Survey: Retailers focus on supply chain in tight economy

Arlington, Va. A survey released Tuesday by the Retail Industry Leaders Association and the Auburn University Supply Chain Management Program found that retailers are focusing their efforts and resources on controlling costs as revenues stagnate.

According to the report “The State of the Retail Supply Chain” sponsored by Fortna, supply chain expenses are receiving full attention from senior-level retail executives as they expand the role of supply chain management within their organizations to better manage inventory, control costs and maintain first-rate customer service.

"In this challenging economic climate the critical role of supply chain management is underscored," said Casey Chroust, executive VP retail operations for Fortna. "Retailers have responded with strategic investment and process improvements that focus squarely on delivering the products customers want and the value and service that they deserve."

According to the report 90% of respondents have invested the same or more in supply chain process improvement; 70% in management development; 60% in technology and 60% in work-force training. These gains emphasize the desire to improve supply chain efficiency.

Additionally, to offset declined consumer spending, 80% of supply chain management executives report focusing their efforts on reducing inventory with close to 70% reporting that they are placing smaller initial orders.

According to the report, the tools required to successfully build superior supply chain management separate the best-in-class retailer from the laggard retailer.

"Supply chain management has proven to be a competitive differentiator for leading retailers," said report author Brian Gibson, professor of SCM, Auburn University. "Especially in these challenging economic times, supply chain executives are leveraging their internal capabilities to meet organizational cost reduction goals while maintaining excellent customer service."