The COVID-19 pandemic radically changed the landscape of supply chain management. Production disruptions, price increases, and shifts in the global economy have ushered in a new era where resilience and adaptability are priorities. 

The shifts have challenged retail brands to reevaluate and overhaul their supply chain system to meet these new obstacles. 

  • The pandemic underscored the need for better visibility and flexibility across the supply chain network. Thus, retail brands have increasingly turned to digital solutions such as artificial intelligence (AI), machine learning (ML), and blockchain technology to enhance forecasting accuracy, improve inventory management, and ensure transparency between buyers and suppliers.
  • Diversification in the supply chain continues to evolve. Retailers and other procurement teams are moving away from relying on a single source or region for their products and materials. By spreading out vendor sourcing, brands reduce vulnerability to regional disruptions, whether due to public health concerns, geopolitical tensions, or natural disasters.
  • Production during COVID-19 and associated consumer frustration with price and availability have brought new attention to sustainability initiatives within supply chains. The global pause provided a moment of reflection on environmental impact and sustainability practices. Consumers became more conscientious about their purchases during the pandemic, driving the retail industry to place a stronger emphasis on ethical sourcing, reduced carbon footprints, and circular economic models as integral components of a resilient strategy.

As we move beyond the pandemic, retail procurement professionals will continue to adjust their approach to supply chain management and the changing global landscape.

7 Ways to improve retail supply chain management

Adopting best practices in retail supply chain management brings brands many benefits. With the right practices and tools, companies can improve operational efficiency, sustainability, and profitability. Streamlining processes, reducing waste, and optimizing logistics lead to quicker order fulfillment times, lower costs, and better customer experience. 

Consider integrating these practices into your management program to improve procurement and spend management results:

  1. Leverage AI capabilities: Use technology to more accurately source high-quality supplies, predict demand, optimize inventory levels, and improve supply chain visibility.
  1. Diversify the supplier base: Avoid reliance on a single supplier or region by diversifying sources of goods and services. This reduces risk and improves resilience against disruptions.
  1. Invest in sustainability: Focus on ethical sourcing, reducing carbon footprints, and adopting circular economy models to not only meet consumer expectations but also reduce waste and inefficiency.
  1. Enhance collaboration: Strive to improve productivity and adaptability while fostering better communication and collaboration with suppliers, logistics providers, and retailers.
  1. Adopt flexible logistics solutions: Use a mix of transportation modes and warehousing solutions to quickly adjust to changing demands and supply chain challenges.
  1. Develop a risk management program: Identify potential risks through scenario planning and develop strategies to mitigate these risks, including contingency planning for critical supply chain components.
  1. Monitor supply chain performance: Continuously assess the effectiveness of supply chain practices and be willing to adapt strategies as new challenges emerge.

What kind of retail supply chain data should you collect?

Procurement and supply chain management generate a wealth of data organizations can use to improve performance. With so much raw data to consider, deciding what’s most relevant can be difficult. 

Here are some common metrics to track to understand your retail supply chain better:

Inventory levels

This number helps merchandising teams track the quantity of each product available in warehouses and stores to ensure you can meet customer expectations without overstocking.

  • KPI to watch: Inventory turnover rate, which measures how often inventory is sold and replaced over a certain period

Supplier performance

This metric helps you monitor your suppliers' reliability, quality, and speed to maintain a smooth supply chain operation.

  • KPI to watch: Supplier defect rate and lead times, which consider the percentage of items that arrive with issues and the average time it takes a supplier to fulfill an order

Customer demand forecasting

This number helps sales teams contextualize past sales data and market trends to accurately predict and meet customer demand. 

  • KPI to watch: Forecast accuracy, which compares projected sales to actual sales

Shipping and logistics efficiency

This metric helps freight logistics teams evaluate the efficiency of transportation modes, routes, and logistics partners to deliver products according to contractually agreed-upon timeframes and lead times. 

  • KPI to watch: On-time delivery rate, which measures the percentage of orders a supplier delivers as contracted

Return management efficiency

This helps product management assess the effectiveness of its return processes and policies, as high return rates can significantly impact profitability. Conversely, difficult returns processes may reduce customer satisfaction or brand loyalty.

  • KPI to watch: Rate of return, measured against sales and average resolution time for returns

Cost control metrics

This metric lets Finance keep track of all costs associated with supply chain operations, including procurement, production, storage, and distribution costs.

  • KPI to watch: Total supply chain management costs, measured as a percentage of revenue

Each of these data points and KPIs provides valuable insights into different aspects of the retail supply chain. Keeping tabs on these metrics helps retailers make better decisions regarding optimizing performance, enhancing customer satisfaction, and improving overall market position.

5 Ways Your Purchasing Process Is Leaking Cash, (and How to Fix It)

5 Ways Your Purchasing Process Is Leaking Cash, (and How to Fix It)

Identify top areas where your current purchasing process might be falling short—and costing you BIG.

Download the ebook

Common retail supply chain tools and services

A strong tech stack is the best defense against supply chain obstacles and costly cash leaks. Consider these top-rated solutions for your stack: 

Warehouse management systems (WMS) automate warehouse operations, including picking, packing, shipping, and receiving, to enhance efficiency and accuracy. Epicor Prophet 21 offers a robust mid-market solution with a full suite of features to help retail brands manage returns, shipping, POs, receiving, and more.

Transportation management systems (TMS) facilitate the planning, execution, and optimization of the physical movement of goods, both incoming and outgoing. G2 reviewers recommend Descartes Aljex for midmarket users looking for solid load optimization, tracking, carrier selection, and real-time in-transit visibility.

Customer relationship management (CRM) systems help manage customer interactions, feedback, and service requests to improve satisfaction and loyalty. Reviewers love Salesforce Sales Cloud for most market sectors due to its comprehensive dashboarding, forecasting, campaign and email management, lead management, and workflow capabilities. 

Financial planning and budgeting software assists in allocating financial resources effectively across the supply chain to avoid over- or underinvestment in inventory. G2 users love Vena for midmarket FP&A tools that balance the needs of midsize companies with price competitiveness not available with enterprise providers.

Sustainability tracking tools monitor the environmental impact of supply chain activities to support eco-friendly practices and compliance with regulations. G2 recommends mid-market favorite Greenly for features like ratings and investment reporting, emissions tracking, compliance management, and strong integration with other vital tools. 

Procurement management platforms help companies organize and streamline purchasing for all their supply and inventory needs. Through a well-designed platform like, retail brands can empower their locations to order independently while maintaining budgetary control, order tracking, payment processes, and spend analysis. 

How can eliminate common retail supply chain challenges

Retailers face the same challenges in getting the right supplies to run their businesses as in procuring inventory. Suppliers that produce bags, printer paper, packaging materials, display products, and other key supplies face similar headwinds to those producing wholesale products for retailers. alleviates the supply constraints and visibility concerns that make it difficult for retailers to budget and procure goods in the indirect spend category. With spend management and procurement automation software, they can get what they need to run every location and replace stockout items without falling victim to purchase price variances or inferior product substitutions. 

The platform offers many features to make procurement and spend management easier and more cost-efficient, including: 

  • Curated catalogs of preferred vendor products, with easy substitutions of back-ordered items
  • Self-serve order capabilities that allow all locations to get what they need while taking advantage of volume discounts and consistent product availability
  • Reporting and analysis tools to help Finance see budget performance and cash optimization across procurement
  • Automated AP processes that eliminate time-consuming and error-prone tasks such as manual purchase order management 
  • Automated payments and invoice consolidation that streamline the payment process to just a few clicks per month

If better retail supply chain management and indirect spend control are priorities for your retail brand, schedule a demo of today.

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