Retailers face reckoning in stock management practices
More than four-in-five retailers have had to make changes to stock management and majority are seeing Just-In-Time (JIT) practices fail their supply chains
A report from Advanced Supply Chain Group (ASCG) says 82% of 200 retailers surveyed have had to change their approach to stock management because of Covid-19. As a result, 42% of retailers plan to increase sales via new channels and Just-In-Time (JIT) management is seeing significant changes with a mere 35% of retailers believing JIT can work while the pandemic is ongoing.
Timings at the beginning and end of supply chains have been adapted, with 41% of companies allowing longer lead times on stock ordered and 40% extending delivery times provided to customers.
Investment in stock availability is being prioritised following 66% of retailers receiving stock late during the pandemic and 63% experiencing problems with availability. Companies are focusing on more localised levels of stock to minimise these problems.
The biggest challenge to the supply chain during the pandemic has been balancing stock flow against stock piling. As a result, 40% of retailers are investing in improvements to inventory management accuracy. Thirty-three percent cite smart, connected technology as the way to improve accuracy and visibility of stock. Thirty-seven percent identify changing stock inventory management to make stock movement and levels more visible as a top priority.
Retailers are re-examining the performance of goods they are selling. As a result of reviews, 33% of retailers have diversified and a similar percentage have changed strategies to focus on stocking and selling their highest margin goods. Forty-one percent are investing in stock auditing to improve stock profitability.
Measures to counteract supply chain disruption are now being taken by 33% or retailers. Strategies include increasing the number of suppliers and working with more logistics providers to spread risk and increase stock levels.