A streamlined supply chain is vital for retail success. All merchandise flows through this network, underscoring the importance of implementing controls to safeguard our interests. Learning more about supply chain optimization, operations, and the basics is critical to mitigate potential gaps or losses.
The loss prevention role within the supply chain network has grown significantly in recent years and continues to grow. Technological advancements, the evolution of e-commerce, and the rise of ORC continues to revolutionize this. This article focuses on how to guide LP professionals in managing a supply chain.
What is Supply Chain Management?
You may be asking what supply chain management is in the first place. Simply put, supply chain management is the handling of the entire production flow of goods or services—starting from the raw components, to delivering the final product to consumers.
The primary objective of supply chain management is to fulfill business demands. This is done through the most efficient use of resources. The goal is to match and manage supply with demand to reduce costs, improve sales, and enhance company profitability. Altogether, keeping supply chain optimization in mind throughout the process can drive better results.
Supply Chain Optimization and Basic Tactics
- Better understanding the business the customer needs, and adapting the supply chain to serve those needs/system effectively to maximizes profitability.
- Customizing the logistics network to meet the service requirements of our markets. This may influence warehouse facility size, number, location, ownership, structure, and mission. It requires robust planning and support to manage flow-through distribution. Additionally, time-sensitive approaches to managing the transportation network to include transportation routes, modes of transportation, etc.
- Further listening to market signals and aligning planning strategies accordingly across the supply chain to ensure consistent supply forecasts and optimal resource allocation. This process recognizes the needs/objectives of each functional group, but bases final operational decisions on collaborative needs and overall profit potential.
- Strategically locating and warehousing the product close to the customer base. Speeding conversion efficiencies across the supply chain allows the company to react quickly to market signals and store or customer needs by mitigating lead times along the supply chain. Additionally, it gets the product to the stores and the customer as quickly as possible.
- Being creative and flexible. This requires managing supply sources strategically to reduce the total cost of owning goods, as well as the need for our business partners to share in the goal of reducing costs across the supply chain to lower prices and enhance margins.
- Adopt appropriate performance metrics to gauge success in getting products to the stores or customers efficiently and effectively. This should include both service and financial metrics.
Tech Strategy for Supply Chain
Creating a tech strategy for the supply chain that aids decision-making across all levels and offers transparency into product, service, and information flow is vital. This is a crucial step of supply chain optimization. Our IT system must be able to integrate certain essential capabilities, such as the following:
- Managing day-to-day transactions and electronic commerce across the supply chain.
- Allow for the integration of valuable information such as demand signals, forecasts, inventory, transportation, and other essential data.
- Support inventory management processes, including the quantity and location of product to enhance network efficiencies.
- Facilitate planning and decision-making by supporting the need to allocate resources efficiently.
- Enable strategic, tactical, and operational analysis by providing tools that assist in evaluating distribution centers, other facilities, suppliers, and third-party service alternatives.
- Allow for a decision-support process that will give guidance in areas that may require additional enhancement for an overall supply chain optimization solution.
Bottom Line
To best serve the business’s needs, loss prevention professionals must better understand the overall supply chain process and how it impacts the business. Learning to adapt these supply chain optimization tactics can play a pivotal role. A knowledgeable LP leader will certainly help build on existing company plans and strategies to effectively support shrink reduction and profit enhancement efforts in the supply chain and all aspects of the retail business.
To learn more about loss prevention and grow your career, go to Losspreventionfoundation.org