Guide to global supply chain management for retail

How global retailers can improve their supply chain to reduce costs and improve customer experience

For global retailers, an efficient and optimised supply chain is essential for providing a seamless customer experience, competitive prices, and more sales. In fact, 98.1% of shoppers say their loyalty to brands is directly affected by the delivery process — and 84% agree that a poor ‘last mile’ experience is enough to put them off making a repeat purchase.

1 Integrated and agile supply chain characteristics

With businesses around the world facing an unprecedented period of uncertainty, let’s explore some of the characteristics that make up an integrated and agile supply chain for retail.

Cost efficiency

More than ever, the pressure for retailers to keep prices low while maintaining sufficient profit margins is immense. Therefore, cost-reduction strategies including economies of scale; efficient inventory management; and optimised transportation management should be a key objective.1

Ability to deliver multi-channel fulfilment

Regardless of whether shoppers buy online, in-store, or have opted for ‘click and collect’ or home delivery, your supply chain should be able to deliver goods efficiently and with a seamless buyer experience.2

Wide global reach

Truly global supply chains have two things in common: they’re able to source low cost goods from across the globe, and have support from their supply chain partners in all the key regions they operate.3

Fast, responsive and flexible set up

In the retail sector especially, speed is key. Making sure products are delivered quickly and on time is the priority — along with addressing customer needs and dealing with any queries that arise.4

End-to-end security

A lack of end-to-end security in the supply chain can lead to poor customer service, higher costs, more shrinkage, and reduced supply chain visibility. Implementing advanced technology, such as radio-frequency identification (RFID), GPS, supply chain/inventory management software, etc., can help reduce your exposure and ensure your inventory remains protected.5

2 Key challenges for businesses

Delivering a best-in-class supply chain comes with its own unique demands. Here are some of the main hurdles your business is likely to face.

Pressure on time and cost

Customers naturally want their products delivered on time. Unless you have a systematic supply chain and suitable logistics partner in place, you may struggle to meet their needs.1

Expertise across the board

To meet your customers’ requirements, you’ll need to excel in key areas like labour management, technology management, warehousing, legal challenges, technological advancement, reliable transportation, and regulations in different countries.2

Finding the right partners

The best supply chains require expertise at every level — from initial planning, right up to the moment of delivery. To do that, you’ll need to source and collaborate with third parties who can assist you in areas including supply chain consultation, procurement, inventory management, pre-retail, e-fulfillment, home delivery, in-store logistics, warehousing and reverse logistics.3 Find more resources about this or log into your Market Finder account to explore the logistics finder widget.

3 Supply chain best practices

Let’s explore some strategies and approaches your business can use when developing a world-class supply chain.

Forecast and analyse your customer demand

Companies that move away from traditional forecast-led supply chains to demand-driven supply chains can potentially grow their sales by up to 4%. They can also reduce their operating costs by up to 10%, with inventory reductions of around 30%.1

Forge partnerships and share resources

As well as finding the right partners to work with (such as those mentioned above), sharing infrastructure can also help improve your supply chain, cut costs, and reduce delivery times. A great example is ecommerce companies providing fulfilment services to brick-and-mortar stores — in return for the physical stores offering in-store pickup to their ecommerce partners.2

Use advanced technology

You’ll need to invest in the right technology to ensure your supply chain remains timely, cost-effective, secure and efficient. End-to-end security technology can help, as can using appropriate supply chain management software/inventory management software.3 With online stores in particular, make sure customers can see all the options and relevant information during checkout. You can also use shipping software to streamline the process and ensure it’s organised, fast and reliable.4

Optimise your inventory

Effective inventory management is essential for reducing costs and meeting the needs of your customers. Conducting regular reviews, understanding and analysing customer demands, and updating your inventory accordingly will help you achieve your goals, and potentially cut warehouse costs.5

Develop the right storage strategy

Making better use of the warehouse space where your supplies and inventory are stored will help improve your supply chain, and also bring your costs down.6

Aim for sustainability

As part of your wider corporate sustainability plan, explore greener modes of transport. Opting for more sustainable inventory management and supply techniques can be a great way to meet consumer expectations, and lower your carbon footprint.7

Creating an efficient, flexible and customer-focused supply chain is essential for any global business. Use our best practice approaches to help ensure you follow the right strategy, and explore Market Finder for Retail for more helpful resources, guides and success stories from Google’s team of global marketing experts.