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Tackling retail's supply chain faults

Mar 29th 2012, 07:40

29 March 2012

Tackling retail's supply chain faults


If food retailers want to keep ahead of competitors, they will need to invest in supply chain strategies that reduce costs and waste in getting goods from suppliers to shelf, while maintaining the highest services standards and continuous availability of goods at the same time.

These remain constant challenges for retailers as they look for ways to distinguish themselves from their competitors through effective supply chain management.

“Retailers are effectively equal at the time of supply. The only differentiator is the supply chain from the supplier to the shelf. If a retailer can do this more effectively, consistently and at a lower cost they can give their customers a better offer and service,” says Gary Benatar, MD of Industrial Logistic Systems (ILS). Industrial Logistic Systems is a leading supplier of logistics solutions to major South African retailers.

Benatar adds that part of this problem lies with suppliers who are not necessarily knowledgeable of a retailer’s needs, which creates inefficiency in the supply chain. They often put their own needs first, instead of considering the objectives of retailers. A key objective for retailers is constant store replenishment, which is essential for retaining customer satisfaction and loyalty.

These problems are escalated when suppliers make direct deliveries to stores, combined with the challenges of converting to a centralised distribution system, which absorbs many of the costs and inefficiencies of delivering direct. A solution to these challenges is better education and understanding of the supply chain barriers faced by all parties involved.

Retailers should also focus less attention on buying and invest more resources on developing efficient and cost effective supply chains. The supply chain is an integral part of a retailer’s buying decisions and the one should not exist in isolation of the other.

Investing in competent POS technology, like those developed by HP, will also add efficiency to a retailer’s supply chain. The sophisticated systems of today can instantly notify store managers when stock is low and place orders electronically, if required.

Efficient supply chain management is essential for retailers. The retailer who can maintain a constant supply of products, faster and cheaper than anyone else will ultimately be favoured by consumers.

Please feel free to make comments or raise new issues by emailing the editor
        
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