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10 Most Common Retailer Supply Chain Management Strategies

It’s hard to be profitable when you run out of stock. It turns the best-selling item into a worst-seller, and it disrupts profitability.

Now, to keep up with the times and compete against other brands already doing it right, think about how your products will be delivered across channels like e-commerce or brick-and-mortar stores. And there’s also keeping track of inventory levels that need constant attention because if something runs out too quickly, you’re missing a lot of potential revenue.

You are most likely not succeed without you controlling the supply chain management. It’s the only way to stay up with the pace of change.


Supply Chain Management

supply chain

In a nutshell, supply chain management is all about how you manage the flow of goods and services. It’s not just about where your products come from or what they’re made out of – A business owner should also consider how to make sure that those things get into the hands of customers as quickly and efficiently as possible.

The idea is that everything in the consumer’s hands has to go through a supply chain. It includes production, product development, and information systems.


Is it Important?

The supply chain is essential to a company’s success because it helps control product quality, inventory levels, timing, and expenses. It also reduces the risk of excess costs by controlling internal inventories, production within the organization, and distribution and sales.

Walgreens Boots Alliance Inc. is an excellent example of SCM in the US because they have stores all over and are one of the most successful pharmacy chains in America.

They have to make sure that they are making the most of their supply chain and be on top of trends. They also need to find ways to add value without going over budget.

As of 2016, they have implemented an innovative SCM that considers relevant data and analytics to forecast customer purchase behavior. For example, if there is a flu outbreak on its way (which can be predicted through statistics), companies will know how much inventory for over-the-counter remedies is needed. They then work their way back up the supply chain to meet this expected demand.


Supply chain Strategies

Just because you’re not as big as Walgreens doesn’t mean that SCM is irrelevant to your business. Every retailer needs to know how much their supply chain management contributes and what they can do to improve it.

supply chain


Retailer Supply Chain Management Strategy #1: Set up a Supply Chain Council

If you don’t have a leadership team in place, your supply chain may lack efficiency and functionality.

Find someone from each department to be a part of the supply chain team, and make sure they’re in charge.

We all know that a well-organized supply chain is crucial to success, but it’s often hard for businesses without executive leadership to understand what they’re doing wrong. You can avoid this by appointing an external council and listening carefully.

Retailer Supply Chain Management Strategy #2: Make Sure About Everything

To ensure that the supply chain operates as best it can, companies need to provide comprehensive training for all employees. They should be taught about “the big picture” and how everything fits into their process.

When you give staff the training and information they need, it will build their confidence. This helps eliminate “I didn’t know” moments when a problem arises.

The more you know about the customer, the better your product. Click To Tweet

Retailer Supply Chain Management Strategy #3: Use Effective Technologies

Too many retailers jump into new technology without considering how they’re going to use it. They design their workflows and processes around the tech instead of creating what they need.

If your supply chain is not producing at the level you want, then it’s time to take a look. Technology can help improve any areas that are lacking.

Are you looking for a way to optimize your inventory? Or do you need software that will help with payments and invoicing?

Once you identify your areas of concern, it’s best to choose the software that will provide data in more accessible and accurate ways. This way, you’ll be able to better plan for performance moving forward.

You can’t afford to be without a retail management system that will help you with sales, inventory, and reporting. This helps you manage your supply chain and allows for the running of an overall healthier business.

Retailer Supply Chain Management Strategy #4: Gain Supplier Relationships

When you’re in retail, it’s not enough to have successful relationships with your customers. You also need the supplier on board for this relationship to work well.

The most successful relationships are those where both parties communicate openly and share their goals for growth. They will constantly improve, measure performance, and resolve conflicts as they arise.

Retailer Supply Chain Management Strategy #5: Strategic Sourcing

“Successful supply chains are proficient in five critical pillars of excellence: talent, technology, internal cooperation, external collaboration, and change management,” according to J. Paul Dittmann of the University of Tennessee in an article for Industry Week. The key is that suppliers should be involved in the decision-making process.

With a collaborator, you can work together to figure out what will sell and how best to manage inventory. This way, you’ll have an easier time running your business.

Always aim to provide the best experience for your customers.

Retailer Supply Chain Management Strategy #6: Focus on TCO

As a small business, it’s always about the bottom line. The “bottom” is where we’re focused and what matters. It may seem like you’re saving money by only choosing the cheapest option for your company. Still, when you consider TCOs and the long-term consequences of buying low-quality products or services to keep prices down, other factors should be considered.

When you’re looking at acquiring a product or service, don’t just focus on the cost of acquisition. Think about all the other expenses that will come with it, like operating and warehousing expenses, environmental effects, transportation costs, etc. You’ll be prioritizing value over price, which is what pays off in the long run.

Retailer Supply Chain Management Strategy #7: Contract Management

Contracts are crucial for any retailer, but they’re often shoved in a drawer and forgotten about once completed negotiations. By making contract management part of the supply chain, you’ll make sure that contracts stay collected and maintained in one central place, so it’s easy to review them at any time.

One of the benefits is that you can identify opportunities to reduce costs by tracking and managing your supply chain. Click To Tweet

This helps minimize risks for both parties in the future.

Retailer Supply Chain Management Strategy #8: Optimize Your Inventory

The company’s supply chain can be confusing to understand, but the total cost of that system is what you need to know. Inventory on your shelves is just money for nothing, and carrying costs – which come from inventory – are a large part of this.

To ensure you have the right amount of inventory, consistently review your levels and balance them with what’s needed. It might also be a good idea to work more closely with suppliers to plan for demand in advance.

Retailer Supply Chain Management Strategy #9: Check Reviews

Retailers should regularly review their supply chain and make sure they’re compliant, efficient, and current. This will help avoid process bottlenecks and cut down on the risk of theft or fraud.

To mitigate risk, you have to work with your suppliers. This starts by picking a financially stable supplier that can be depended on.

Next, focus on speeding up the shipping process and reducing any variations in cycle time. Finally, use technology to help correct delays by alerting key personnel when action needs to be taken somewhere in your supply chain.

By constantly reviewing your work, you can identify any problems early and take steps to correct them before they become a more significant issue.

Retailer Supply Chain Management Strategy #10: Establish Social Media

“Going green” is no longer just a trend–it’s an everyday lifestyle that retailers need to adopt. For businesses, this means considering the environmental impact of their supply chain throughout the entire process.

Not only is it good for the environment, but companies are also looking to do their part in reducing pollution. Click To Tweet

This has become increasingly important as more and more consumers look at environmental responsibility when making purchasing decisions.

For retailers, it’s essential to establish a work culture that makes the employees happy, helps your business thrive, and positively impacts society.


You might not think that supply chain management is something you need to worry about as a small business, but there are plenty of ways to help improve your company. You may have noticed that some things from the list above apply more to larger companies, but this doesn’t mean they don’t work for smaller ones.