The landscape of supply chains has changed rapidly due to unforeseen disruptions.  These changes include supply chain bottlenecks, inflation and geopolitical activities across retail and consumer goods industries.

Retail supply chains are under immense pressure to keep up with these rapid changes. Innovators have been quick to take advantage of the new virtual distributed environment. Also, e-commerce is growing at an unprecedented rate and customers expect faster delivery times and more personalized service. And retailers are facing pressure to keep costs down and increase profitability.

As a result, organizations are confronted with three critical challenges:

  • The pressures of changing demand planning efforts.
  • The search for new ways to digitally connect to supply chains.
  • How to balance sustainability and profitability.

Despite these challenges, organizations can take action and make a difference.

Challenge 1: Adjusting demand planning efforts.

Traditionally, predicting customer demand relied on sales history, trends and seasonality. But in recent years as sales velocity has increased, most of the typical sales and inventory data around demand signals has been turned on its head, and it’s no longer a clear indicator of what will happen next.  To keep up, organizations must adapt demand planning processes to account for the increased speed of business. 

Emerging technologies are changing the way that businesses operate, and this is having an effect on demand planning. Organizations can now collect and analyze vast amounts of data in real time, giving them a more accurate picture of customer demand. As a result, they can make faster, more informed decisions about production, inventory and marketing.

It’s essential to keep up to date with the latest trends in demand planning to stay ahead of the competition. To succeed, you need to blend traditional data with new, more relevant data sources, such as online searches, POS insights, syndicated scanner data and other data shared between retailers and manufacturers.

Challenge 2: Digitally connecting to supply chains.

Organizations know that they have to be digitally connected to complete. And digitization has created new opportunities for organizations to better connect with their supply chains. By linking production scheduling, material needs and supply chain planning, factories can operate more efficiently and help retailers to respond faster to changes in demand.

If you're in the consumer goods industry, even if you just focus on your manufacturing floor having a digitized, connected factory is invaluable for assessing productivity – and profits. Digital connectivity means everything becomes quantifiable – and actionable.

Today, technology exists that leverages demand analysts and data resources as a competitive advantage to optimize the entire supply chain from the consumer to supply replenishment.

Challenge 3: Balancing profitability with sustainability.  

Sustainability tends to be a top-down thought process with companies embracing big-picture environmental, social and governance (ESG) goals and spreading them throughout the organization.

What if you flipped the script and took a bottom-up approach to sustainability? For instance, what is the impact of automation or schedule adjustments on ESG? Or perhaps statistical analysis reveals that robotic automation is not sustainable because it uses too much power. The result could be new digital pathways and technologies that will revolutionize supply chain management. New technologies enable and deliver on your promise to provide consumers with the best buying experience by meeting your on-time-in-full (OTIF) responsibilities.

The bottom line is that retail supply chains must become more agile and responsive. They must adapt quickly to customer demand changes and react to unexpected disruptions. In addition, retail supply chains must provide a seamless customer experience across all channels, from in-store to online.

Learn more about how companies are harnessing the complexity of the Supply Chain. 


About Author

Charlie Chase

Executive Industry Consultant/Trusted Advisor, SAS Retail/CPG Global Practice

Charles Chase is the executive industry consultant and trusted advisor for the SAS Retail/CPG global practice. He is the author of Next Generation Demand Management: People, Process, Analytics and Technology, author of Demand-Driven Forecasting: A Structured Approach to Forecasting, and co-author of Bricks Matter: The Role of Supply Chains in Building Market-Driven Differentiation, as well as over 50 articles in several business journals on demand forecasting and planning, supply chain management, and market response modeling. His latest book is Consumption-Based Forecasting and Planning: Predicting Changing Demand Patterns in the New Digital Economy. To learn more, please see his Author page.

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