Procurement used to manage vendors and negotiate costs. In today’s global sourcing landscape, it’s about so much more; it’s about effectively managing risk, ensuring sustainability, all to the ends of creating a strategic competitive advantage for your brand.
The key to this progression?
Technology.
Technology has been a lead disruptor in many industries. It has enabled a more visible supply chains calling for more effective ways of managing areas of risk and sustainability.
Advancement in this industry comes with its own unique set of challenges, ones that can only be met with innovative strategies, preparation and the adoption of technology to enhance your capabilities.
As we move into 2018, we move into a new year with new possibilities and new heights to be achieved. But before then, what does the state of retail look like today?
The Current State Of Retail
Over the last couple of years we have seen the shift towards omnichannel retailing, where there is a demand for product to get to the end-user faster than ever before.
Amazon has been leading the charge in this area with their online purchasing systems and same day delivery options. This increase in pace has lead to an increase in pressure on retail supply chains, and that is of course not without its own challenges.
The state of retail research report states that the top three experienced retail supply chain challenges for 2017 are: handling promotions, better collaboration with suppliers and availability without increasing stockholding.
This can be achieved through the automation of your demand forecasting and accurate centralised data tracking will be key as you look to overcoming this year’s challenges.
Successfully addressing your current challenges, lays the foundation for a competitive position in the marketplace with systems already in place to handle the challenges that the new year has to offer.
The future of global sourcing holds as many opportunities as it does new, more complex challenges, a few of which we will take a look at it below.
What global sourcing and procurement challenges can your hardlines retail supply chain expect to face in the future?
I list but five of the predicted challenges to arise over the next 10 years:
- Risk – Over the next 10 years we will see a shift in the way that risk is approached. Currently the risk management approach taken by most quality and procurement professionals has to do mainly with product and regulation compliance. It is predicted that a more holistic approach to handling risk will be adopted.This is predicted to be accomplished through defining new metrics and data points for a fuller, more defined picture, enabling the ability to plan and address risk in a way that has not successfully been accomplished before.
- Sustainability – The cost of sustainable supply chains has always been a primary factor for not adopting sustainable approaches to business. The future sees that the role of procurement will move beyond that, and look to creating and sustaining social value. This point cannot go without mention that within the next 10 years we will see the largest sector of our workforce being filled with millenials, who care about sustainable and economic growth. It is predicted that there will be less exploitation of resources with a stronger use and reuse cyclical economy.
- Collaboration – Collaborative outsourcing will be key to managing the array of everyday supply chain complexities. This will be based on mutual interest and trust leading to a mutually beneficial outcome. In 10 years time, the complexities you are currently experiencing will need to increase as you endeavour to manage multiple vendors at one time. If you are collaborating and building successful relationships with your suppliers, then this will be an easier transition for you.
- Transparency – Much of the supply chain has nothing to do with the end-user of your product, but with the dawn of social media your role as a quality or procurement professional may need to. The era of social media has brought about transparency like no other, increasing the spotlight on retail brands and their supply chain operations. You will need to ensure that your entire supply chain adopts a “social” mindset which will create a business model that has the brands image at the fore.
- Information – We are in the age of big data, the success of your supply chain relies on it. You will need to embrace big data through advanced data mining and analysis. We are increasingly finding ourselves in a world driven by data, and this will only increase over time with more access to real-time data tracking and updates. The key is to begin planning for this. Start asking yourself what your data capacity currently is, look at your own data and begin mapping how you will embrace the coming of a bigger data age.
So, how will these challenges impact you?
So while you are still in the process of building systems to deal with your 2017 challenges as you move into a busy 2018 season, the quality systems you put in place today will form the foundation, the very building blocks of how you are to manage the above mentioned challenges as we journey towards to the future.
Think of it as a road map allowing you to effectively plan for the future.
The above global sourcing challenges increase your level of supply chain transparency, a holistic approach to managing your risk, but each one of these challenges requires technology to optimise the current and predicted supply chain pace.
The adoption of new technology will mean that more data will be available for analysis, allowing a lot more insight, visibility and transparency into your operations. The more data you have the more effectively you can produce products of the highest quality, and the better you can identify risk early on.
Key Takeaways
After delving into some of the top challenges that retailers came up against in 2017 and as you seek to efficiently plan for 2018, the key will be to improve your current operating systems through clever, more advanced technologies and strategic planning.
So let’s look at some ways that you can begin this process;
- Automate your forecasting processes – There are technologies and systems that you can adopt to ease this process for your brand. You can use the well reviewed SAS demand forecasting software to help you solve your forecasting troubles; “the combined power of automation, analytics and workflow, you can generate the most unbiased and accurate large-scale demand forecasts.” Resistance to this will only set you back, as your competitors will be doing everything to embrace growth. In adopting technology to automate your forecasting process you will be saving yourself time, a resource that can be used elsewhere.
- Data tracking – For store stock levels, online stocks, current distribution centre stocks, predicted future stock levels in distribution centres, finished goods in transit, inventory being shipped from freight forwarders etc. Accuracy in this regard is key and technology can provide that, and do away with human controlled data entries.
- Supplier collaboration – Fostering a culture of supplier collaboration will have long term benefits for your brand. While we have all sorts of technology that can be used to aid communication with your supplier, it is often the tried and tested face to face experience that truly allows for an effective and mutually beneficial relationship that is collaborative in nature.
Adopting new technologies and strategies, while you may be resistant at first, will only be if benefit to the optimisation of your supply chain operations, resulting in bottom line benefits for your brand.
Facing supply chain challenges head on is not easy, but it will require your leadership to embrace the challenge that lies ahead and grasp the opportunity for learning, in order to create a well run and competitive supply chain for your brand.
Let us know in the comments section if you are currently facing these challenges and what you have done to address them?
through human labour.
nd this tool should be inclusive of all levels of employees for creative and productive inputs.
The premise of every RCA can be defined as this;
Correct the problem and confirm the effects – Based on the findings of the above steps, you will need to ensure that the cause of the problem is removed and you will then need to supervise the effects this may have on your future production process.
Prevent the problem from recurring – As the 8D technique is a continuous improvement technique, you may need to revisit and amend the management systems and/or operating systems, practices, and procedures to be sure that your root cause has been removed and the problem will not recur.
Congratulate the team – This is an important step as your team will have spent a lot of time reflecting and analysing each production step to the benefit of your brand. Acknowledge and recognise them for their efforts and thank them individually.
According to the guidelines as laid out by ISO 9001:2015, they are roughly categorized into eight sections; five of which are mandatory for the QMS of your factory;
The 
There are many concerns with regards to a situation as the above 1. The chemical usage in the toys would likely not have met international regulation. 2. Hiding violations from an auditor only aids non-compliance and illegal production processes. 3. How are these chemicals affecting factory workers? How are they stored? How are they disposed of?
Many factories struggle with resources and finances, which means their money will often go into sourcing raw materials for the next production before putting money into the servicing of their machinery and equipment. This will mean that when an auditor comes to inspect the factory and its layout that the machinery is often out of calibration or filled with too much oil, which can contaminate your product and potentially places your brand in a risky position. Not ideal.
ation. If this is discovered during your audit process, it is recommended to rather find a different supplier. There are no grounds where this is acceptable.
Hazardous working conditions – Hazardous and unsafe working conditions are not unheard of in many third world factory’s across the globe and are often the cause of factory technical audit failure. Things like faulty Personal Protective Equipment (PPE), expired fire extinguishers, no clearly marked exit signs, exits not in working order, machinery that is in need of calibration or lack of safety gear found on heavy machinery can lead to audit failure. These safety violations are easy enough for your supplier to address and solve, so bear this in mind upon receiving audit results as you will often need to factor in corrective time for your supplier.
Let’s take a look at how this could play out;
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