When it comes to supply chain management and organizing the flow of goods – including purchasing, inventory, transportation, warehousing, forecasting, and delivery – there are many moving parts and plenty of room for error. In fact, mistakes in supply chain management can have a significant impact on a business’s bottom line. According to Zippia, supply chain disruptions can cause a massive 62% loss in finances and an average hit of 54% on reputation and logistics. Additionally, in a 2021 Statista survey, 57% of respondents cited supply chain disruptions and shortages as one of their top supply chain challenges. To navigate the complexity of the supply chain effectively, here are three critical factors that retailers and suppliers must bear in mind to optimize their supply chain:
Get a Grip on Costs
With many moving parts to the supply chain, it’s essential that retailers and suppliers fully understand the total costs associated with their flow of goods. Retailers often focus on other areas of the supply chain over managing costs – like improving delivery times, transportation logistics, customer satisfaction metrics, and more. While these are critical KPIs, cost management should ultimately be paramount – directly powering how retailers scale growth. With this, prioritizing cost management is key to driving long-term growth and informing supply chain strategy.
One aspect of cost management is remembering that the “shipping” cost that retailers often think of is not the complete story. The cost journey begins at the source and concludes at the consumer. When looking at shipping costs, overall, one needs to consider the entire journey. This holistic perspective is essential because these costs ultimately affect the final retail price, impacting retail margins.
Maximize Customer Reach
When planning for warehousing, suppliers should diversify inventory across many different warehouses in locations placed around the country – as opposed to stocking one central location – to maximize customer reach. Operating from several strategically located warehouses allows suppliers and retailers to manage order fulfillment and lower delivery times better while improving ground transportation logistics. This can help shorten delivery times for consumers purchasing through any retail channel.
Shorter delivery distances yield benefits, such as reduced potential for product damage due to fewer handling requirements and less time on the road. Ensuring nationwide shipping capabilities is vital in a world where consumers are no longer bound to local shopping. It unlocks new selling opportunities with consumers who were previously challenging to reach.
Transform Delivery Processes
Retailers should prioritize employing tools that can enable them to deliver directly to their end customers – cutting out unnecessary steps in the supply chain and optimizing costs. Partnering with suppliers who will drop ship directly to the end consumer is key for retailers to succeed in today’s furniture retail scene. This can help them achieve many goals, such as pushing the responsibility for fulfillment on the supplier, which allows retailers to lower costs and focus more on driving traffic and converting sales.
Streamlining the fulfillment process by reducing touch points, as exemplified by GigaCloud’s Supplier Fulfilled Retailing model, yields benefits for buyers and sellers. It lowers costs and boosts margins, allowing retailers to concentrate on customer acquisition and sales conversion while minimizing the distractions of logistics.
By attending to these considerations, retailers, and suppliers can forge a more efficient and profitable supply chain that not only meets the demands of the modern marketplace but also sets the stage for long-term success.