The Global Pile-Up of 2021
12 March 2021
Author: Jasmine Waters
Wondering why your latest online purchase still hasn’t arrived? There’s a strong chance it’s stuck in a logistical pile-up. Across the globe, retailers are reporting substantial shipping delays, after demand from the pandemic has flooded many supply chains. COVID-19 has in turn exposed gaps in supply chain imbalances, meaning many brands may now not have enough product to actually stock their shelves. How can the holes be sewn back together, and what changes in management can we expect to see?
Why is stock so backed up?
After global supply chains ran to a fairly lean schedule during the height of the pandemic, which is now becoming back up in anticipation of huge post-COVID demand. Consumer and industry segments that first saw a spike in purchases – such as athleisure – showed that the purchase cycle itself was no longer linear, meaning the expectations of the supply chain have only been larger. There have been endless queues to unload imported goods, while international flights are still are a below average level. As a result, retailers are citing they may be a knock-on ‘bubble down’ effect, that could impact the shipments stuck in transit floods after logjams clear up. The challenge is now to retain a real-time visibility, in the bid to rebalance the already fragmented supply chain.
What changes can retailers make?
Alongside product delays, there are other contributing factors retailers must now be aware of. One of these is the growing consumer desire for customisation, which will have a further impact on how supply chains function. On top of this is the consumer preference to engage with responsible and sustainable businesses, with emphasis placed on ethical sourcing and procurement. Values-based buying with create operational and cultural challenges, but also needs to be taken extremely seriously. According to a report by Zebra, 85% of retailers noted that they needed better inventory management tools, perhaps revealing the crux of the problem.
With many retailers using more than one system simultaneously, the supply chain cannot often be viewed as a whole. A key to maintaining consistency could be to combine both online and offline data to better understand what products to stock, allowing brands to optimise inventory turns and increase margins. Priorities moving forward need to include strong connectivity from a single system source, while having a technology stack that supports multiple sources. The hopeful outcome of this is the introduction of ‘intelligent stores’, underpinned by a combination of data analytics and AI capability. After this is set, brands can move onto supply chain automation and visibility. It might be a lengthy process, but its essential in nature – with a possibly huge pay off.
Image source: https://www.logisticsbusiness.com/