GUEST COMMENT Only collaboration can tackle the deficit of supply chain resilience in retail

We are in a uniquely challenging time for domestic and international supply chains, defined by the after-effects of COVID-19, to unexpected economic crises and changing labour patterns, writes Carl Moore, managing director for e-Fulfilment at Wincanton, a leading supply chain partner for British business.

The process of delivering to customers efficiently, whether that be online fulfilment in store or at home, is central to success in these turbulent times. This is a complex process though. One that requires high levels of experience, operational sophistication and investment, and one that is all too often taken for granted.

Navigating these challenges on a daily basis means markets are running at capacity, and businesses are increasingly having to challenge convention and consider alternative supply routes. It is a highly complex situation to navigate, so our delivery supply chains need to be more resilient than ever. These ‘new normal’ times are yet to be defined, but we do know that uncertainty is here for the foreseeable future. Flexibility, diverse offerings and strong market predications will, unquestionably, be more important.

These challenges are being felt acutely in the mid-market segment of the retail sector, where we find that businesses do not have the benefits of the vast capital expenditure that their larger competitors have invested into supply chains to back-up their resilience. Leaders in this market want to improve, and it is here that consumers are pressing for change.

For these businesses, it is increasingly clear that collaboration with a supply chain partner is the answer. Indeed, recent research we commissioned found that 89% of mid-market retailers think supply chain outsourcing makes operations more resilient. Using our in-depth and cross sector expertise, we are well placed to support retail leaders as they deliver for customers in difficult times.

Retail leaders are aligned on the need for supply chain resilience
It is universally accepted that supply chain resilience is essential to growth in retail: 99% of retail business leaders we polled believe this to be the case. Yet there is a disconnect between what they believe is required and the reality on the ground, with only 15% believing they do not currently have a resilient supply chain. This does not immediately seem a large number but if all those supply chains were to face issues concurrently then the impact on the UK economy would be significant.

Over half (56%) of mid-market leaders believe improving supply chain resilience will increase their ability to address market risks. This is encouraging, but we need to expand understanding of the value of resilience to supporting business goals further.

How leaders secure their resilience will differ. Each retailer is unique and requires a tailored approach – not least depending on the geographies of where they source their products, and between B2B and B2C operations. But what’s clear is that resilience will come via strong supplier relationships between retailers and supply chain leaders. Understanding and seeking solutions together has been crucial to the success of the retailers I’ve worked with.

Consumers also demand resilience
Supply chain partners have a unique position to see right across the retail space, which is essential when it comes to forecasting consumer demand. We know all too well that fulfilment operations need to be flexible to handle constantly shifting behaviours. This is where we help retailers to be on the front foot, enabling them to quickly scale operations and manage an uplift in demand at any moment.

We are also seeing more than ever that consumers are astute when it comes to balancing price and quality of service. Most of us shop around for the products we need, and with the cost of living crisis, this will only become all the more prevalent. This is all whilst demand for rapid and convenient delivery is on the rise. Such consumer demand is a constant challenge, but it provides retailers with the impetus to improve their resilience.

The skills shortage faced by the logistics sector over the past year means the public are, helpfully, more aware to supply chain issues. Consumers understand and want resilience to prevent this impacting them again. But more than this, an appreciation of the issues at hand means that consumers have been more willing to accept price increases in difficult times.

Preparing for the unpredictable – supply chain partners are there every step of the way
Retail leaders know the challenges they face. Their businesses need to become more flexible. Businesses need to diversify in light of the ongoing turbulences in the market, and businesses need to prepare for unpredictable consumer behaviour. It is the supply chain partner that is equipped to balance these three priorities.

Collaboration is the answer, but it is not a quick fix. Long-term thinking is required to build resilience and navigate tough choices, at the heart of which will be a choice as to what type of supply chain a retailer wants to build.

Carl Moore, managing director for e-Fulfilment at Wincanton, a leading supply chain partner for British business.

In-depth insight regarding supply chain resilience in retail can found in Wincanton’s latest insight paper, available to download here.