Over the years there have been shifts in the supply chain, where gaining a competitive advantage through your entire supply chain can be essential to your success. It has become virtually impossible for a company on its own to reach this position. Today we see the power of the market in the customer’s hands, therefore without an agile, flexible supply chain, you may not be able to keep up with the demands of the market. It is an ever-changing landscape, that is defined no longer by the designer. In this blog post, we take a look at where regional household goods brands fail and what successes they can take from global brands.
There are many reasons that can cause a regional retailer to experience supply chain failures, here we dive into a few of these reasons:
1.Risk Management strategies – Risk is a part of any and every supply chain. Regional retailers often put out fires all along the supply chain instead of preventing fires thr ough risk prediction. Many companies do not understand the value of having a risk management strategy, there is often the misconception that it is a costly strategy to have in place, while there is a cost to implementing this. Take into consideration what risk can cost you, more or less than having a strategy in place? This is multi-faceted and requires a strategic approach.
2.Delivery delays – With customers defining market trends and the speed at whichthey need products. You may find yourself at a loss with a delivery delay. Contingency plans are essential to ensuring your product gets to market. A contingency plan allows you to manage this without causing your brand any damage. These kinds of delays cause customer dissatisfaction pushing them to buy your product elsewhere.
3.Inventory Management – Inventory management is a complex procedure from ensuring you have enough inventory on hand to ensure you don’t run out of inventory in your warehouse. Both sides of this coin can have detrimental effects for your brand. Regional brands do not often know how to manage this balance effectively rendering the product either unwanted or leaving customers unsatisfied. Regionally inventory management is often done manually; this causes inconsistency with too much room for human error. This kind of procedure can often be costly and time-consuming.
Global brands, have much larger and more complex supply chains to navigate and therefore face the same potential failures regional brands do, but this larger, more complex web of intricacies requires an efficient, well communicated operating procedure for every step of the process.
1.Risk Management – Global brands take every procedure into account when understanding possible areas of risk. From sourcing to logistics to inventory management, each of these areas affects one another. If there is a problem with sourcing, it inadvertently affects the logistics of the entire operation. Therefore a brand such as Amazon needs to have a Risk Mitigation strategy that spans the entire operation.
An example of a risk strategy would be the adopting visibility tools that are used to keep track of various shipments in real-time that also enable you to take action in the case of a delay.
2.Delivery Delays – Global brands use software with real-time updates on their shipments. This technology helps to identify any problems or deficiencies in a timely manner. While this may not be preventative, it does make sure there are no surprises. To prevent these kind of mishaps, using a Transport Management System which promotes cross network communications.
3.Inventory Management – When it comes to managing inventory on a global scale it is safe to say that software should be used. Automating this processes allows for transparency and an up to date inventory procedure.
Zoho Inventory is software that enables you to manage and keep track of your orders and inventory with real-time updates, keeping you ahead of your supply chain.
The above challenges don’t have to mean the end for your brand.
Begin assessing which of these strategies will provide the biggest benefit to your supply chain, while some of them may cost you to put in place, ask yourself whether or not it may be worth it in the long run. We cannot predict the future or the way in which supply chains function under pressure, but you may want to find yourself in a position where you have the best possible strategies to deal with whatever challenges may come up, minimizing the potential risks your entire operation may face.
The above-mentioned failures are to enlighten the perception around these specific strategies, with clear communication, an effective strategy and a plan of action you are likely to begin addressing those pressing supply chain challenges that you face.
“Are you a brand that has struggled with the above mentioned?”
“Were you able to address your challenges successfully?”
Tell me in the comments section below