Strong Supply Chain Vital to a Retailer’s Success

These days, retailers can’t get by on just one level of transportation service – nor should they be expected to. They want and need a menu of services to choose from, and everyone in the supporting supply chain must step up to provide innovative choices. Whether it is sourcing product or turning inventory, making the most of supply chain capabilities and managing logistics is important to any retailer’s bottom line.

The retailers’ job is to provide customers with the products they want when they want them, all at a competitive price. They need a logistics provider that has the experience and the people to not just move their products, but to solve complex transportation problems when they arise and offer a competitive price as well.

To meet these challenges, transportation and logistics companies should provide a variety of services, from third-party consolidation in Asia to distribution solutions in Europe. Many retailers ship with multiple vendors out of multiple locations to a single point (perhaps in China) where a third party consolidates store-ready loads.

Retail stores in Europe have limited space for storing merchandise, so a logistics company with the ability to bring a 20- or 40-ft. container into port and then disperse products from that shipment to multiple European locations would be welcomed. Again, it must be a seamless operation with in-transit visibility so stores can plan for deliveries. The logistics provider is key to creating a supply chain which ensures that items move to the stores on time and which can fill the shelves to meet customer demand.

Combining resources
Over land, on the water, in the air (or any combination thereof) – creative uses of multi-modal transportation can be a valuable tool in reducing costs. Often a slower, more cost-effective mode of transportation will work just as well as air. For instance, a retailer should weigh the benefits and costs of shipping frozen goods to a grocery chain in Alaska when a less expensive refrigerated truck would take three to five days and a refrigerated container on a barge would take seven to nine days.

Non-perishable commodities like paper towels might be shipped in bulk using a slow-but-reliable service like barge or rail: The savings from using this type of service can outweigh any additional inventory cost if the product has a long shelf life. The same store may use a faster and higher-cost highway or ferry option to move perishable dairy products, and even faster but more costly air freight for soft produce or flowers.

Retailers that sell a variety of products appreciate the flexibility of a logistics company that offers a variety of service and cost options so they can match the mode to the product at hand. Frequency of service is equally important, as the more perishable the product, the more frequently the retailer needs to replenish it.

Delivering what retailers need
The most critical requirement in the retail industry, of course, is on-time delivery. If a store doesn’t have the merchandise, the game is over. If it’s not in the stores, it can’t be sold. A store’s remote locations may present challenges to a supply chain, but no matter where the stores are located and no matter the time zone, merchandise is required to be delivered first thing in the morning so stores are stocked and ready for customers.

Consistent transportation service, without fail, is the requirement. Many stores also require specialized services, like unassisted deliveries, early morning or after-hours deliveries, or drop-offs on holidays and weekends, from their logistics provider.

For logistics to run smoothly, communication and tracking are also required. As technology improves, so the need for quick information grows. Transportation providers must capture data and translate it into information that helps the retailers while making every step in the process accessible to them. Retailers need carton tracking information, as well as electronic documentation, customizable reports and billing information as products flow through the chain.

With the right mix of services and an experienced transportation and logistics partner, retailers can create a supply chain that minimizes costs, maximizes profits and, most important, allows them to serve their customers well.