By Luke Foster, Solutions Architect at Barkers
When Covid-19 first hit five years ago, retailers experienced the need for supply chain resilience. Now, as they build the agility and strength needed to respond to potential unexpected events, we can look to this period for guidance.
If the pandemic taught retailers anything, it’s that supply chain issues can bring business to a halt. There were times during Covid-19 when containers were stuck at ports, factories were closed, and drivers were stranded. Nothing moved. Additionally, any weaknesses in how retailers might respond to change were glaringly exposed. A key flaw to emerge was that supply chains were murky. Poor data made it hard to see activity, which made it hard to reach decisions, stay compliant and find creative solutions in the chaos.
Today, while visibility may have improved for many businesses, it still has a long way to go. If lessons from the past are to be heeded—and if the geopolitical situation is to be considered—retailers must make supply visibility a significant focus. At the end of the day, retailers with the ability to make quick decisions amid disruption will be at an advantage. So, for those eager to be in a stronger position, it’s time to make your supply chains much more visible.
Well-placed to lead this charge, are Chief Procurement Officers (CPOs), whose teams work very closely with the supply chain. But CPOs are only suited to enable visibility if they have the right mindset. They must truly believe that the key to this agenda is supplier data. Then, they must be willing to put in the hard work to make this asset accessible.
To meet the challenge, CPOs will need to digitally transform their technology setups. Doing so, will benefit their teams tremendously.
Having the competitive advantage
The first way supplier data benefits retailers is by making them competitive. With visibility, procurement can fend off challenges – an impossible task without information.
By the same token, CPOs who empower their teams with supplier data can maximise opportunities. For example, if the purchasing team is tasked to get shelves stocked in time for Wimbledon, the team might want to order the biggest, juiciest strawberries on the market. In this case, they would need to buy them before the competition. Ultimately, whether we’re in times of peace or disruption, moving quickly in a competitive market is valuable.
In addition to responding to challenges and seizing opportunities, retailers can drive competitive advantage by stocking sustainable products. CPOs who digitise and prioritise visibility, can support this goal. One application is to have a mechanism with which buyers can easily identify which goods meet environmental and social governance expectations. By quickly being able to see which products have a low carbon footprint or which suppliers care about human rights, retailers can secure more ethically-made goods for shoppers.
Keeping regulations in check
With global supply chains, retailers source food and goods from all over. While there are regulations in the UK to govern the social and environmental actions behind supply chain activities, they don’t apply universally. This means that a UK retailer could breach a health and safety regulation or a humanitarian standard, because of something that happened abroad. At the end of the day, retailers are responsible for what they sell. The public holds retailers to this standard, so it’s very important for CPOs to know what’s happening in their supply chains.
Having sight of supplier activities is much easier when data is available. For one, procurement can gauge from supplier data what is happening. Additionally, the data can be optimised for triggers so that warnings pop up when a supplier’s compliance certificate is about to expire, or when a red flag emerges. Relying on technology to assist with compliance in this way can truly free up procurement teams to build value in other areas.
Finding creative solutions
The third area in which CPOs can help their teams succeed amid disruptions is innovation. By quickly accessing good supplier data, procurement teams can find creative answers to tricky puzzles. For example, if a drought caused by global warming dries up transport routes (as was the case with major rivers in Europe in 2022), procurement will need to consider alternative delivery plans. Without data, brainstorming solutions becomes impossible because the boundaries of what is feasible in practice are unknown. However, those teams with data at their fingertips will be well-positioned for success.
It’s crucial, then, that CPOs invest in digital tools to make supplier data more accessible. This will set up their teams to stay competitive, compliant and creative. By investing in and harnessing crucial spend management technology, procurement can stay well-informed and be ready to weather whatever comes its way.
Photo by Jasper Garratt on Unsplash
