What Does the New Normal Mean for Supply Chains?

As more and more of the country reopens, customers seem eager to get out to stores and shop. Some people have even referred to this as revenge shopping. Regardless of what you call it, retailers are starting to see improvements in foot traffic. So, what does that mean for businesses trying to fill their shelves in preparation for this increase? There is no doubt that recent times have altered supply chains for retailers. Listed below are a few things to consider as you manage the next normal in retail:

• Diversification is key. It is important to find both local and national/international suppliers to ensure that an event in one part of the world doesn't prevent you from getting inventory. Even with a global event like Covid, different areas can be affected at different times. Diversification gives you the ability to obtain stock from a source that hasn't been impacted when others shut down.   
• Relationships can be vital to success. When world events create high demand for items, customers who have long-lasting relationships receive the most attention from distributors. By the time a disruption occurs, it’s too late to start those relationships. Businesses need to think ahead and have a plan before it is actually needed. 
• Proactiveness is critical. Since the ability to receive supplies in a timely manner can be impacted, being able to forecast your needs has become a critical factor in staying in stock as demands fluctuate. Forecasting models are changing but can still be effective in capturing current trends, helping businesses make good decisions.   
• Data is important. Blockchain technology has allowed retailers to not only understand where their products are coming from, but also to share that information with customers. Traceability gives retailers the ability to ensure product quality from the raw materials all the way to the final product. Sustainability and environmentally friendly products have become the standard, and customers want to know they are supporting businesses that care about the same things they do. 
• Inventory needs to be managed differently. With legacy thinking, businesses would look to buy in bulk to be able to obtain the best pricing and help with logistics, but those are no longer the only things in play. Retailers continue to shrink store space, leaving limited room to store excess inventory. The on-demand philosophy seems to be gaining traction and deserves consideration.
• Managing your supply chain requires the ability to be agile. These are just a few areas where agility has become important:
  • Giving yourself options.
  • Speeding to get things done.
  • Managing costs in an everchanging world.
  • Managing constraints.
  • Understanding the customer.