Next Big Things in Supply Chain Industry – A Retail Perspective

By Mahesh Khetan, Astt Vice President, Aditya Birla Fashion & Retail Ltd (Pantaloons Division)


Mahesh Khetan, Astt Vice President, Aditya Birla Fashion & Retail Ltd (Pantaloons Division)

The consumer expectations have evolved to a great extent in the recent past. From a brick and mortar store being the only point of contact to order/collect/return the goods, now the consumers wish to have multiple channels and expect inter-convertibility between the channels at various stages of their purchase lifecycle. This poses tremendous challenges to the supply chain industry, particularly in a retail sector. Managing inventory and demand across all channels separately, cross channel reallocation of inventory, pooling of demand across all channels and integration of logistics for all channels are the next big things in the supply chain industry. This requires greater automation of inventory planning and high level of technical collaboration between stores, warehouses as well as logistics partners. Global megatrends are no longer business dependant. Building long term sustainability in supply chain strategy is needed to future proof the business. Needs for consultants are felt much more now than in the past due to these challenges.

To get to the root of the supply chain issues and improve supply chain visibility one might want to consider hiring a consulting firm. Ways in which a consultant can help an organization gain supply chain visibility:

Make up for lack of in-house Expertise - Some organizations may not have supply chain specialists on hand to assess partner networks, identify choke points and drive improvement. Small and mid-market companies, in particular, tend to lack supply chain troubleshooting skills. A consultant can help enhance supply chain to eliminate bottlenecks and integrate rapidly with supply chain partners.

Resources Augmentation - Companies often have short to medium-term staffing needs (in the case of government work, this can extend for several years) due to a variety of factors (e.g. recent downsizings, sudden expansion). Consultants in this situation “plug a hole” for the company by filling the role of full-time employees. While expensive, it’s a common work for operational consultancies and to a lesser extent, for government consultancies.

External Change Force - It can be hard for companies to do what’s right (due to presence of sacred cows) – particularly when it comes to job layoffs, salary and benefit changes/reduction, and major operational and strategic shifts. Hiring consultants can help to reach the desired conclusions with sufficient political cover in case certain parties are unhappy (e.g. a displeased Board or disgruntled employees).

Acquire Software Implementation Expertise - You can certainly benefit from a consultant’s expertise in business process improvement. But some projects call for a layer of IT as well. Number of vendors offer supply chain management software. The worldwide market for such software is large and expanding. A consulting firm can help to evaluate the various supply chain vendors and implement the software.

Best practices across Industries and Functions  Consultants have the rare privilege of:

• Serving multiple clients in the same sector (e.g. Beverages, Retail,Apparel)

• Serving multiple clients facing similar problems across different sectors

A consulting firm can offer industry best practices based on the company’s projects over the years with numerous customers.

Improve Performance - Manufacturers that concentrate on their supply chains stand to reap big rewards. Hiring a consulting firm can provide the additional focus you need to enjoy the benefits of a more efficient partner network.  A PricewaterhouseCoopers’ Global Supply Chain Survey reports that companies that recognize the supply chain as a strategic asset enjoy better operational and financial results compared with those entities who don’t. The top companies in the PwC survey had 87 percent more inventory turns per year compared with firms generating average results and 30 percent higher Earnings before Interest and Taxes (EBIT) margins.

Obtain an Outsider’s Fresh Perspective - An activity as complex as retooling a supply chain will involve many stakeholders at your company. So there are plenty of feathers to ruffle when it’s time to cut out inefficient or redundant processes. A consulting firm can help deflect some of that heat and, hopefully, begin the process of building a consensus around a particular supply chain direction.

Next big things in a retail supply chain industry are to develop supply chain which can meet consumer expectations in an Omni – Channel Environment. This can be achieved only through the combination of developing in-house competency as well as robust consulting partners.  

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